History of the Tatas, from Ratan Tata himself

Uday Kapoor: On behalf of the Computer History Museum in Mountain View, California, it is my privilege to welcome Mr. Ratan Tata for a conversation. My name is Uday Kapoor and I am a volunteer in the Oral Histories Program in the Museum, the world’s leading institution in preserving and presenting the history of computing, semiconductor technology, entrepreneurship and more recently software. Mr. Ratan Tata was the Chairman of Tata Sons, the holding company of the Tata Group from 1991 till his retirement on December 28th 2012, his 75th birthday, when he was conferred the honorary title of Chairman Emeritus of Tata Sons, Tata Industries, Tata Motors, Tata Steel and Tata Chemicals. During his tenure the group’s revenues grew manifold totaling over $100 billion in 2011 to 2012. He has recently returned to his leadership role as Chairman of Tata Sons, temporarily. Mr. Tata serves on the Board of Directors of Alcoa and is also on the International Advisory Boards of Mitsubishi Corporation, J. P. Morgan Chase, Rolls Royce and the Monetary Authority of Singapore. He is the Chairman of the Sir Ratan Tata Trust and Sir Dorabji Tata Trust, two of the largest private sector promoted philanthropic trusts in India. He’s the Chairman of the Council of Management of Tata Institute of Fundamental Research. He also serves on the Board of Trustees of Cornell University and the University of Southern California. The Government of India honored Mr. Tata with it’s second highest civilian award, the Padma Vibhushan, in 2008. He has been appointed Honorary Knight Grand Cross of the Most Excellent Order of the British Empire, Commander of the Legion honored by the Government of France and Rockefeller Foundation has conferred him with a Lifetime Achievement Award. Among his other achievements, Mr. Tata is also an Honorary Fellow of the Institute of Mechanical Engineers, The Royal Academy of Engineering and the Foreign Associate of National Academy of Engineering. He has received Honorary Doctorates from numerous universities in India and abroad. So with that we will start with Mr. Tata’s early life. He was born in in 1937.

Ratan Tata: I was born in Bombay.

Kapoor: Oh you were born in Bombay!

Tata: My father was born in Surat

Kapoor: I see, thank you. So I stand corrected.

Tata: Okay

Kapoor: So at this stage I would like you to say a few words about your early life.

Tata: Okay

Kapoor: And we can take it from there.

Tata: Okay. As you just indicated I was born in Bombay and lived my early life in Bombay. When I was seven my father and mother separated, which was not so common in those days and both my brother and I were brought up by my grandmother who played a very significant role in my early life. I continued to go to school in Bombay and when I graduated from High School I went to the US and I was in the US for about ten years. I went to Cornell where I graduated as an Architect and then moved to Los Angeles because I never got used to the cold weather. So moved to Los Angeles and worked there in an Architect’s office for about three years and then came back to India because my grandmother was ill and that changed my whole life.

Kapoor: So I was going to come back to that, your history, starting from the college, we can come back to that

Tata: Yeah

Kapoor: But I wanted to spend a little more time on your childhood.

Tata: Okay

Kapoor: As you mentioned you were raised by your grandmother, what was your childhood like? Were there any mentors and special teachers that you remember?

Tata: As I mentioned my grandmother was probably the most influential force that existed at that time. We lived in a big house which my grandfather built, but never lived to see it finished. He had a hobby of collecting art. The house was meant to be his private museum but he didn’t finish it. Most of his collections are in the Prince of Wales Museum, in Bombay. My grandmother was a very interesting person, Lady Ratan Tata. She was a very disciplined person, very intent on making sure that she lived her life with dignity and she made my brother and me follow the same stringent codes, if you might. We were often ashamed of some of the trappings that we had as the two sons of a very affluent family and I remember for example when going to school in Bombay my grandmother used to have a huge Rolls Royce which was quite old at that time and it was would embarrass my brother and me to be seen in that, so we’d walk home and the car would follow us, because it was so ostentatious. So we had many issues like that in our early days. They were very happy days because she was very understanding and yet very demanding. So we lived a life of luxury, we went spent three or four months in the UK with her. She and her husband had a huge estate in Twickenham, outside London which I have promised the County Council which now owns the place, to go and visit but have not as yet done so. So to sum up it was a very nice and reminiscent of good times, childhood that we had and she was probably the most significant force at that time.

Kapoor: It is such a fantastic legacy with Tata’s, were you exposed to the values of the Tata’s in your early life?

