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Mr. Tata goes to the USA

From Anantha On 2 July 2008 View Comments

The ink has not even dried on the papers and the goodwill has started to flow in. Barely a month has gone by after he signed a $2.3 billion deal to buy prestigious, but ailing British car makers Jaguar and Land Rover from their overlords in Detroit, Ratan Tata is already doing his bit for their turnaround.

A few weeks ago, barely days after the deal was signed, UK’s premier car magazine, Autocar, reported that Tata had toured Jaguar and Land Rover’s facilities for a week and come off complimenting the ‘can do’ spirit of the companies. While that is not cause for any surprise really, what caught the eye in that article was that he was going to tour the US later on and meet with the dealers of the two brands.

And as Autoweek has reported (via Autoblog), this tour has taken some of the oldest and the biggest dealers of the two brands in the US (who opposed the deal vehemently) by pleasant surprise (link).

“I was wrong,” Gorin now admits, speaking by phone on Friday, June 27, from Jaguar’s design center in Whitley, England. “Any concern I may have had has been completely dispelled. I couldn’t be more impressed.

If one was to believe the words of the dealers, Mr. Tata’s tour seems to be setting benchmarks for the whole auto industry (link)

“I’ve been a Jaguar dealer for 40 years,” says Norm Tompkins, owner of San Jose British Motors near San Francisco, whom Tata invited to lunch. “In all the years Ford owned us, I never met a single Ford executive.”

Tata’s entourage which has included several members of his top management team was flown in on his own personal jet and his personal touch seems to have reached out to the hearts of the dealers and made them rue the lack of similar treatment from their own parents.

“I was never hugged as much by my own father as I was hugged by him,” Aron admits. Aron, one of the first Jaguar dealers in the United States, invited Tata to his 55-year-old Imperial Motors store in Wilmette, Ill.

“He embraces you and touches you, which is a good thing. To me, that’s the sign of a very warmhearted person.

“I’m telling you this,” Aron says, growing serious: “He’s going to make something out of Jaguar. We’re in good hands now. My son can see his future here now.”

And Tata seems to have conveyed the message that he means business by calling a few Chicago area dealers for a dinner meeting.

Over steaks, the chairman and his secretary took notes on the comments. Dealers asked the new owner for a convertible Jaguar sports car. They alerted Tata that Bentley, owned by Volkswagen AG, has become a fierce new competitor for them and that Jaguar must have a higher-end car to compete with Bentley.

And during subsequent visits to these dealers’ facilities, Tata and his team gathered minutiae about the day to day operations.

“Can I tell you what he wanted to know?” Aron asks in mild amazement. ” ‘Mr. Aron,’ he said to me, ‘How many technicians do you have here? What is your profit margin on parts? What is your absorption rate?’ ” Aron says, referring to the percentage of a dealership’s operating costs covered by the service department.

“What is your absorption rate! Can you imagine the head of an automaker bothering to travel around the world to sit here and talk to me about such day-to-day business details? And he wrote down my answers!”

While this visit seems to have done a great deal towards establishing goodwill for Jaguar/Land Rovers’ new owners among the dealers, a lot of work still needs to be done. Both Jaguar and Land Rover have seen decline in the past years thanks to some unimaginative management by Ford. In the same period, competitors like Bentley and Aston Martin have grown impressively, both in terms of market share as well as brand consciousness.

A complete divorce from Ford’s legacy of mismanagement is perhaps needed. And Tata’s pleasantly unexpected visit is possibly the first step toward a turnaround that should, IMHO, most certainly include more offerings like the new XF. Maybe there’s some hope for these brands after all.

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  • Awesome post, and I have always been a fan of Tata's managerial style and the importance they give to it. Nano was considered a marvel combined of both good engineering and good management policies. Most Japanese car makers, I hear are the leaders because of their management skills which american auto makers seem to lag behind in.
    This is a good start + good PR + a wonderful confidence building measure.
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