“Chairman of Corporate India”
By William Langley
It is tempting to look at Ratan Tata, the Indian tycoon whose company last week took over Land Rover and Jaguar, as a symbol of a nation’s headlong charge towards economic superpowerdom. This, we suspect, is how it tends to be with those pesky, nouveau riche Asians; one minute you’ve never heard of them, the next they are snaffling up all your best-known firms, and treating themselves to large, stucco-fronted mansions in Kensington.
Ratan, 70, and his faintly mysterious Bombay-based family, do not fit this caricature at all. Resoundingly non-nouveau, the Tatas have moved among India’s business aristocracy since Queen Victoria was on the throne, and while the last 150 years have seen a steady growth in their power, wealth and reach, the family is famed for never having done anything even remotely headlong.
Yet Britain is succumbing to them. The £1 billion acquisition of two of the UK motor industry’s most illustrious marques follows the £250 million purchase of Tetley tea in 2000, and last year’s £6.75 billion takeover of Corus, the Anglo-Dutch steelmaking combine. All this, moreover, is likely to be a mere warm up for the big invasion Ratan appears to have in mind. The Tatas are currently involved in everything from luxury hotels to watchmaking, but while their presence is inescapable in India, they see abundant room to grow in Britain.
The calm – some would say stealth – with which Ratan operates appears to be a consequence of both temperament and heritage. Sometimes described as the “Chairman of Corporate India” he is a non-drinking, non-smoking bachelor Parsee, descended from Zoroastrian priests who fled persecution in Iran more than 1,000 years ago. In the Gujarat region where they mostly settled, the Parsees have clung tightly to their distinctive culture and an austere set of religious values.
Even today they observe a prohibition against polluting earth, air or water, and traditionally dispose of their dead by leaving the corpses atop high, wooden “Towers of Silence” to be eaten by vultures – although a worsening Indian vulture shortage, even in rural areas, has lately led to the embrace of alternative methods.
Ratan’s great-grandfather, Jamsetji Tata, having rejected the priesthood to pursue a career in commerce, founded the family business in the 1850s, and made his first fortune by peddling opium to the Chinese (a detail that goes conspicuously unmentioned in the Tata Group’s otherwise comprehensive corporate history).
He went on to establish textile and steel mills and a shipping line, but it was the building of his first hotel that best captures the ethos that the Tatas still hold to be particularly their own. The story goes that Jamsetji, although independently wealthy and politically well-connected, was turned away from the best hotels in Bombay, whose policy was to admit only Europeans.
The best answer, he decided, was to build a hotel of his own – one that would overwhelm its rivals in grandeur and opulence, and so was founded Bombay’s Taj Mahal, still the country’s most famous hotel, and still proudly owned by the Tatas.
After Jametji’s death, successive generations of the clan added airlines, car and truck companies and a bank to the portfolio, but India’s business climate – particularly in the years after Independence – was rank with the governing class’s predisposition towards socialist economic models, and every attempt to stimulate development and wealth-creation foundered.
By the time Ratan became chairman in 1991 the Tata Group was in trouble. It had been asset-stripped by nationalisations, and battered by the high taxes and over-regulation that had, as a further consequence, driven millions of the best-educated and most enterprising Indians abroad.
As a young man, Ratan seemed destined to join this diaspora. Certainly, he could see nothing to suggest that India would ever embrace real liberalisation, unleash the talents of its people and emerge as a great economic power. Although privileged, his childhood had been unhappy.
His parents, Naval and Soonoo Tata, separated acrimoniously when he was seven, and with his younger brother, Jimmy, he was largely brought up by his redoubtable grandmother, Lady Navajbai. In a rare reference to these times Ratan told the American magazine Business Week: “She was very indulgent, but also quite strict in terms of discipline. We were very protected, although we didn’t have many friends. I had to learn the piano, and played a lot of cricket.”
From these emotionally threadbare beginnings grew a man of ambitious but strikingly solitary nature. Ratan has never married, and for the last 20 years at least has lived alone in a modest, book-filled seafront house outside Bombay from where he drives himself to work each day in a small Tata car.
His best friends are believed to be his dogs – he keeps several – and while enjoying quasi-celebrity status in India on a Bollywood scale, he is almost never seen at social functions. “There is a great sense of loneliness from time to time,” he admitted, during last year’s lengthy negotiations for the Corus deal, “I’d be lying or hypocritical if I said otherwise, but I have the dogs and they are a part of my life.”
After attending a private school in Bombay, he studied at Cornell and Harvard universities in the US, and – wowed by the dynamism and opportunities of American life – decided to stay on and accept a job with IBM. The more he looked over his shoulder at the ramshackle conglomerate, dominated by committees of family elders, that the Tata Group had become, the more sensible his decision seemed.
Ratan’s plans to escape the family firm were scuppered by his grandmother’s ill-health. Consumed by a Zoroastrian sense of obligation, he returned to India, and by the mid-1960s was running the family’s steel operations. He rose, steadily, although without fanfare, through the Tata hierarchy, finally becoming chairman – by a happy convergence of events – just at the moment that India finally accepted the virtues of the free market. The state’s thumbs were prised off the economy’s windpipe, the trade unions and regional bureaucrats effectively de-fanged, and the private sector allowed to compete right across the board.
Now Ratan was in his element. Despite slimming the group down to 80 companies from more than 250, reducing the labour force by close to 40 per cent and selling off millions of dollars worth of non-core assets, he was able to point to rapidly rising profits and a far more modern, technological industrial base to build a future upon.
So inescapable has the company become in its homeland that few Indians could imagine life without Tata. They spice their curries with Tata condiments, refresh themselves with Tata teas, dress in clothes made from Tata fabrics, drive Tata cars over bridges built with Tata steels, communicate through Tata telephone and internet networks, and stay in Tata hotels. Last year Ratan realised a long-held dream of producing an Indian “People’s Car” costing little more than £1,200.
It isn’t enough. “Ratan Tata isn’t satisfied,” concluded Business Week. “He wants the world.”
But why? With his simple tastes and patrician bearing, the new boss of Jaguar and Land Rover is no one’s idea of a ravening capitalist. His British workforce will be lucky even to see him, and the upper-tier London social circuit – already peppered with wealthy Indians such as steelmaker Lakshmi Mittal and Kingfisher beer baron Vijay Mallya – will not see him at all. Indeed, Tata plays down suggestions of great personal riches, pointing out that most of his businesses are ultimately owned by charitable trusts.
Yet he is a man in a hurry. The Parsees of India, the community that sent him forth, is running out of time. Forbidden from external marriages, and increasingly encroached upon by the modern world, they face slow extinction. Ratan has no children, and no obvious successor, and what he achieves in the next few years is all that he will be remembered for.
Original article here.