Tata: I can’t answer that consciously but I’m sure we were exposed to it because they, my father, my grandmother and everybody lived by those standards. But it was not consciously imposed on us. The legacy of being fair to all, tremendously strong legacy, equality among, we were never a family who shouted at our servants or treated them like dirt or, and there was a great deal of equity in terms of how we treated them and most of the people that worked for my grandmother and my father served them for forty years or fifty years as the case might be. So I would imagine the underlying thing was never to do anything that would bring shame to the family.

Kapoor: So when were you exposed to for example the life of Jamsetji Tata? Do you remember when you learnt about his contributions and his legacy?

Tata: My grandmother would have been the only person at the time when we were young who had met and lived in the presence Jamsetji because Sir Ratan was his younger son. So she, in her early days of marriage, they lived in Esplanade House, which is Jamsetji’s home and she used to talk of Jamsetji at some length but somewhat superficially. The only thing I remember was that she said you couldn’t take your eyes away from his eyes that was, she kept on saying that, that he had you know penetrating eyes. Apart from that she didn’t talk very much, I suppose in those days a young bride was a young bride and not much interface.

Kapoor: So in terms of, so that’s a good segue into the legacy of the Tata’s. I have read a lot about Jamsetji and of course throughout my life history I’ve been aware of Jamsetji and as you said his visage which is so impressive and he’s considered the founder, of course of the whole Tata vision and the whole industry, but also intertwined with the industrialization of India.

Tata: Yes

Kapoor: Because of the way that he saw tomorrow and the way he set up the industries; so wanted to talk to you about that a little bit. He was born in Navsari in 1839, in Southern Gujarat to a family of Parsi priests and he moved to Bombay at the age 13. And can you tell me a little bit about your perspective on his contributions?

Tata: Well from what I am able to gather and just a little aside I lived six years in Jamshedpur, which is very much Jamsetji’s major creation, Tata Steel. So much of what I am about to say I would have picked up in my six years at Jamshedpur, apart from my own guess of what Jametji was like, to me he seemed to be a person of extraordinary vision and a great nationalistic spirit. He was able to foresee independent India, which it was not at that time, but manufacture of goods and services, more fundamental goods and services, basic goods and services. And if it existed on imports, he set himself the task of why could it not be done by us; so the first industry he established was Textiles, in Nagpur where I’m told the British talked of Lancashire having the ideal climatic conditions to spin cotton into yarn. So he picked Nagpur because it had the same moisture content as Lancashire did. So there was you know an element of analysis and an element of purpose and in this he added India’s first atomized moisture in the plant.

There were sprays that provided the correct moisture content and he produced the first textile mill and it was also the first company to have public share holdings. He did this, but it didn’t fulfill his quest for establishing industry. I think the next one he did was either steel or hotels. In the case of steel, I think that’s very well documented. He produced a steel plant which the British thought could never be done and he did it. He picked, I believe he went on horseback and elephant to find the confluence of iron ore,

coal, and water and built the plant in Jamshedpur.

Kapoor: Yes, he did a lot of study in US and in Britain.

Tata: Yeah he did.

Kapoor: And amazing amount of research

Tata: He went to the US to pick a consultant who would come and run the plant. The plant was Indian;the thinking was Indian but he didn’t produce a second class plant. He produced a world class plant in those days

Kapoor: Best equipment, yes

Tata: And he had the foresight to buy about 25 square miles of land which became the city of Jamshedpur.

Kapoor: Sakchi was the name of the city before.

Tata: That’s right. Then in terms of power, he foresaw that the hills around Bombay would provide a head of water for hydel project. So the next one or next early one was Tata Electric Company which had the hydel power at a time when no other similar power existed. The hotels as you may know was a funny story of his, he was the largest land owner in Bombay till the British put a ban on his owning any more land. Amongst his landholding, he owned the Royal Bombay Yacht Club and he was taken for lunch there by one of his British friends but was not allowed entry into the place because he was not fair skinned. He was incensed by that because he owned the building. So he decided that he would build a hotel that was open to everyone, which is how the Taj came to be. And all these industries are not the normal consumer industries or manufacturing industries, they’re the backbone of a country, steel, textile, power and accommodation.

Kapoor: So in terms of his thinking when he visited England and he studied liberal thinkers, Ruskin or people like those. So he developed his thinking for enlightened capitalism and constructive philanthropy, based on his liberal upbringing or thinking in England. Is that true?

