Pathbreakers 2
Those of us who head industries, ought to focus on what we can really do to make the world a safer place, 50 or 100 years from now

Here is how Ratan Tata narrated his journey to becoming one of India’s finest corporate achievers

Left to himself, Ratan Tata would have been working as an architect in the warm climate of Los Angeles. From being a reluctant apprentice, not knowing what to do on the shopfloor of Telco at Jamshedpur, thanks to several quirks of fate, he found himself heading the Tata group in 1991. When he took over the reins, the group had a great image but was not driven by a unified strategic vision. Tata gave the group a vision and went about restructuring it inside out, even as the Indian economy opened up to global competition. For 16 years since then, under Tata’s leadership, almost every major company of the group has displayed extraordinary and calculated aggression. He has created billions of dollars of market-cap even as Tata Steel made the historic $8 billion acquisition of Corus. Tata Tea bought Tetley by beating Nestle. Tata Motors successfully launched passenger cars that have caught the world’s attention and bought the assets of Daewoo in Korea. And now, Ratan Tata is planning to rewrite automobile history, by putting a Rs1 lakh car on Indian roads. Not bad for a shy man who was so bored in his initial years with the Tatas that he almost went back to the US, was ignored and sidelined by the chieftains of the different Tata companies and had little opportunity to implement his vision and strategy until he was in his 50s. Tata narrated his journey to become India’s finest corporate achievers to MoneyLIFE editors Sucheta Dalal and Debashis Basu.


ML: Can you tell us a little about your childhood and where you were born?
RT: I was born in Mumbai, I can’t remember when (laughs). I grew up in Tata House, which is now the head office of Deutsche Bank; it was the house that my grandfather built but never lived to see it completed. My grandmother lived there and my father lived with her; so I grew up in that house. I went to school in Mumbai; most of my schooling was in Campion School, but the last three years were at Cathedral School because Campion ran out of classes. I joined Campion when it had started and each year it added a class; finally they didn’t have the money to continue for a while and a whole host of us had to go somewhere else. So people like, let’s say Bipin Mehta, who was in Campion went to St. Mary’s; his brother Zubin, who was in my class, but a year older, or for that matter Yusuf Hamied of Cipla, also went to St. Mary’s School. Some of us, like Ashok Birla and others, came to Cathedral School. So the last three years, I was in Cathedral School and did my Senior Cambridge from there and went overseas.
 

ML: You had some illustrious schoolmates - what kind of influence, if any, did they have on you?
RT: Nothing. In those days what did school children do? We were all part of the same class. I can’t even remember, for example, whether Ashok Birla was in Campion, I know he was in Cathedral and then left to go somewhere else. Yes, I think he was in my class for one year and then went to another school, I don’t know where. Rahul Bajaj was in my class in Cathedral …

 

ML: You were all sure of your destiny then as industrialists?
RT: Yes. By the way, another correction - I think Yusuf Hamied was also in Cathedral School. He didn’t come from Campion but he was in Cathedral. It is a little difficult to remember who was where. There was Dinshaw Pundole who was a classmate. He was a major squash player and ended up being the owner of Duke’s drinks which was later sold to Coke.

In those days, we were just a bunch of fun-loving kids who were friends. We didn’t have any of the animosity to contend with (laughs). Then I went to the US. I had to go to a Prep school for a year because the College Board exams could not be taken in India at that time. Now you can take them here. I went to Cornell University. My father wanted me to become an engineer; so I spent two years at Cornell as an engineering student, didn’t like it and switched to architecture – which is what I wanted to do – and graduated as an architect. I went on to complete structural engineering, which was more to my liking and interest, rather than mechanical engineering, and graduated. I had a very happy time at Cornell; the five-year course for the architecture degree, along with the two-year structural engineering programme, made it seven years. Mainly because architecture design is a five-year degree course and you cannot get a credit for anything, you have to go through the full five years. So I had a happy time at Cornell; the only thing I did not like was the cold weather. It was something that I never got used to and, probably, never will. However warm you dress, you were never warm enough. So after I graduated, I wanted to be in some place where it was warmer and ended up in Los Angeles in an architect’s office. I would not have come back to India, since I was very happy there. But my grandmother fell ill and she asked for me; so I came back. And one thing led to another and I stayed here indefinitely because she continued to be ill. One day, J.R.D. Tata called me and said that I should be with the group even if it was temporary. So I was sent to Jamshedpur and spent six months with Telco (now Tata Motors).

