Tata Motors completed the takeover of two luxury automobile brands, Jaguar and Land Rover, from Ford on this day in 2008. The deal was not only a tremendous commercial success for the Indian manufacturer, but it was also a personal triumph for Ratan Tata. Vedant Birla told the story of Tata’s “revenge” on Ford in a Twitter thread this morning.
“Tata’s revenge story, particularly Ratan Tata ji’s, against Ford is actually a story of great success,” wrote Vedant Birla, Chairman of Birla Precision Technologies.
Tata Motors introduced India’s first indigenous car, the Tata Indica, in 1998. The Tata Indica, which was Ratan Tata’s dream project, was a flop. Tata Motors opted to sell its young automobile company after only a year due to low sales. “In 1999, they decided to talk to American behemoth Ford about making a deal,” Birla wrote.
Ratan Tata and his team traveled to America to see Bill Ford, who was the chairman of Ford at the time. According to legend, at this meeting, Ford “humiliated” Tata.
According to the American businessman, Tata should never have entered the vehicle manufacturing business. “They told us, you don’t know anything about cars, why did you start the passenger car segment at all,” a team member, Pravin Kadle, recalled at a 2015 event.
Bill Ford allegedly said that by purchasing Tata’s automobile division, Ford would be doing them a favor.
“They couldn’t agree on anything.” As a result of the embarrassing event, Ratan Tata became even more focused on his goals. As he finished the account, Vedant Birla wrote, “Ratan Tata opted not to sell the production unit.”
“What happened after that is one of the best failure-to-success stories in business,” he continued.
After the ‘Great Recession of 2008, Tatas were on the edge of insolvency, while Ford was on the cusp of bankruptcy. That is when Ratan Tata bid to buy two legendary Ford brands: Jaguar and Land Rover.
He concluded the $2.3 billion all-cash acquisition of Jaguar and Land Rover from Ford in June 2008.
According to Firstpost, “Ford chairman Bill Ford praised Tata, stating ‘you are doing us a huge favour by buying JLR,'” Kadle said in 2015.
For Birla, the purchase of Jaguar Land Rover and its subsequent transformation into a profitable company was an act of “beautiful revenge by a brilliant leader.”
“Tata made Jaguar Land Rover one of the most lucrative companies in the business. As he completed his story, he commented on Twitter, “And today JLR is the backbone of Tata’s finances.”
Tata Motors, a division of the Tata Group, is now a major worldwide automaker. Jaguar Land Rover and Tata Daewoo are two of its 104 direct and indirect subsidiaries worldwide.