Tata: I guess it was. I don’t know except he was just like I mentioned a great person who believed in the equity and fair dealing with your fellowmen. He intuitively trusted people; he respected merit, tremendous respect for merit, not family or unions of other sort. He respected a capable person when he saw him and allowed him to operate there. Many stories about him traveling on trains and seeing somebody or talking to somebody that he felt had merit and inviting him to come and work for him. So I guess if he had lived on we would have had more basic industries. But his two sons finished those projects for him. He never got to see them complete it.

Kapoor: Exactly; so one aspect that I read about was his love for education

Tata: For?

Kapoor: Love for education and also making sure that the nation is built based on education and scientific research and scientific studies. And that is also one of the bases for his dream for advanced scientific institution like Indian Institute of Science in Bangalore, which he did not complete but as you mentioned his sons completed.

Tata: Yes another example of a nation building a foundation in scientific education, the Indian Institute of Science, at a time when India never really dreamed of being a part of the scientific world, was again as far sighted in his visionary as you could be in those days.

Kapoor: So of course going forward on the Indian Institute of Science, it has been such a place where the distinguished names that have been associated with it, Sir Visvesvaraya, Noble Laureate Dr. C. V. Raman, Dr. Homi Bhabha, Dr. Vikram Sarabhai and Dr. Satish Dhawan, this is of course going forward but it made the basis for education and creating people like that.

Tata: Yes

Kapoor: So it’s really amazing, and again this goes back to the linkage of nation building and how India’s industrialization and he was also a true nationalist in that he cared about the future enough that it is said that he had attended the first meeting of the Indian National Congress with Dadabhai Navroji, who was a friend of his; so lot of nation, feeling for the nation as a whole, future nation.

Tata: Yes between him and Sir Ratan Tata there was a lot of early support, financial support and otherwise of Mahatma Gandhi and some of the early stalwarts.

Kapoor: Mr. Gokhale

Tata: Gokhale and great support for an independent India, not openly so but nevertheless the home in which we were brought up, with had lot of pictures of Mahatma Gandhi, who stayed at their London house for some time etc.

Kapoor: Of course you know he suddenly passed away in 1904 at Bad Nauheim in Germany and what Jawaharlal Nehru once wrote about him, said that ‘when you have to give the lead in action, in ideas, a lead which does not fit in with the very climate of opinion, that is true courage and that, it is the type of courage and vision that Jamsetji Tata showed.’ That shows the giant of a man.

Tata: Yes you know the softer option is never to do these things because they all came from the UK. So why do it? And he had this nationalist spirit that we could do it and we must do it and much later many, over a hundred years later, we became exporters to the UK. So you know he in a manner of speaking was way ahead of his time.

Kapoor: Yes exactly. So after Jamsetji, Dorabji became Chairman of Tata Sons and worked hard to fulfill the great plans of his father, as you mentioned and three months before Sir Dorabji’s death in 1932, he created two trusts — Sir Dorabji Tata Trust and the Lady Tata Memorial Trust, who passed away before him.

Tata: Yes

Kapoor: And he bequeathed all his wealth to his trust which enabled India with these premier institutions like the Tata Institute of Social Sciences, Tata Memorial Hospital for cancer, the Tata Institute of Fundamental Research and the National Center for the Performing Arts. These are premier institutions for the country.

Tata: Yeah, that is true.

Kapoor: After Sir Dorabji, Sir Nowroji Saklatwala became Chairman and he actually did some financial consolidation of several Tata Companies enabling future growth of the group. This is what I read.

Tata: Yeah

Kapoor: And he passed away in 1938 and then JRD succeeded him as the fourth Chairman. So we can spend some time on JRD

Tata: Okay

Kapoor: Another giant of a man. Jamsetji’s cousin Mr. R. D. Tata, Director of Tata and Sons, had moved to Paris and set up business there. He married Suzanne Briere, a French lady and their elder son J. R. D was born in 1904 and he grew up and was educated in France. So and then of course there’s a lot of thing that we can talk about but tell me about your perspective on what you know about J. R. D’s early life.

Tata: Well if I go back to my earliest recollections of Jeh, Jeh, is as we all loved him and called him, my earliest exposure to him was relatively unfriendly.

Kapoor: Ah I see!