 

ML: Which year was this?
RT: December 1962 to early 1963. Those six months, at that time, were horrible. But, looking back, I think they were very useful six months. I spent time in different departments on the shop floor of Telco. It was horrible at that time because you had nothing to do and you can imagine being in a particular shop for a week with no assignment and no place to sit. You can’t stand still; and every time you went near a worker, he thought you were doing a time & motion study. He didn’t know whether you were looking over his shoulders, when all you were trying to do is to learn, since you had nothing else to do. So it was a horrible six months. But looking back on it, I developed a wide knowledge base, which surprises some people. They wonder how I know about heat treatment or milling or something… it is because I spent six months in the company. The Pune plant did not exist at that time or probably was in the process of being built. At the end of those six months, I vowed that I would never work in Telco and I was moved to Tata Steel.

 

ML: What did you want to do at that point of time?
RT: In fact, at that point of time, all I wanted to do was a job. And I was being sent on endless training or induction programmes. Somewhere during the time I was in Jamshedpur, my grandmother (Navjibai) died. So I felt free to return to the US; in fact, on two or three occasions I almost did that. I didn’t really have anything that I wanted to do. I only wanted to have a job that I could be responsible for. In some ways, I did that for two years at Tata Steel. I again spent some time on the shop floor, and I went through various departments, but on a much more organised basis. I didn’t have that same sense of not having anything to do. It was quite structured and I was attached to the superintendent of each department and I used to be given many minuscule, unimportant assignments; but assignments nevertheless. I then ended up in the engineering office where I really got my teeth into some reasonable projects, one of which is Tata Steel’s growth shop today. There were several major projects at Tata Steel, including the expansion plan. I ended up at last, as technical assistant to the managing director who was at that time called the director-in-charge of Tata Steel – Mr Nanavati.

Then I was called back to Mumbai and a little while after that I was shipped out to Australia to set up a joint venture for Tatas. It was with a cash rich, pastoral company with little industrial experience. The Tatas were supposed to bring in experience to forge an industrial enterprise. We formed the joint venture and we did some business; but obviously their thrust was on farm-related work and they were not interested in the projects we put up. I came back. The joint venture stayed on for about two years and was then wound up, as I had thought it would be.

I came back to India and did a small stint with TCS at that time. This was in 1971. It was the early days of software exports. Actually it wasn’t software; it was something totally different. We had documents coming in from the US and they would be converted into punch cards and sent out. That was the extent of the software – document transfer from paper to punch card. TCS, at that time, had hundreds of punch-card operators who were converting documents into invoices and other things that could be processed. The good thing was that everything was being done within 24 hours and sent back to the US. I was involved in that when it had just started. Mr S. Ramadorai had not still joined.

After TCS, I was made the director-in-charge of Nelco (The National Radio & Electronics Company) which, at that time, was losing a large amount of money. For some reason, Nelco, in perception terms, is something that is held against me. Actually, it was a great success story because during my time with Nelco, we moved the market share of radios from 2% to 20%. We wiped out the losses and paid dividends. The only thing that we didn’t do (which is because we did not get any infusion of cash from the Tatas) is that we didn’t really grow. The consumer electronics business needed a lot of cash to grow.

 

ML: Which year was this?
RT: I was involved in Nelco from 1971 to 1984. I can’t remember the figures… but you would see that during that period, Nelco’s revenues went up, it wiped out the losses, the market share of products went up, and we started manufacturing televisions sets. Importantly, we also went into industrial electronics. Wipro and Nelco were the only two manufacturers of minicomputers. We went into drives, process control equipment and inverters which later got sold to Liebert. But, for some reason, everybody thought Nelco was a failure; in a way, it was a failure, only because it did not grow to become the number one electronics manufacturer in the country, because we didn’t infuse cash. Part of that was because, with the exception of J.R.D. Tata, everybody thought that radios were not the business that the Tatas should be in.

