An interesting article on Tata at the Business Times Online
Tata have grown massively in the last couple of years, including a couple of high profile acquisitions in Europe with Corus and Jaguar Landrover.The ferocity of the worldwide downturn in business has clearly hit them hard.
Few companies in India have been more rattled by the global financial crisis than Tata. Building a conglomerate stretching from IT to tea, it has acquired companies far and wide, its biggest deals adding three British icons: Corus (the former British Steel), Land Rover and Jaguar.
This month Ratan Tata, the chief executive, slammed on the brakes. In an e-mail to his 98 companies, he commanded each to tighten its belt and ditch acquisition plans. “Failure to manage this crisis could result in irretrievable positions,” he said.
The sense of panic is palpable. For years, the jewel in Tata’s crown has been Tata Consultancy Services (TCS), the IT outsourcer. This summer, TCS’s net earnings growth collapsed – to 2 per cent, from 55 per cent a year earlier – after a massive dollar hedging position went wrong. Last week, clouds gathered over one of TCS’s biggest clients – Citigroup.
Tata Motors, India’s biggest lorry maker, has seen sales plummet. Tata Steel has been hit by a slump in steel. This month it sold a 26 per cent stake in Tata Teleservices, a telecoms business that is arguably its most attractive asset, to NTT DoCoMo, of Japan, for $2.7 billion (£1.8 billion).
In the UK, Jaguar Landrover are on short time working as car sales plummet, and Corus have announced lengthy steel plant closures after the Christmas holiday, following recent cutbacks in their distribution sector.
Read the full article here