Tata: I mentioned I was in college in the States and often we used to run into each other when he visited the Tata offices in New York City. And he was very I would say not even cool, he was very cold and you felt you were interfering in his busy schedule and he let you know that that was the case. So it was more How are you? What you’re doing? He’d ask the same question each time. How long have you been here? Why did you come to the US? Just very perfunctory sort of conversation; it was in Jamshedpur, during the six years that I was there that we started to get to know each other when he came. We shared a common passion, we both were pilots. And I would say the fact that we both had a love for flying and aviation that just transformed somebody who was here into somebody very close to him. He asked me to start a Flying Club in Jamshedpur. And that was my first exposure to an entrepreneurial exercise of raising money, of going to Hindustan Aeronautics to buy the first plane, getting government accreditation to operate a Flying Club and then telling him it’s done. We became closer and closer and one day he appointed me as the Chairman of Tata Industries and a few years later a Director of Tata Sons.

Kapoor: So we will come back to that

Tata: Okay

Kapoor: In terms of his life in France for example I read that as a boy with a friend he watched the first historic flight across the English Channel. That’s the love of aviation as you mentioned. And he was hooked and so in the time of 1926 he was on the verge of going to Cambridge but his father passed away and he returned to India at the age of 22 and succeeded his father as the Director of Tata and Sons. And in 1929 he joined the Bombay Flying Club and became the first person to be granted a pilot’s license in India. And 1930 he competed for the Aga Khan Trophy for flying solo between England and India.

Tata: Sorry what?

Kapoor: So talking about his love of aviation, of course that showed up in his starting the Tata Flying Institutions like later on here and his love for flying as you said. So you mentioned that you also have love for flying. Was it through J. R. D. or was it ….

Tata: No, it’s purely independent

Kapoor: I see

Tata: And it just became a common bond between us two.

Kapoor: So did you also learn flying in Bombay?

Tata: Yes I learnt flying in Bombay but was too young to solo. I was fourteen years old and I had to stop. Then when I went to Cornell I started flying again. The legal age to get a license was seventeen and on my seventeenth birthday I went solo and I’ve been flying ever since.

Kapoor: So in 1938 Sir Nowroji suddenly passed away and all other Directors senior to him elected J. R. D at the age of 34 as the Chairman of Tata Sons, making him head of the largest Indian group at that time. And of course that was unusual you know in those days for a young person, but then of course he stamped his style of working on the organization by democratizing the working of Tata’s, by changing the common Chairmanship model, for example. And at that time as you mentioned, in 1945 a wholly owned subsidiary of Tata Sons called Tata Industries was set up. He later on made you Chairman but this was set up in 1945, is what I read. And this was set up to increase professionalism in the management of the company. Also, Articles of Association of the leading Tata Companies were amended to make social responsibility, beyond the welfare of employees, part of their objectives. And that was again his emphasis in TISCO in Jamshedpur to make sure that you take care of not only your employees but also the town or the city.

Tata: Yeah, I’ll just add something there

Kapoor: Yes

Tata: If one were to go around Jamshedpur you would understand the significance of what J. R. D did. You had this island of wealth, I say wealth because the workers had wealth; they had company housing, they lived a much better life than the villagers around the plant and by being sensitive to the upbringing of those villagers by giving them education, by giving them medical assistance, by creating industries for example, stitching uniforms for the factory, lunches you know making food, giving the women a livelihood. He created a situation where Jamshedpur as against some other industry towns has no rancor between the villagers and the wealthy workers of the industry, but a oneness which is quite noticeable in Bihar or Jharkhand today, different to what is in Bihar or Jharkhand today, and built on cooperation and coexistence which came from look and was the start to CSR- Social Responsibility by industry to try and find water, to try and increase crops and such, so the island spread in terms of it and it’s very significant and not so easily determinable in print if you might, unless you go there.

Kapoor: Right, actually it so happens I was born in Bihar, I was born in Jharia

Tata: Oh I see!

Kapoor: And my father worked for Indian Iron & Steel Company

Tata: Okay

Kapoor: So I grew up in a household which was again an island, it was a British built

Tata: Sir Biren Mookerjee

Kapoor: Yeah right so father knew him but the thing that you mentioned the disparity between affluence and the villagers, you know I saw that as a child, so very much so.

Tata: Did you live in Burnpur then or?

Kapoor: No, we were in Jitpur that was the name of the colliery

Tata: I see.

Kapoor: And we, because there were no good schools, my brother and sister lived in Amritsar with my grandparents. We had a reverse commute, we would go to Jitpur during the summer vacations and so there are many stories I could talk of, but I very much appreciate Jamshedpur. I’ve met many people, there’s a gentleman that I know in the Bay Area whose dad actually was one of the foremen in Jamshedpur when you were doing your, you worked in the beginning after Cornell, you worked for him.

