enthuses about his new acquisition over a canteen lunch. Lunch with BS' is usually hosted by Business Standard at a restaurant of our guest's choosing. But B V R Subbu, former president of Hyundai Motors and closely associated with the Korean car major's success in India, suggested a meeting at his newly-acquired auto components factory instead. It was an opportunity too good to miss even if it meant tweaking our lunch rules a bit, writes Kanika Datta.
It had taken almost a year to meet, principally because of a contested claim to the former Daewoo property that Crosslinks Finelease, promoted by Subbu, SpiceJet's Ajay Singh and a group of private equity investors, had been awarded by the Asset Reconstruction Company (India) Ltd.
The counter-claim that was put in by a real estate buyer meant that the case was referred to the Debt Recovery Tribunal and wound on for several months before the award was upheld in November. Subbu was keen to have the issue cleared up before an on-the-record meeting. The counter-claim, he said, was no surprise, given the potential real estate value of the 205-acre factory land "" the land opposite was going for Rs 12 crore an acre.
The factory came as a surprise. For one, the Daewoo signboard is still up instead of Argentum Motors, as the new company is called. It's a practical decision, Subbu said, because the facility is still known locally as the Daewoo factory. Second, though the premise is deserted, it was far from the rust heap I'd imagined after nearly two years of non-operation following the exit of the bankrupt Daewoo. The banks and the workers "" there are about 800 on the roster "" ensured that maintenance work continued after operations stopped.
Subbu is all praise for the workers' commitment. "Their sense of belonging is unbelievable," he said. Indeed, the assembly lines that made parts for the Daewoo small car, the Matiz, and the mid-size offering, the Cielo, are all spotless with their gleaming CNC machines. Maintenance logs are tacked up on the machinery, even records of kaizen initiatives and the usual signs bearing admonitions about safety and cleanliness that can be seen in any decent factory anywhere in India. Rows of engine transmission casts and Cielo doors lie packed and stacked on the factory floor destined for exports that never took place "" they'll be sold as junk.
It was almost as though work had stopped only the day before.
Subbu is transparently happy with the facilities that Daewoo set up. "Most of it is world class "" the engine transmission plant is probably one of the most modern. Only the paint shop and some of the other sections, the part that Daewoo bought from Toyota, is not all that great," he said.
The last time I had met Subbu was soon after the launch of the quirkily designed Santro small car that almost everyone predicted would fail but actually gave the Maruti Zen a run for its money. He was as full of restless energy as he had been as a senior executive in Telco (now Tata Motors), when I'd met him in the early nineties. Starting over as an entrepreneur, little has changed. He's bulked out a bit but still displays the energy of a man half his age despite the formidable amount of work that's needed to get even a well-maintained non-operational factory up and running.
Despite a crowded agenda "" the company was looking at a Baisakhi day (April 15) opening "" Subbu was in no hurry. We chatted over a preliminary coffee in his office in an executive complex that echoed with emptiness and resembled the set of a B-grade Hindi movie with its wood panelling, maroon upholstery and marble flooring. Always talkative and informal, Subbu purveyed some gossip, a news lead ("you mean you haven't heard this?") and loads of off-the-record gen on his life in Telco and Hyundai. Hyundai is where he shaped his reputation as a marketer par excellence "" he good-naturedly parried questions about rumoured tensions that caused his exit, saying he left because his contract was up and he wanted to do other things.
But it's clearly his nearly two decades at truck major Telco, from which the parting was not entirely happy, that influences his outlook.
Subbu has retained his Hyundai loyalties with a Tuscan SUV "" "why not, it's a great car," he said when I commented on it "" into which we now climb for a factory tour ahead of lunch. The first stop is the spick-and-span 40 Mw power plant, which will soon power the factory (generators currently do that work). The plant runs on heavy fuel oil for which there are vast underground pipes "" I declined to climb down for an inspection into the claustrophobic depths.
Entering the aluminium die cast shop required a circuitous route. The entrance, Subbu explained, was being re-oriented to conform to some Vaastu laws at the request of the workers. On the way to the canteen where Subbu makes it a point to eat everyday as a way of bonding with employees, we stopped by the test track. The Tuscan (pronounced "Tooson" apparently) weathered the terrain test well, but couldn't do justice to the sloped speed track which is clearly built for smaller cars.
Subbu said the company plans to concentrate on component manufacturing, and potential customers have already inspected the plant. Reports suggested that Argentum might contract-manufacture small cars for a host of companies eyeing the Indian market. "If we look at a vehicle, it will be a truck," he said, explaining that the economics for commercial vehicles worked out better than passenger cars.
We were now at the near-empty canteen. Lunch was simple, wholesome vegetarian food "" a carrot and bean dish, potato in cumin (jeera aloo), dal, rice and roti followed by fruit. Subbu talked about his Telco days when he worked in a team under Arun Maira, now head of BCG in India, to develop a 600 cc car. "We took details from Autocar and cannibalised parts from a Honda Acty bought from ICRISAT," he reminisced. But the verdict was that it wouldn't match the Maruti 800 on aesthetics or competitive lobbying that had stymied plans for a Honda Accord launch in the mid-eighties.
Did he plan to poach colleagues from his two former companies? "There's no need to poach from anywhere, people are approaching me for jobs," he said.
Away from the manufacturing lines, I used the opportunity to ask him a bit about his life before Telco. Subbu read economics at JNU but said he did not succumb to its leftism. He's always supported the Congress and is proud of it. "I joined JNU during the Emergency but I supported the Congress even then and quite openly," he said.
The short tour had made me hungry. But Subbu ate sparingly, sticking to two rotis. I remarked on his appetite which looked embarrassingly small beside mine. "Have you seen my size," he replied.
Back at the office, it appears that Argentum (which means "silver") is just one of several related entrepreneurial ventures "" but Subbu didn't want to talk about the others just yet.
As I left, I told him how much I had enjoyed driving the Santro I'd bought seven years ago. It had delivered the most comfortable test drive of the three contestants, the other two being the Zen and the Matiz. He grinned and deflated me by saying that the Matiz was the best of them in every respect.
So I quickly asked for advice on which small car to buy next. I had the cute little Hyundai i10 in mind. "It might be worth looking at the Chevy Spark," he surprised me by saying, as I was driven off in a battered Tata Indica from the office pool.
