Have the Tatas hit a rough patch!

India’s top conglomerate Tatas, which became highly visible globally for aggressive takeovers and international expansion, seem to have hit a rough patch and are confronting problems in a number of businesses ranging from hotels to cars to steel.

Even as the group, led by charismatic Ratan Tata, was busy tackling the impact of the global slowdown and cutting costs and hunting for resources to fund their global trophies like Jaguar and Land Rover, it has now been hit by terror attack at its landmark property, the Taj hotel, in Mumbai.

While the group continues to hog the media space, for about a year now, it is mostly for the wrong reasons — be it the Nano controversy, plant closures and layoffs in the steel and auto businesses, terror attacks at the Taj hotel and Ratan Tata’s resultant criticism of the government.

This is in sharp contrast to the things till less than a year ago, when Tata was being termed as the face of India Inc in the global arena, the takeover tycoon and overall an undisputed corporate leader of the country with a presence in businesses ranging from making salt packs priced at a few rupees to luxury cars worth lakhs.

After the terror attacks in Mumbai earlier this week, Tata came out with strong criticism of the government, saying it was unfortunate that nothing has been learnt from the past strikes by the terrorists and there was still not an effective crisis infrastructure in place.

Then talking to American news channel CNN, Tata said that the terror attacks revealed deficiencies in law enforcement, especially in the areas of crisis response and management. Elaborating on his criticism, Tata said that it took three hours for firefighters to get water to the Taj after fire broke out in the oldest part of the building, there were people who died being shot through bullet-proof vests.

A few weeks ago, Ratan Tata wrote to the chiefs of all group companies, asking them to cut costs in the wake of the ongoing financial crisis. In the letter, Tata had asked them to defer non-strategic acquisitions and go slow on expansion plans, apart from cutting costs.

Moreover, the financial turmoil has taken a toll on many Tata group firms, with a number of them witnessing sharp falls in market capitalisation. Further, promoters and bankers had to chip in to salvage Tata Motors’ rights issue, which elicited a poor response from the market. The rights issue was initiated to fund loans taken for the multi-billion dollar acquisition of British iconic brands Jaguar and Land Rover.

Adding to the woes, the credit ratings of Tata Motors and Tata Steel were cut by global rating agencies like Moody’s. On slowing demand, Tata Motors shut its commercial vehicle plant at Jamshedpur for the second time this month. In addition, the company has reportedly laid off about 3,000 staff temporary staff at its Pimpri plant, primarily on account of falling sales.

Meanwhile, accolades were showered on Ratan Tata earlier this year, with an international publication describing him as one of the biggest brains in business, mainly for Tata Nano. In May, US business magazine Conde Naste Portfolio named him among the ‘73 Biggest Brains in Business’.

About Tata, the magazine said that he believes the future of the auto industry rests in the hands of people who do not yet drive. Further, US magazine Time had named Ratan Tata among the 100 most influential people in the world.

(Agencies)