Tata Group history is also the history of Indian industry
The history of a behemoth that is also the history of Indian industry
T.R. Doongaji hails from Nagpur, the place where Jamsetji Nusserwanji Tata started his first venture, Empress Mills, in 1877. When he was around six years old, Doongaji’s cousin would take him to the fire temple where, before entering, he would ask him to touch his head to a bust of “the founder” placed on a pedestal. “I did what he asked me to,” says Doongaji. “Today, I realise that my entire identity is this name.” A J.N. Tata scholar, he spent 52 years (42 in executive capacity) with Tata Group and was managing director in three group companies.
Article by Rachna Tyagi | TNN
A few years ago, some politicians in Nagpur wanted to rename the convocation hall of Nagpur University, the J.N. Tata Hall, to a local leader’s name. A friend from Nagpur called Doongaji, asking if he knew about it. Doongaji dug into the Tata Central Archives to see how the hall was given the name. “We found that the Empress Mills Nagpur had contributed to the funding of the hall, and we had the complete record. We recently won that case in the High Court. I will not allow anybody doing anything with Tata’s name or property,” says the proud Parsi.
Few companies command this kind of loyalty from its people. And, Doongaji attributes it to the leadership of Tata Group. “Between the founder and Cyrus [Mistry], there have been four chairmen—three were knighted and one is a Bharat Ratna,” says Doongaji. “How many groups can claim that quality of leadership?”
It all started when Jamsetji bought a ten-acre piece of marshy land from the Nagpur king and set up Empress Mills. (It was registered in Bombay in 1874 as Central India Spinning, Weaving and Manufacturing Company Limited. Jamsetji had started a trading company in 1868.)
Jamsetji did not want his employees to work in the squalid conditions that he had seen in Lancashire’s cotton mills. So, at Empress Mills, he ensured proper ventilation and had an apparatus installed for humidifying air. Sprinklers were installed to reduce damage by accidental fires. He also set up a provident fund scheme, the first of its kind in India, and an accident compensation fund.
When Jamsetji returned to Bombay, he had made enough money and he turned his attention to purchasing property. Soon, he became one of the wealthiest men in the country. He then began investing in the industrial future of India and drew up plans for many ambitious projects.
The first family: (Standing from left) Jamsetji Tata’s younger son Ratan, Jamsetji and Ratan’s wife; (sitting from left) Jamsetji’s wife Hirabai, Dorabji’s wife Meherbai and Dorabji.
During a visit to the US, at the behest of industrialist George Westinghouse, Jamsetji saw the hydroelectric project at the Niagara Falls. Jamsetji had been planning a hydroelectric project in India and the visit firmed up the decision. In the Lonavala and Khandala areas of the Western Ghats, which gets one of the heaviest rainfalls in the world and has the right kind of soil, valleys and slopes, he began the work for the Tata Hydroelectric Supply Company. Gigantic pipes forced water to the foot of the mountain at Khopoli, where at the power house, it would be converted into electrical energy. This project turned out be a game-changer, as it provided electricity to the growing city of Bombay.
Tata Hydroelectric Supply Company was registered as a public concern on November 7, 1910, and it commissioned the project on February 11, 1915, when Lord Willingdon, the governor of Bombay, inaugurated it. “Today, the major chunk of our power is being supplied to industries, hospitals and residences,” says Rajesh G. Naik, head of operations and maintenance, Tata Power. The total capacity of the plant is 447mw.
A big attraction at the project is the 14-acre garden in Lonavala. Jamsetji had a keen interest in gardens, and he brought home plants and seeds from all over the world. When the steel plant at Jamshedpur was being constructed, he wrote a detailed letter to his son, Dorabji, on the fast-growing variety of trees that he wanted him to plant on the site. Said Vivek Vishwasrao, head of biodiversity at Tata Power: “We fall in the northern part of the Western Ghats which is a major bio-diversity hotspot. Some of the species of plants, animals and birds found here are not found anywhere in the world.” Similarly, the beautiful Tata Baug, built in 1891 on 22 acres in Navsari, is maintained by Dr Rohinton Avari, who has a doctoral degree in landscape horticulture.