 

ML: Even though later on it became a television manufacturer?
RT: By the time we were given a licence to manufacture television sets, so was everybody else. At that time ECIL (Electronics Corporation of India Limited) was the only major company allowed to manufacture TV sets; otherwise, only small-scale units were permitted. So our big growth was in industrial electronics. I was in that until 1984.

 

ML: That is around the time you wrote the famous Ratan Tata plan.
RT: Yeah. Around 1982, my mother was diagnosed as having cancer and I had just been made the chairman of Tata Industries, which was more of a titular thing, because there was nothing in Tata Industries; it was a shell company from the erstwhile managing agency days. So I thought, well, why not sit down and make a strategic plan? I had taken three months leave to be with my mother and I actually sat in the hospital and wrote that plan. After she died, I came back and presented that plan. Everybody said ‘it is very nice but it is not going to happen’. That’s because the plan talked about going into certain high-tech areas which were till then closed to the private sector. The management turned down that plan. I said, ‘well, I am the chairman of Tata Industries, so why don’t we go into these high-tech areas for Tata Industries?’ And we did. We entered into joint ventures with IBM, Honeywell, etc. Then, in 1984, Rajiv (late-former PM Rajiv Gandhi) came into power. It had no bearing on my plan, but it was as though he had the same view. So certain areas began to be opened up for the private sector. Telecom opened up - you were able to produce PABXs and telecom instruments. So we got into those areas. Areas that were in my plan such as VSAT (Very Small Aperture Terminal) communications didn’t get passed at that time, but the groundwork for that got done. Some parts of the telecom sector were opened up instead of saying that ITI (Indian Telephone Industries) would be the only manufacturer. The government also said that the main exchanges would come from different sources. So it became very exciting. Everybody looks at the 1990s as the period when reforms started, but actually they started during Mrs Gandhi’s (Indira Gandhi) time and Rajiv took it further. I had established, not a close relationship but a very exciting relationship with Rajiv Gandhi in terms of trying to do things in the country. We were exchanging ideas and he was actually executing many of them. Those were the days when Arun Singh and Arun Nehru were his advisors. I think, if I look back, those were probably the most exciting days of my career in India – the early days of Rajiv’s prime ministership. I was very fortunate to be a part of that period.

 

ML: What sort of things, for example?
RT: The things I just talked about. For instance, if somebody said: why can’t you have broad banding of licensing? Why should you be allowed to produce only trucks of over seven tonnes? If you have a licence for typewriters and technology becomes available for electric typewriters and electronic typewriters, why did you have to go and get a new licence each time? Why couldn’t you have a licence for typewriters and include whatever typewriter technology was available? You were heard. It is these kinds of changes that started then and were tremendously invigorating. I remember that Nelco had a licence to manufacture 2,000 calculators; and if you produced 2,010 calculators, you could be prosecuted. These were the kinds of issues that confounded one. You cannot set up operations for 2,000 units. We were hit by calculators smuggled from Taiwan where they could make 10,000 pieces a month. Those were the changes that were extremely exciting, but it sort of petered out after the first 18 months. I was fortunate enough to have had an opportunity to exchange views with Rajiv and be a part of the small group of people he called from time to time to seek opinions on some of these areas. Around that time, he made me the chairman of Air India. Like so many things that happened in the government, I was never asked (laughs heartily). Rahul (Rahul Bajaj) was made chairman of Indian Airlines. At least I was in India, but Rahul was overseas. We weren’t even told that we were going to be made chairmen; it was simply announced that we had been made the chairmen of Air India and Indian Airlines, respectively. For three years, I was in Air India. They were fairly unhappy years because during that time there was a lot of politicising of Air India which we won’t go into. The Rajan Jetley era and so on were sort of troublesome times and there were divergent views. I wanted to resign, but Rajiv refused to let that happen. So the day he lost power, I quit. I think I gained the ire of V.P. Singh who came into power and who may have thought that it was a reflection on his leadership, but it was not; it was only an issue of getting away from the political swings of Air India. Then things get a bit hazy in my mind, during that time…

 

ML: The Bombay House issues of succession started appearing in the media…
RT: There was the shoot-out at Tata Steel, there was the Telco strike with Rajan Nair… we had some troubled years.

