On this day in 2008, Tata Motors completed the deal to acquire two luxury car brands, Jaguar and Land Rover, from Ford. Not only was the deal a huge professional success for the Indian automaker, it was also represented a personal victory for Ratan Tata. The story of Tata’s “revenge” on Ford was recounted by Vedant Birla in a Twitter thread this morning.
“The revenge story of Tata, especially Ratan Tata ji, over Ford is truly the story of massive success too,” wrote Vedant Birla, Chairman of Birla Precision Technologies.
In 1998, Tata Motors had launched Tata Indica, India's first indigenous car. A dream project of Ratan Tata’s, the Tata Indica however failed to take off. Due to low sales, Tata Motors decided to sell off its fledgling car business within a year of its debut. “They decided to talk with American giant Ford to cut a deal in 1999,” wrote Birla.
Ratan Tata and his team flew to the United States to meet Bill Ford, who was then the chairman of Ford. The story goes that Tata was “humiliated” by Ford during this meeting.
The American businessman apparently said that Tata should never have entered the car manufacturing business. Recalling the incident during an event in 2015, Pravin Kadle, who was part of the team, said: “They told us 'you do not know anything, why did you start the passenger car division at all.”
Bill Ford apparently said that Ford would be doing Tata a favour by buying their car division.
“They didn’t arrive at any deal. The mortifying experience only made Ratan Tata more focused on his goals. Ratan Tata decided not to sell the production unit,” wrote Vedant Birla as he continued the story.
“What happened later is one of the best failures-turned-success moments in the business world,” he added.
Nine years later, things had changed for the Tatas, while Ford was on the verge of bankruptcy following the ‘Great Recession’ of 2008. That’s when Ratan Tata offered to buy two iconic brands of the Ford portfolio – Jaguar and Land Rover.
In June 2008, he completed the deal to acquire Jaguar and Land Rover from Ford in an all-cash deal of $2.3 billion.
“Ford chairman Bill Ford thanked Tata, saying 'you are doing us a big favour by buying JLR'," Kadle recalled in 2015, according to Firstpost.
For Birla, the acquisition of Jaguar Land Rover, and its subsequent turnaround into a successful business, represented an act of “beautiful revenge by a visionary leader”.
“Tata turned JLR into one of the most profitable in the industry. And today JLR is the backbone of Tata's finances,” he wrote on Twitter as he concluded his story.
Tata Motors, part of the Tata Group, is today a leading global automobile manufacturer. It has 104 direct and indirect subsidiaries worldwide, including Jaguar Land Rover and Tata Daewoo.
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