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Ford workforce selected Tata Motors as its choice

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Batuk Gathani

London: Trade unions representing the 16,000 Ford workforce in the U.K. have in principle selected Tata Motors as their “preferential choice” as a buyer in the background of “fair, sustained and smooth” relationship employees have with various Tata companies.

The negotiations have been spearheaded by Naval Tata, the widely respected and acclaimed Indian industrialist.

According to analysts, Ford Motor Company’s Chief Executive Officer Alan Mulally is trying to re-structure the company’s portfolio so that executives can concentrate on revamping the brand.

Ford’s losses

The weak and recessionary economy in the U.S. has triggered a loss of $15,000 million in the last two years for the company. The firm, which is slashing production and laying off many workers, hopes for a turnaround by 2009.

Ford acquired Jaguar for $2.5 billion in 1989 and Land Rover for $2.75 billion in 2000 and has now sold both brands with manufacturing facilities for $2 billion plus, to Tatas. As a part of the deal Ford will continue to supply engines built in U.K. factories to Jaguar and Land Rover for the next five to seven years. The engines may be supplied from India within a decade but no one can confirm the specifics.

Power shifts

It is ironical that the balance of financial and technological power is now gradually shifting from the west to east. Japan blazed this trail in the early 1960s and has developed a high manufacturing profile in the West European and American auto manufacturing sectors with top selling brands like Toyota and Nissan.

The Tatas like major Japanese companies have promised job security and perhaps better working conditions for the British workforce. If the Tatas’ domestic record is any criterion the British workers feel reassured about their future under the Indian management umbrella. There is much speculation about Tata launching its $2,500 Nano “people’s car” brand in the U.K. but no details have been released.

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