Jamsetji was an “omnivorous reader”, and a fan of Dickens and Thackeray. “He was fond of driving, a good judge of horseflesh, and duly proud of his well-bred Arabs, English Hackneys or Hungarians, and of his smart turnout. At times he enjoyed sailing and boating, and entertaining his friends at picnic parties,” writes Frank Harris in his book Jamsetji Nusserwanji Tata: A Chronicle of His Life.
When it comes to ‘firsts’, however, Jehangir Ratanji Dadabhoy Tata’s achievements stand out. From obtaining India’s first pilot’s licence to starting the first cancer hospital in the country, J.R.D. Tata sowed the seeds for a better India. His father, R.D. Tata, was a nephew of Jamsetji’s mother, and his mother, Suzanne Briere, a French citizen. He was born in Paris and spent his childhood in France. After his father’s death, he succeeded him to become a director of Tata Sons at the age of 22.
J.R.D. became Tata Sons chairman in 1938, at the age of 34. The group had 14 companies then. When he stepped down in 1991, there were 95. But his contributions went well beyond Tata Group and its businesses. For instance, he helped Homi Bhabha set up India’s atomic energy programme. Then he helped Homi Bhabha’s brother Jamshed Bhabha set up the National Centre for Performing Arts (NCPA) in Mumbai.
Matter of loyalty: T.R. Doongaji | Janak Bhat
The brightest star among the companies that J.R.D. started was Tata Airlines (which later became Air India), as it quickly earned a global reputation as one of the finest carriers. “J.R.D. would always say that Air India was his first love, and I would hope that he would say that Tata Steel was his second,” says J.J. Irani, former managing director of Tata Steel. “He would laugh at that, but he never gave me an answer.”
Irani says J.R.D. was parsimonious. “Even though he was at the helm of the Tata Group for 53 years, he never owned a personal plane,” he says. “The house he stayed in was not his own; it was rented.”
“J.R.D. was a man of principles,” says Irani. “One day he came to office looking glum, and at lunch he said, ‘I’ve lost my pen set. I was very attached to it.’ I made a note of it. A few days later, I was in London, and I dug it out, bought it and on my return gave it to him. His first impression was that of great happiness. ‘Yes, exactly like mine,’ he said. Then I saw his expression changing. ‘No, Jamshed, this would be breaking my principle of accepting gifts from officers,’ he said. I said, ‘But, no one would know.’ And he said something very important, ‘Yes, I know you won’t tell anybody, but I would know, and that’s not acceptable to me.’ He returned it to me. I still have it.”
J.R.D. worked through empowerment, and was a master delegator. “He created stalwarts like [Sumant] Moolgaokar, [Russi] Mody, [Ajit] Kerkar and [Darbari] Seth,” says Doongaji. “He operated through empowering people.”
Ratan Naval Tata, who took over from J.R.D. in 1991, had an entirely different task at hand. “Liberalisation suddenly happened when Ratan Tata took over, and Tata holding in Tata Steel was just four per cent. Ratan had the task of protecting it. So, again, consolidation had to happen. He actually insulated us from becoming sitting ducks for takeovers. It was a big task, and he has achieved that,” says Doongaji.
It is said that many of Ratan Tata’s business moves were not just cold, calculated decisions. “He is a person who uses his right brain a lot,” says R. Gopalakrishnan, author & corporate adviser at Mindworks and a former Tata employee. “Most managers are trained to use their left brain, to be logical, analytical and nobody uses only his left or his right brain. Artists and musicians are trained to use their right brain. Ratan Tata had an unusual combination, I found, where he would allow enough play for his intuition. Maybe coming out of his personality or his training in architecture.”
Ratan Tata spearheaded the group’s global pursuits. It was not just the big-bang purchases like Jaguar-Land Rover or Corus Steel, but also a well-thought-out expansion leveraging the group’s strengths. Tata Chemicals, for instance, had been in the business of salt and soda ash for decades. Then a time came when it was felt that it should start looking for markets other than India. “At that point of time, Ratan Tata had the view that we could be in counter-cyclical products or in counter-cyclical markets; all markets do not go into a downturn at the same time,” says R. Mukundan, managing director, Tata Chemicals. “And, the second view was that if India was going to be open, everybody was going to come in. We were strong enough in India; are we not going to go and address them? Are we just going to be sitting here?”