 

ML: Then there was the face-off with the V.P. Singh government when J.R.D. Tata wrote a strong letter to V.P. Singh about allegations of foreign exchange violations over Tata Zug.
RT: Yes, there was that also. Bhure Lal (former director of enforcement, foreign exchange) was heading an investigation. I don’t believe we did anything wrong and also everything was disclosed -- it was an issue of whether the child of a parent or the grand child of the parent company also needed to have the Reserve Bank’s approval/permission to register or not. The issue never really came to be proven because they couldn’t find anything that we hadn’t disclosed. I think that issue revolved more around Indian Hotels rather than the Tatas because Indian Hotels had a lot of foreign operations at that time. Anyway, after that things become hazy in my mind until 1991.

 

ML: Can we go back to the Air India phase? This was an airline that belonged to the Tatas (until it was nationalised by the government in 1951). The experiment to ask private sector industrialists to head it failed at that time, but do you think it could have worked under different circumstances?
RT: At that time, it was in effect changing the board to a private sector board. Apart from me, there were several private sector people on the board. So both Air India and Indian Airlines had private sector chairmen and a group of private sector people. There were two problems with that model. One was that the Civil Aviation Ministry did not wish to let go of its control. Initially, I had considerable misunderstanding with Mr Jagdish Tytler who was the civil aviation minister then. But later, I had a very good understanding with him and had no problem at all. I found that if you could go and explain something to him, he understood and would not stand in your way. But in the early days, the ministry representative on the board would object to everything I did. It was a no-go kind of situation. I found a way to work around this situation, which was to go into the issue before the meeting and discuss it; that worked reasonably well. The other thing that did not work is that Air India had become politicised and various people had developed vested interests. The senior employees and senior managers had links with ministers or MPs. I remember the time we wanted to start non-stop flights to London. Air India used to stop at Dubai purely because of vested interests. Dubai was only two hours away from Mumbai, but the flight crew would get two days off in Dubai and an allowance. On the next leg to London, you got two days off; New York three days off. Every other airline was flying direct to London. When we tried to change it, it brought all kind of forces into the forum and we were told how we were endangering the pilots’ health and being inhuman and so on. It was that kind of thing… every time we wanted to do something, there was a vested interest or a constituency that wanted us to leave it alone. Often, the ministry was a part of it and backed some of these people. If the ministry had left the company alone, to be run by its representatives who would wear the hat of directors of that enterprise and keep its interest in mind, then I think it would work. It works in France and some other places and it would work here; the only difference would be that, instead of reporting to a bunch of shareholders, you would report to the ministry as the owner. You would be responsible for the results and would be given the freedom to deliver those results.

 

ML: Will you tell us about taking over at Tata Sons?
RT: All I remember is… this was J.R.D.’s room … he had developed a minor heart ailment at Jamshedpur and was hospitalised. He was in the hospital when I came back from an overseas trip. I used to call on him everyday. Then he came out of the hospital. On a Monday, which was the day I used to meet him here, he told me that he planned to step down in my favour. I think it was driven by his heart problem or a feeling that he was not as well as he would have liked to be.

People have asked me whether that was a surprise. Yes, it was a surprise, because at various times there were different people who were his choice of successor, which was okay by me. In fact, all along, I had assumed that one or the other of them would be his successor. I had only said to him, ‘don’t step down in favour of different people; step down in favour of only one person so that that person would have the strength’. So when I was chosen, I was a little surprised. When that took place, I set myself the task of restructuring the group. Much of it was the same plan as the 1982 plan, dressed somewhat differently by McKinsey. They did a wonderful job of representing the same plan, with one big difference; it now looked at portfolios rather than businesses. After that, we have kind of come back to businesses. My plan looked at businesses and they were looking at portfolios and companies as investments. This plan was accepted and we moved forward to restructure the group. “Restructuring” is, in fact, a bad term to describe the process; that’s one thing that we did not do too well. We did a lot things; but trying to reduce the diversity of the group to a fewer number of companies, fewer number of businesses, which is what we set out to do, is something we did not achieve. One of the reasons why we did not achieve that had to do with me. One of the first things we did when I took over was to decide what to do with Tomco (The Tata Oil Mills Company Ltd), which was losing money and had lost market share. Its management said, if I remember the figures, that we had to invest Rs80 crore for the next five years and we would not see any profits.

