Move will facilitate ambition to become a truly global firm, says Ratan Tata
Tata Motors, India’s biggest automobile company, today took a significant step to become what Chairman Ratan Tata said was to be “a truly international company”.
Forster will report to the company’s board and will be in charge of the domestic as well as global operations — the role Ravi Kant played as the company’s Managing Director before taking over as vice-chairman after he retired last year.
Prakash M Telang will continue to be the managing director of the India operations and will report to Forster. The 55-year-old Forster was most recently the head of General Motors in Europe, looking after Opel/Vauxhall, Saab and Chevrolet's Europe operations. He holds degrees in Economics from Bonn University and in aviation and space technology from Munich University of Technology.
Forster led the lengthy restructuring of troubled brands such as Opel and Vauxhall by closing plant and cutting costs. But, General Motors later reversed its decision to sell Opel after it reported improvement in business environment over the past few months — something that prompted Forster to make a public statement in November that “such a sudden shift isn’t comprehensible”. Three days later, GM confirmed that Forster would be quitting.
Tata Motors insiders said the appointment was in tune with the company’s ambition of becoming a global company and that’s where Forster’s huge international experience will come in handy.
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“The company has moved much beyond a dominant presence in the domestic commercial vehicle segment where it has over 70 per cent market share. Forster will lead Tata Motors in its renewed efforts to go global,” Tata Motors executives said.
While Jaguar and Land Rover are the latest jewels in the company’s crown, Tata Motors has many overseas subsidiaries including profit-making Tata Daewoo Commercial Vehicle Company in South Korea. This 100 per cent subsidiary is the second-largest manufacturer of heavy and medium commercial vehicles and generated Rs 2,865 crore in revenues last year.
Hispano Carrocera, a well-known Spanish bus manufacturing company, is also 100 per cent owned by Tata Motors. The company, which has two manufacturing units in Europe, makes city buses and coaches.
Tata Motors (Thailand) is a joint venture where Tata Motors holds nearly 88 per cent while the balance is held by Thonburi Automotive Assembly Plant Company. The JV makes and markets pick-ups in the ASEAN and Thailand market which is also the second largest pick -up market in the world. Tata Motors is also engaged with Brazil’s Marcopolo Motors through a 51:49 joint venture company Tata Marcopolo Motors to manufacture and sell buses in India.
Forster’s appointment comes just three weeks after the sudden and unspecified exit of David Smith, CEO of JLR.
Forster is likely to have his hands full since Tata Motors is facing stiff resistance from the JLR unions. Fresh talks between the management and the union bosses were stalled after the firm said that it can no longer guarantee 8,000 jobs till 2015.
Tata Motors is also working towards closing one of the JLR plants by 2015 in an attempt to streamline operations and become cost competitive. The company is also looking to off-load some of its older workers and replace them with young as well as cost effective employees.
Before joining General Motors in 2001, Forster has had 13 years of experience in BMW where he held various positions including that of managing director of BMW South Africa and was also on the managing board of BMW responsible for manufacturing.