There are many examples of people who have been synonymous with the companies they founded: The legend of one feeding off the other and both growing or shrinking together. But there are few instances of a professional manager’s life being aligned so closely with his employer as R C Bhargava’s with Maruti. Interestingly, Bhargava was a much-admired, but unlikely manager, just as Maruti was an unlikely success story. There were several junctures at which both the man as well as the company had to face existential questions and their decisions influenced the course of history.
One such was sometime in 1983, when Bhargava had to decide whether he should go back to the elite Indian Administrative Service (IAS), which he had joined in 1956 but had been away from for over four years. He had spent two years on deputation with state-owned Bharat Heavy Electricals Ltd (Bhel), and moved to Maruti Udyog Ltd in the summer of 1981 as its third employee after V Krishnamurthy, the first managing director and vice-chairman, and D S Gupta. All three were together at Bhel.
Two things kept Bhargava back in Maruti. First, he would have retired from the IAS in a short few years with a princely pension of Rs 3,500 or so. Already, his children’s education was being supported by his wife’s income. Secondly, Maruti Udyog was the pet project of Prime Minister Indira Gandhi, as it was taking forward her late son Sanjay’s dream project. If the exit of one of the company’s founders displeased her, Bhargava’s career prospects could have been undermined. He stayed on to become Maruti’s managing director in 1985, and assumed the charge of the chairman as well five years later. He retired in 1997, only to come back as chairman 10 years later.
Maruti started as the pet obsession of a prime minister’s pampered son. The project lost its way when Gandhi lost the general elections after the Emergency. But her return to power and Sanjay’s death appeared to have reignited the project as the prime minister became determined to make her son’s dream come true.
Many saw Maruti Udyog Ltd, which was incorporated in February 1981 and which acquired the assets of Sanjay’s Maruti Ltd, including 298 acres in Gurgaon, for less than Rs 5 crore, as a ploy by the prime minister to recover some of the money lost by her son. As it turned out, Gandhi’s family got nothing from the liquidation process as there was nothing left for the equity holders after settling priority claims.
Everyone thought Maruti was doomed to fail. The government, on the basis of the assessment by Gandhi family representative Arun Nehru, had laid down the condition that the company must sell at least 100,000 units a year. That was seen to be the viability threshold. And the company had to get its cars on the road before the end of 1983. The car market in the previous decade had been 35,000-40,000 a year. At the first board meeting, non-executive chairman S Mulgaokar, who was the chairman of Tata Motors, said the company should be making trucks and not cars. He resigned later when the company decided to go ahead and make cars.
This was already 1981 and there was not a collaborator in the negotiating room. It was anyway going to be difficult to find one because the collaborator had to bring in 40 per cent of the equity and buy 50 per cent of the production — conditions that were later softened. The government had started a search for a product and a collaborator even before Maruti Udyog was established. European car makers Renault and Volkswagen were briefly in the fray, before Renault’s car, an 1,800cc sedan, was found to be unsuitable and VW, whose chairman was about to retire and who did not want to bet on India, dropped out. The search began all over again and an accidental discovery of the fledgling car project by O Suzuki made his company the government’s partner in October 1982.
In the years to come, with Bhargava in the driver’s seat, Maruti created an automotive revolution in India. It gave the country a good, yet affordable car. By setting up a base of component suppliers, it made life easier for all the global car companies which came in once the sector was fully opened. It also influenced the way business in general was done, transporting Suzuki’s fabled cost-cutting methods to this country and creating parity between workers and executives.
This book brings the man and the company closer together as Bhargava tells the story with Seetha. However, while he dwells at length on his years in Maruti, there is only a cursory look at the years after he retired. It is thrilling to read how he staked his job to save the Maruti 800 in 1992, when Suzuki wanted to replace it with the Zen because the licence on the 800 had ended and there would be no more royalty on it. But his account of the fight between the government and Suzuki just after his retirement leaves one thirsting for more. In the end, you are left wondering how much of this is the Maruti story and how much Bhargava’s, and whether the two are distinct, after all.
(The reviewer has co-authored an as yet unpublished book whose large parts are about Maruti)
THE MARUTI STORY
R C Bhargava with Seetha
Collins Business
Rs 499
