In line with Tata Group Chairman Ratan Tata’s recent letter that “the current economic slowdown was the worst in living history”, Tata Motors posted its biggest loss in over a decade and its first in 28 quarters for the three months ended December 31, 2008.
To beat the blues, the company is planning cuts in compensation.
“We are considering definitive cuts in compensation of executives in the company,” said Tata Motors Managing Director Ravi Kant at a press conference. Plus, the company is planning to cut investments. “We will cut capital expenditure by Rs 700-800 crore over the next three years,” Kant said.
It was not clear if this includes the Rs 2,000 crore investment plan for the Nano plant in Sanand, Gujarat.
India’s largest auto firm also bore the brunt of the ongoing slowdown in the sector, turning in a net loss of Rs 263 crore during the quarter against a net profit of Rs 499 crore in the same period in 2007.
This is Tata Motor’s biggest loss since it ventured into car manufacturing with the Indica in 1998.
First reported by Hindustan Times on Thursday, Ratan Tata had, in a letter to his employees, warned of “hard decisions” by management teams of many companies.
With the Satyam shadow clouding all corporate results, the company, in a unique gesture, submitted and published its auditor’s report. “This is not a general practice,” said Surya Bhatia, a chartered accountant.