How Ratan Tata, Humiliated By Ford, Turned The Tables By Acquiring JLR

The world has bid adieu to Ratan N. Tata,  who passed away at a Mumbai hospital late on October 9. As the former Tata Group chairman, Tata is often credited with shaping the country’s automotive landscape with the progress made by Tata Motors. But how many of you all know that Ratan Tata and his team faced "humiliation" when they went to sell the group's fledgling car business to Ford in 1999? This was revealed by Pravin Kadle, a former Tata Motors executive. Read on to know the whole story.

Also Read: Ratan Tata, Former Tata Group Chairman And Industry Titan, Dies Aged 86
 

Ratan Tata, aged 86 passed away on October 9

It was in 1999 that Tata Motors, then called Tata Engineering and Locomotive Co, had suffered massive losses and was considering selling off the passenger car business. The company’s bad fortunes were mostly brought upon by the poor response to its first hatchback, the Indica, which was introduced in 1998. As a result, people had advised chairman Ratan Tata to sell the passenger car division, and one of the first companies to show interest was Detroit-based American auto giant Ford.

Also Read: Ratan Tata Honoured With 'Udyog Ratna Award' For Contributions To Industry

The story then goes that Ford officials came down to Tata’s headquarters, Bombay House for discussions, before inviting the team at Tata Motors to Detroit to hold further discussions on the possibility of a takeover. During the meeting they humiliated Ratan Tata and the other top executives by asking them “ If you do not know anything, why did you start the passenger car division at all”. The Ford executives then proceeded to tell them that they were doing them a favour by taking over the business. According to Pravin Kadle, the whole incident put Ratan Tata, then the group chairman, in a sombre mood.
 

Tata had executed the company's acquisition of Jaguar Land Rover

Eventually opting to not sell the business, Tata Motors’ fortunes improved over the course of the next few years, after the launch of several new cars that did wonders for the company’s sales numbers. 2007 saw the world plunge into a severe financial crisis, subsequently affecting the automotive industry. It was around this time that Ford, in a bid to restructure its company, announced that it was selling off its marquee brands Jaguar and Land Rover. As many of you may already know, Tata Motors ended up acquiring the companies for USD 2.3 billion. 
 

"This was in 1999 and come 2008, the same Ford's JLR was bought by us. Ford chairman Bill Ford thanked Tata, saying 'you are doing us a big favour by buying JLR'," Kadle said, to a thunderous applause at an awards function in 2015.