May have gone too far, too fast on Corus, JLR: Tata
“If one had known there was going to be a meltdown then yes [Tata went too far] but nobody knew,” Tata said in an interview to Sunday Times of London. He was referring to his prized acquisitions Corus and Jaguar and Land Rover, reports HT Correspondent.autos Updated: May 11, 2009 02:00 IST
Ford says Tata to Jaguar — ran a headline in a British daily the day after Ratan Tata announced he was acquiring the company that makes the iconic Jaguar and Land Rover. A year later, Tata admitted he might have gone too far too fast.
“If one had known there was going to be a meltdown then yes [Tata went too far] but nobody knew,” Tata said in an interview to Sunday Times of London. He was referring to his prized acquisitions Corus and Jaguar and Land Rover (JLR).
“Both the acquisitions were made, I would say, at an inopportune time in the sense that they were near the top of the market in terms of price.” Tata Steel paid $ 12.1 billion for Corus (acquired in 2006) and Tata Motors paid $ 2.3 billion for JLR (2008).
These acquisitions and Tata Tetley make Tata the largest inward investor in Britain. Corus and JLR together employ around 40,000 people.
Both companies have been hit by the ongoing slowdown. He hinted that there was not much cash available for both Corus and JLR. Tata thinks the former will be fine, helped by a slump in raw-material prices, but JLR may be more problematic.
Tata wants the British government to help. " I would like to see the British Government playing only one role. It controls the banks, and all I seek is the facilitation to provide access to credit on commercial terms. It's not a bail-out."
He reminded that, "We are responsible for the fortunes of the company, but this is a bone-dry situation in terms of access to credit... Nobody can operate on that basis unless you have large cash balances which we don't."
Sunday Times said Corus has shut facilities in Britain and laid off 5,000 workers. Jaguar sold 21 per cent less in April in UK than the same month in 2008. Land Rover was down by 47 per cent.
JLR wants loan guarantees from the government and the Times said it is “understood to have refused an offer from officials, rejecting conditions that would have given the government a degree of management control”. Tata was critical of the government saying it “does not appear to care” about the manufacturing sector and that it risked “losing the wealth of the nation”.