So I told J.R.D. ‘why should we do this’? I told him, we should change the management or we should sell the company. I said, in my plan, there is no Tata Oil Mills, no Lakme and no textiles. So I said, ‘why don’t we look for a buyer for Tomco?’ That buyer, of course, was Hindustan Lever (now Hindustan Unilever), the arch enemy of Tomco and its greatest competitor for many years. The power centre within Tomco saw it as a grand betrayal of the Tata ethos. Here I had just come in and was selling the company to our greatest competitor and that too after having carved out a market in India as being the only Indian company to stand up to Levers! My father was the managing director of Tomco for many years and did much of that building up. But there weren’t many people who thought that it was a great idea. On the other hand, we perhaps did the most dignified thing; we ensured that shareholders had a good share in place of Tomco, we got Levers to agree to a three-year, no-touch situation for all employees, suppliers and dealers with no closure of operations. So, rather than go terminally ill, we thought this was a very dignified solution where everyone’s interests were safeguarded. If we had done it differently, we could perhaps have got more for our shares than we did, but I thought that it was a very good deal. What I didn’t take into account was the flak I’d get from the media and everyone else.

As I look back, that probably was one of the major reasons why the subsequent restructuring really slowed down and I became very sensitive to “Can I do it in this company?” So we went through internal restructuring -- clustering companies with the same business under one major company which were all internal arrangements. I did not even look outside. We undertook an internal monitoring structure. What we did do successfully was to set some goals for companies to be competitive. We set some criteria for the companies. If not, we would restructure them or divest from them, etc. We forced the companies to devise a strategy for themselves that not only defined their domestic competitiveness but also eventually their global competitiveness.

This, I think, was a big turning point, because most of our companies hadn’t begun to think of themselves in a truly competitive world -- leave alone a global world, not even an Indian world. So Telco would be quite happy to let Ashok Leyland increase market share so long as they were doing okay. Nelco, which at one time had 85% share of the radio market, allowed themselves to come down to 2% by thinking transistors were toys, and stayed in valves; while Bush and others went into transistors. We focused on ourselves and forgot about the world around. I think perhaps, of all the contribution, that exercise was most valuable -- of forcing companies to have a strategic plan for themselves about where they were going, defend the path which they had decided and meet the criteria that we had set.

Intangibly, this was probably the most important thing that happened. There was a lot of resistance to it in terms of ‘what is your locus standi to dictate it to us?’ and ‘you may have a 26% stake, but how can you tell me to do this and not that?’ It became an issue of persuasion and some of these issues are quite significant. For example, one might be going into passenger cars from trucks. I was there so that wasn’t a question of convincing anybody, although that’s another story. But let’s say Tata Tea going out from the plantation business into branded products. It was a significant difference, because the mindset at Tata Tea was to grow in the plantation business. Suddenly it was freed of that and could buy its tea from anywhere, like any other tea company and it could focus on blending and branding products. Moving Tata Tea from a traditional tea company to a beverage company or a health-based wellness company -- all those have come out of a new mindset of not doing businesses the way you did them earlier or being reactive to your competition, but forging a new path for yourself. I think that was the most significant achievement of the restructuring.

