At home with Tata

Posted on 13 Dec 2013 by The Manufacturer

Jane Gray blogs from India where she’s undergoing an intensive education in one of the most powerful forces to be reckoned with in British industry – Tata Group.

Jane Gray, Editor, The Manufacturer magazine

Tata’s triumphant acquisition and turnaround of Jaguar Land Rover is well known about in the UK and widely lauded as a move which deflected the last nails in the coffin of British automotive manufacturing.

Tata’s also recognised within relevant industry circles as a significant player in the steel and chemicals markets – and perhaps for its consultancy services.

And yet, even within industry, the full story of Tata’s diversity and importance to the UK economy is hugely underestimated by most and barely even acknowledged by the British public.

Fast facts: Tata Group

Operates in 100 countries worldwide via 100+ companies

Employs 540,000 people worldwide including 50,000 in the UK

Generated $23bn of revenues in the UK in 2012

Tata Sons, the central holding company for Tata Group, is 63% owned by charitable trusts

Tata Group donates $200m to charity and social enterprise every year

Products in manufactured globally by Tata include: cars, lenses for glasses, watches, tea, coffee, steel, chemicals, precision engineered component, factory automation solutions

Tata and Britain

A discreet brand, reflecting the humility which characterises its leadership, Tata has nonetheless grown to be a huge economic force in the UK with 19 of its 100+ global companies operating here including four large manufacturing companies: Jaguar Land Rover, Tata Steel Europe, Tata Global Beverages and Tata Chemicals.

Tata also supports production at a number of customer and partner plants via its consultancy services business, Tata Automation – a subsidiary of Tata Motors and the Precision Engineering Division of Titan – which works with companies like Rolls Royce and Parker Hannifin in the UK.

Furthermore, Britain is a big R&D base for Tata Motors, which recently invested £30m in a Tata Motors European Technical Centre at Warwick University which will employ 900 engineers and scientists to develop low carbon automotive technologies when it opens in 2017.

This is just the tip of the iceberg when it comes to Tata support for UK jobs. With over 50,000 employees, Tata Group is now the UK’s largest industrial employer.

Furthermore, Tata generated $23bn of its total revenues of $96.4bn in the UK in 2012 and it is Britain’s most significant foreign investor.

At the beginning of this year it committed to spending £2.75bn with its most famous UK brand Jaguar Land Rover. But it is also in the middle of an £800m investment plan for Tata Steel Europe, which has sites production sites in Port Talbot and Scunthorpe and it invests around £3m every year in upgrading production technology at its already award winning tea manufacturing site in Eaglescliffe according to Steve Eastham, operations director at the plant which makes Tetley teas – Tata Global Beverages, a $1.5bn turnover company in its own right, bought this brand in 2000.

This support for British industry, particularly some of its most competitively challenged sectors like chemicals and steel, should be lauded – rather than grumbled about as it is in some quarters which fear a loss of control over British brands will eventually mean the disappearance of UK manufacturing and the loss of jobs.

I asked Muckund Rajan, Tata’s chief ethics officer and brand custodian points what his response is to such concerns.

“If the values of a company are universal then it doesn’t matter where they come from, they will do the right thing. By the same token, it doesn’t matter who owns brands [like Jaguar Land Rover], as long as they do the right thing.

“This means putting out excellent quality products and services that people across the globe want to buy. It also means giving back to society and community by investing in skills, developing supply chain capability and working with government to optimise business and create jobs.”

These are core characteristics which can be observed in any Tata business around the world asserts Rajan – though the way in which they are expressed often varies since the company’s federal management system always weeks to give autonomy of decision making to individual company management rather than dictating from the centre.

A seasoned hero of UK manufacturing

Tata’s empowerment of British industry is nothing new. It’s not often realised that Tata has been trading in the UK since 1907 and has a legacy going back even further.

It was during a visit to Lancashire in the late 1800s that Jamshedji Tata, the Group’s founder, gained inspiration the cotton mills of the industrial revolution which led to the establishment of Empress Cotton Mills – Tata’s first business.

Since then the relationship has remained strong. The donations the Tata family, organisation and trusts have made to the root systems of UK manufacturing, through funding education, and R&D make a convincing display of long term interest in Britain’s industrial capability. “We are not a private equity style company that makes acquisitions in order to strip assets. We are all about the long term.”

Heritage path

Many companies will make this claim, but when you look at Tata’s leadership history there’s a stability and commitment to purpose which endorses the claim.

In its 100 year+ history it has had just six chairmen and one of those – the legendary RJD Tata who founded Tata Motors – occupied the position for a full 53 years.

Each leader has had a distinct impact on Tata, upholding the Group’s core values in their own way over extended periods.

Manufacturing watch parts to 1 micron tolerances at Titan led to the creation of Tata's Precision Engineering business in 2007. It now employs 600 people and generates $40m a year in revenues

Tata is fiercely proud of its heritage and, particularly in India, holds the sect dynasty of chairmen in almost reverential esteem.  Jamshedji, JRD and Ratan Tata, who led the company until the end of last year, are the names most frequently invoked to express the drive behind Tata’s commitment to social enterprise, innovation and value creation.

It’s celebration of heritage which has spurred my visit to the company HQ – an unassuming building in the heart of Mumbai’s frenetic haze of vehicle emissions and nerve shattering horn-blowing – and a range of factories including the Tata Motors plant in Pune and the Tata Global Beverages facility near Bangalore.

For in February 2014, on Founders Day, the company will commemorate 175 years since the birth of Jamshti Tata and start a year of celebration across the global company to recognise its continuation of his legacy.

Over the year, TM will follow how Tata approaches this celebration in the UK and monitor the extent to which British employees embrace it.

Coming soon: reports on Jane Gray’s visit to Tata Motors and Titan where she uncovers a challenge to UK SME precision engineering.