Tata: Yeah I was on the shop floor for about three years.

Kapoor: His name was Arun Bose

Tata: Who?

Kapoor: Arun Bose was his name, that you may not recall and his son’s name is Ajoy Bose, who did, he was at Bell Labs and he’s talked to you because Arun Bose told you that please talk to my son, he wants to go abroad and you advised him.

Tata: I see.

Kapoor: So this was of course many years ago. So in 1970 the government imposed MRTP- the Monopolies Restrictive Trade Practices Act, mandating the group to enforce a loose federal type of management of the company and Tata Sons Industries Directors in charge of various companies were withdrawn and the autonomous Boards ruled the company. This really changed the nature of Tata operations and it was purely J. R. D’s talent, energy, charisma and vision that drove the company to achieve great results, in spite of the autonomous nature of the structure because of course it created people that became powerful bosses of individual companies. But it was J. R. D’s talent that kept it together. Would you believe or would you.

Tata: Yeah, oh yes I do, I credit him with creating the group that became the nucleus of a bigger group later, had he not done that it would have disintegrated into discrete companies. We owned very little of those companies. I think when I took over we had about 4 or 8% ownership in Tata Steel and our ownership on each of the major companies was very small and it was J. R. D’s persona and the confidence the shareholders had in him that created at that time a virtual group but not a group because we had no major shareholding or legal binding on us and one had to make those changes after J. R. D. because one didn’t have his charisma and have a chance to do it on the basis of non-ownership.

Kapoor: Yes, yes, so and his achievements were remarkable given the Tata Group operated into wage and price control, high import duties, ban on imports and capital controls. He was able to prevent the nationalization of TISCO for example; so quite a remarkable achievement. When he took over Tata Group had fourteen companies with sales of 280 crores and when he stepped down sales had increased 30X and there were 50 large manufacturing companies, not counting innumerable holding investments, subsidiaries and associate concerns, making it India’s biggest business group. So his achievements are just amazing, especially going through the partition and all these controls, to do that.

Tata: Actually his contribution is really remarkable because, because of MRTP we never received a license to enter new business or to grow in a business. And despite that we grew to some extent and most importantly we grew without succumbing to corruption or to bribery to payouts; none of those, none of those props were our content or our DNA. So he set new moral standards for India, set new for us to follow and we’ve been doing our best to follow them continuously since then.

Kapoor: Yes I know that the Indian Government, I mean Jawaharlal Nehru respected him and of course he was conferred the highest civilian award, the Bharat Ratna, so he more than deserved it. I mean what a figure! And as an internationalist, J. R. D became widely known and admired outside India. He was of course a true internationalist as he was the Chairman of Air India, which led to his serving a term as Chairman of the IATA-International Air Transport Authority. He served as a Consultant to the Nobel

Foundation in Sweden along with Nobel Laureate Dr Linus Pauling. And of course as during the dusk of his career some of those structures in the companies started to impinge on the performance of the company or of the Tata Group as a whole and at some point it seemed like there was a possibility that the Tata Group may dissolve into separate companies. Is there something you’d like to comment on that?

Tata: No that, that phenomena has reemerged many times when you have CEOs of those companies who suddenly feel that they could move out and become a bigger fish in a pond and when I got involved J was already a more elderly person and given to looking at soft options more often than he did when he was younger, which is natural, aging phenomena. And he would allow this to take place and he and I would disagree on whether that should be, whether let’s say a Tata Chemicals or Tata Power should be its own company and not be governed by Tata Sons. So it has happened through the years. Russi Mody of Tata Steel tried to take it away from Central control and when J realized that he brought everything back into focus. But that phenomenon has happened on more than one occasion.

Kapoor: But MRTP also restricted his options, is that true?

Tata: Well MRTP actually you had, if you had considered it to be MRTP Company you couldn’t grow without the permission of the government, you couldn’t, you were restricted in what you did; so the aim was to stay out of MRTP and that was one of the phenomenons that was in favor of carving companies out because they ceased to be MRTP companies and were feared to grow etc. That was the rationale many a times for taking it away.

Kapoor: Right so in any case so in 1991 when he decided to step down and proposed that you become Chairman of Tata Sons and we’ll come back to that a little bit more and so now I think unless you have some comments

Tata: No

To be continued…

(This interview from January 2017 has been reproduced with permission)

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