 

ML: Some of the new businesses that the Tatas entered into - was the objective to move away from commodity businesses to new businesses with high margins? In that case, a lot of the money is again coming from commodity-type businesses such as Tisco…
RT: I never wanted to move the group away; I was just giving emphasis to inching into new areas. My hypothesis in the early 1980s was that Jamshetji Tata entered new businesses at the turn of the century -- businesses that Indian companies did not want to enter. They were indeed heavy industries -- steel, power, textiles, etc., but they broke new ground. What I was saying was that, in the 1980s, there were new technologies on the horizon such as biotechnology, electronics, computing, artificial intelligence and communications. So why don’t we, at this time, have a new wave for Tatas to get into these businesses? Never did I say - other than getting out of soaps and textiles and in those areas - never did I say that we should get out of steel or anything of that nature. In fact, what I was advocating at that time, which was not done in the Russi Mody era but was done later, was that we should get into flat products in steel and work up the value chain to high-end steel rather than the conventional construction steel, etc., which Tata Steel was doing those days. So it’s not true that I wanted to move the group away from our traditional businesses.

 

ML: The Tatas are now at the forefront of international expansion, mainly through aggressive acquisitions. Is this something that happened because you think opportunities in India are not significant or had you always planned on looking for growth outside? What was the origin of this move?
RT: It is part of my plan. You know, I have this annual meeting of communicating with the group and this has been the message over the past three years. I am delighted that the group has reacted to that. Where it started was … I forget the years -- I think it was in 1999 when Telco had its big loss. If you look at my chairman’s statement for two to three years, I had kept saying that the kind of growth we have been seeing cannot continue; we will probably see some downturn, but it did not happen. And then it suddenly happened. When it did, it was quite bad. The market shrank by about 40%. We had 60% share of the market; so what do you do? You can’t close down the plant, retrench people, or do any of those things that your counterparts would do abroad. So we just sat there and bled. We didn’t lose market share … we still had a 65% market share of a shrunk market. But we had capacity that was underutilised. We had nowhere to turn. That led me to believe that we must not focus on just one economy; we must be able to spread ourselves to multiple economies where this may be done, but that may be difficult. And that led me to say that we cannot be an India-centric group; we must, in fact, start to look very seriously, not just at exports, but at building capacities in serious businesses in other countries. So that was the genesis.

 

ML: Is there a pitfall to your international expansion?
RT: There is always a pitfall to anything you do. I was going to say, if you take risks, there will be pitfalls; but even if you don’t take risks, there can still be pitfalls. Another thing that I advocated very early when I took over, was that we should look at acquisitions and mergers as an inorganic means of growth, not organic growth alone. I think globalisation just made the availability of target companies that much bigger than they were in India. That would be the only difference.

 

ML: You were telling us about Telco, would you tell us how the decision to go into passenger cars came about?
RT: Okay. You know Mr Moolgaonkar (Sumant Moolgaonkar was a legendary former chairman of Telco) and J.R.D. wanted to go into passenger cars much earlier than my involvement in Telco. I think they put up two or three proposals to the government which were all rejected, because of vested interests from the existing car players. And, as you may recall, Mr Moolgaonkar was actually the founder chairman of Maruti Udyog. He resigned, I think wrongly, because Maruti looked at passenger cars instead of commercial vehicles. He thought that there was a need for commercial vehicles in the country, even though it would mean that it was competition for Telco; but because they looked at passenger cars, he thought it was the wrong thing to do and resigned. I felt that since we already had 60% share of the commercial vehicle business, how much farther can we go in that segment? We needed to have another segment. I always felt that the car segment was going to grow; I felt that the buying public was going to move to cars and I was not wrong. From selling 50,000 cars a year for so many years, who would have thought that we would produce and sell one million cars in India? So, having been in the television business and seeing that grow, I was quite convinced that the car business was going to be a big business, provided we were at the lower end. So we set ourselves the task of designing and manufacturing the car, despite the fact that many people said it couldn’t be done. And that’s how we got into the car business.

