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My successor may be from outside India: Ratan Tata

Ratan Tata
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Tells Journal formal search has begun.

The 71-year-old chairman of Tata Group, which makes nearly everything from salt to steel to luxury cars, told the US daily Wall Street Journal in an interview that his successor could be an expatriate. Tata's tenure ends in 2012.

"We are in the process of formalising a successor to me. We have some outside consultants and a formal search process is on. There are no constraints," Tata, who has steered the group for nearly two decades, said in the interview.

"It would certainly be easier if that candidate were an Indian national. But now that 65 per cent of our revenues come from overseas, there could also be an expatriate sitting in that position with justification, now that we are a company that has global reach and global presence," Tata said to a question on how he was conducting the search for his successor.

All but one of the group's past chairmans have been Tatas (see table), although at the moment no family candidate has been publicly identified to take over the role.
 

THE FAMILY WAY 
(Tata chairmen down the ages)
Jamsetji Nusserwanji Tata 1868-1904
Sir Dorab Tata 1904-1934
Nowroji Saklatwala 1934-1938
J R D Tata 1938-1991
Ratan Tata  1991 - ??*
* Term as chairman ends in 2012

One of the contenders from within the family is Noel, son of Simone (the founder of Lakme and Trent) and Naval Tata. is credited with building Trent into a profitable retail player with the Westside apparel chain and Star Bazaar hypermarkets.

At 53, Noel Tata is now one of the more senior CEOs in the Group. He is married to the daughter of reclusive billionaire (who owns 18 per cent in Tata Sons).

In 2006, group holding company Tata Sons decided to raise the retirement age of non-executive directors from 70 to 75.

"The successor, I would hope, would have integrity and our value systems in the forefront and... Carry on the path that we have tried to set for the company's growth," he said on when a decision is expected.

Tata hoped that "there would not be a major disagreement in the way that we have operated... In terms of who that successor might be, it could be he or she, it could be an internal or an external candidate."

In an interview to a weekly magazine early last year, Tata had said that his successor would need up to 18 months as handover time.

Tata Group's 98 operating companies have annual revenues of $71 billion and 357,000 employees, its website shows.

The group, founded in 1868, runs India’s top vehicle maker (Tata Motors), top software services company (TCS), top private sector power producer (Tata Power) and the world’s eighth-largest steel maker by output (Tata Steel).

has led the group’s international expansion. In 2007, Tata Steel paid $13 billion to buy Anglo-Dutch steel maker Corus, and Tata Motors paid $2.3 billion to acquire Jaguar Land Rover in 2008.

He said the group was still digesting those acquisitions, which had been made harder due to the global financial crisis and economic downturn. The downturn pushed Tata to ask his group companies to undertake a major cost-cutting drive.

“Tata Motors was able to extinguish its borrowing of $3 billion through this difficult period, and most people don’t realise the magnitude of that task,” he said.

Tata said the conglomerate model would continue to work reasonably well in India despite falling apart in other parts of the world, saying when the group had tried to shed some business, it ran into strong objections from employees and the public.

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