Ratan Tata | Amey Mansabdar
Tata Chemicals’ strategy was to link the lowest-cost production centre in the world with the most attractive market through the best supply chain. Today, Tata Chemicals’ biggest operation is in Wyoming, US. “It is two and a half million tonnes of naturally mined soda ash. It is a brilliant acquisition which has played out very well for the company; it has been profitable from day one and continues to pay us dividends,” says Mukundan.
One of Tata Group’s biggest investments in India has been the Rs 25,000 crore steel plant in Kalinganagar in Odisha. It is nothing less than a new beginning for the steel giant. “With 3,000 acres of land, we are expanding from three million to eight million tonnes, and we can easily double that if we have the appetite, the money and the balance sheet,” says T.V. Narendran, CEO and managing director, Tata Steel. “It will be one of the most efficient steel plants in the world once we have completed the expansion at eight million tonnes.”
Tata’s future, however, is expected to be less dependent on the traditional businesses; but even the future businesses will be dependent on the Tata brand. “In the aerospace industry, credibility, quality and dependability are extremely crucial, and there is very strong resistance to move from one supplier to another because these things are critical,” says Banmali Agrawala, president (infrastructure, defence and aerospace), about how it got to do business with the likes of Boeing, Airbus, Lockheed Martin and Sikorsky. “So, it is not just cost; there is a whole ecosystem of trust that goes with it. I think we have built that over the last seven years, and in many cases, we are now the single-source suppliers to many of the global OEMs.” Recently, for instance, Boeing was very happy that Tata delivered an order for the fuselage for the Apache helicopters ahead of schedule.
Agrawala says Ratan Tata is a rockstar. He recalls an incident when they were travelling together and talking about planes. “He knows a lot about planes,” says Agrawala. “He educated me about what kind of fighter aircraft featured in the movie Top Gun. I would ask him, how can you make out and he would say, ‘Look at this particular feature, and that’s how you make it out’.” He says Ratan’s mild demeanour is not to be mistaken for weakness. “If we are bidding for a project, we have got to win; if we are trying to buy something, we need to end up buying it; and we better not fail,” says Agrawala.
Guenter Butschek, who had a long career at Mercedes-Benz and a shorter one at Airbus, visited India in 2015 on Diwali week. He loved it, and concluded that if he got a job offer, he and his wife would be “ready for incredible India”. He got many offers, and it was Tata Motors that attracted his attention. He joined the company in 2016, and quickly realised that it had lost a little bit of track and market share in the past few years, and there was “some work required in order to stop the bleeding, to turn the company around and to get it back to its old glory”. “You cannot continuously bleed as a company while trying to reach this higher purpose as far as community is concerned,” he says.
Butschek was amazed at the unique corporate culture at Tata. “The most striking part is Tata’s culturally embedded commitment to the community,” he says. “To say that I am working for a company which is a huge economic powerhouse—but at the same time, a powerhouse as far as nation building and the community support is concerned—made it a very attractive offering.”
Butschek has a clear plan for Tata Motors. “The first quarter [of the next fiscal] is when you will be seeing the Harrier [compact SUV], in its five-seater version, on the road as a diesel version, and in September you are going to see the seven-seater. The premium hatch 45X, which has attracted the attention of many, is going to be in the market in the second half of the first quarter.”
Tata’s 150 years of existence has been the history of Indian industry. And there is only one reason it continues to be as relevant. “The first word associated with Tata is trust,” says Doongaji. “It is the most trusted name. In any country, what is the most important thing that makes you trustworthy? Currency.” Jamsetji Tata is the only businessman to appear on the currency of a country. “You will have Washington or Lincoln, but you will not find a businessman,” he says. “On his 175th birth anniversary, the government of India released a 0100 coin and a 05 coin with Jamsetji Tata’s face on it. What does it say? Epitome of trust, that’s us.
If one is truly interested how the great Tata Story started, one should read the biography of Jamsetji Tata, written in 1925 by Frank Harris. A fine tribute paid by an Englishman to an Indian at he height of British Raj.