 

ML: And now you are moving down into the Rs one lakh car; do you still think that the big market is at that end?
RT: Well, even when we entered the car business I always felt that about 60% of the market would be at the low end which, indeed, it is. In fact it’s the exact percentage that I had thought. And it’s an arbitrary low end because what I said at that time was that it was below Rs four lakh. So the question is: what is low? You have got the bottom end of that range; the challenge is whether you can change that bottom end and hit a broader base. Conventional wisdom says no; then you set yourself a task and ask: why not? And suppose you really make an attempt to do that, then you start with a clean sheet of paper and you start looking at all materials and see what you can do to reduce costs. You use adhesive instead of welding; you look at pigmenting instead of painting; and you look at a whole host of issues like that and wonder why we can’t get a car at that kind of price. If you have a bright team of young people who share that same kind of quest, you realise, yes, you can.

The first thought we had was that of a car that will have no doors, or curtains instead of windows – not a bad thought. The genesis of that was: Why should four people endanger their lives by riding a scooter on slippery roads, a child in front and the mother holding a baby at the back? Can there be a better form of transport for them? And can it be at an affordable price? It wasn’t a bad solution -- it would have four wheels, seats and a curtain, so the passengers would be protected against rain. It won’t be a car but a four-wheeled transport.

That’s how it started. Then, as we went along, it became clear that the consumer will not accept a glorified auto-rickshaw, but is willing to buy a car. So the doors got added on, the wind-up windows got added, and we finally ended with a car. Very easy to let the Rs one lakh kind of drift up; but we kept it at the same level. What we would like to offer is a Rs one lakh car and then an up-market version of it which we hope more people will get and may even have things like air-conditioning; but it would still be a very economic car. The only person who has taken our effort seriously is Mr Carlos Ghosn (CEO of both Renault and Nissan worldwide) who has recognised that it seems to be happening and that there is virtue in looking at developing a low-cost car in India. But everybody, including Mr Suzuki, said that it is not possible; and that makes it exciting because then it’s even more challenging.

 

ML: You said 25 years ago that there was need for a change in the direction of the group towards technology orientation. Is there need for a new direction today?
RT: You have really caught me off guard. If you were to challenge me, I would say that there may be areas that one may want to enter – like nuclear power, or retailing or real estate or whatever, wherever there are opportunities - even alternate fuels, because it reduces our dependence on fossil fuels. But all of those, in a manner of speaking, are mundane extensions of existing businesses. Today, I think some of us, like Mukesh Ambani, myself and those of us who head industrial units, ought to really focus on what we can really do to make the world a safer place, maybe 50 or 100 years from now. And that brings us to an issue that we should address in our own way.
For instance, how can we deal with climate change and global warming, right now? The effects of it may not be felt now; in fact, we may pay a price for it today, but it will help the generations to follow. So can we use our visibility to create an awareness of the need to do something? Can we, in our own businesses, be conscious of this and set an example? For instance, I was, many years ago the prime mover in getting Tata Steel to rid itself of all the emissions that came out of the chimneys at Jamshedpur. You could not fly over Jamshedpur then, because of all the smog from the chimneys. Today, there is nothing coming out of the chimneys. We put in anti-pollution equipment and we are very pleased that we could do it. Did it cost us more? Of course, it did cost us an enormous amount more. Have we improved the quality of life of our employees by removing the red dust that was there everywhere in Jamshedpur – on all the trees and everywhere? Yes we have. Jamshedpur has become a different place.

Telco, long before my time, planted 2,000 trees – it was a terrific thing for a company to do what was not related to its business. Can we create awareness about not polluting our waters? Can we be more sensitive to the environment, not so much by enforcement or by government dictum, but by our own effort? I have been spending a fair amount of time looking at alternate fuels, including hydrogen as a fuel in the future. I headed a government committee to see if it can be a fuel for motorcars in the coming years. Can we look at processes that will be kinder to the environment than we have been, and more sensitive? In fact, I am about to create a cell in Tatas that will look at just that and scan the technologies available that will result in success. Some of these new technologies will, in fact be translated into businesses. But, for most parts, just let’s look at our own businesses to see how we can design green buildings that will reduce energy consumption by ‘X%’; can we design our factories – I am talking about what may seem ridiculous today – but can we put solar panels on the rooftops of all our factories and see if we can harness the sun? Can we be more self-sufficient in power than we are today? It is these kinds of things that, I think, I would like to create in the short time that I have.

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