Acquisition of London-headquartered Corus by Tata Steel was a mistake and slicing off the take-over at the moment was a good job, former MD of the company J J Irani said today. “Acquisition of Corus was a mistake. Not an intentional one but an aspirational mistake,” Irani told at an interaction on management organised by Calcutta Chamber of Commerce here today.
Irani, who held the position of the MD of Tata Steel for nearly a decade, said that the Indian company emerged as a ‘white knight’ while acquiring Corus in 2007 when the global steel market was good. But with the subsequent slump in steel demand, Corus (later renamed as Tata Steel Europe), the acquisition turned bad and it had lived off Tata Steel’s Indian operations, Irani said.
Irani, however, said that experience of Tata Motors was different in case of JLR, which was acquired by it, was doing extremely well and was supporting the Indian firm now. “JLR is holding up the Indian company. The scenario is different for Tata Steel”, Irani said.
Irani said while he was the MD, the Tata Steel management had very cordial ties with the union in Jamshedpur for which the 78,000 strong workforce could be gradually reduced to 40,000. “That decision to shed flab at that time has helped Tata Steel now to be one of the most profitable and efficient steel companies in India”, Irani said.
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Saying that the single most important factor is credibility of the management which meant that people knew that “what you are saying will be done”. “Of course in the last few months, that thing has become blurred and it will come bank to normal once again”, he said.
Irani, who described JRD Tata as his icon and professional father, said in the earlier days, when Tata’s holding in Tata Sons was just three per cent and G D Birla with five per cent, things were amicably passed in the EGMs of various companies. But with the Tata’s holding in Tata Sons much more now, questions were being asked in some of the group companies, he said.
Regarding the spat between Ratan Tata and Cyrus Mistry, he said that the former had never interfered with the board decisions, a thing which was now being noticed in the case of Infosys. In Mistry’s case, the Tata Sons board lost confidence in Mistry for which he was removed. “But the Tata image has taken a hit as things were blown out of proportions in the media”.
Regarding Infosys, Irani said that the founding fathers like N R Narayanamurthy should let the present management to function on its own. “Interference, in my opinion, is not desirable”, he said.