Where it all began: How Ford drove into Madras

There was an air of excitement around the automobile industry in the early 90s. The country had opened up, and India was a huge untapped market stuck with the now vintage car models such as Ambassadors and Premier Padminis, which were a joke in the rest of the world back then. Suzuki, a Japanese company, had set up a joint venture with the government and introduced the Maruti 800, a small car, in 1983, which became a super hit ‘affordable, family automobile’ in a car-starved country. Nothing more happened in the next 10 years.

Then, in the early 90s, American auto major Ford announced its decision to come to India when the government started allowing joint ventures in the auto sector. Ford tied up with Maharashtra’s Mahindra & Mahindra (M&M) and Ford Mahindra was set up. The international manufacturer announced its decision to put up a plant to manufacture locally, and that’s when the fun began. Business journalists began to learn how difficult it was to deal with a large American multinational which followed strict procedures and processes regarding media relations. Its communication policy was rigid. Nobody spoke unless the company allowed them to. Information came in trickles.

Given the tie-up, it was assumed that Ford would put up their factory in Maharashtra, but the company didn’t work like that. After researching for months and sending team after team to India, the company shortlisted three probable locations: Pune, Gurgaon and Madras. Madras was the last choice as the American company felt the market was in the North and West.

Madras, however, was suitable in several ways. It had a strong auto component industry, a trained workforce, engineers, and a port. The city already had commercial vehicles, two-wheeler and tractor companies, among others, and a strong ecosystem was in place. Although the industry knew Madras was a good choice, the rest of the country could not believe sleepy Madras stood a chance.

The city did not have an industry-friendly image. Tamil Nadu was seen as a corrupt state, and this was far from the truth. All the Dravidian party leaders made considerable contributions towards the State’s growth.

J Jayalalithaa was the chief minister when Ford made its entry. But, it was not easy to meet her. Nor did she have favourites among industrialists or industry groups. As always, one never knew what was going on in her mind. She never gave interviews, and had a healthy contempt for journalists. Ford zeroed in on Madras and Pune. Both states went all out to woo Ford. Which city would Ford choose? Events began to move at the speed of a business thriller.

Jayalalithaa understood that getting Ford to come to Madras was not only prestigious, but would also create jobs, and downstream industries. She impressed the various teams which trooped in from Dearborn, Michigan (Ford’s headquarters) to her office in Madras, having facts and figures at her fingertips. She was punctual, spoke fluent English, and served refreshments in the best bone China available. Poor Manohar Joshi, Maharashtra’s CM, was no match for her.

It was not just her charm and knowledge which impressed Ford — Tamil Nadu really got its act together. The bureaucracy spectacularly rose to the occasion, and put together a highly-professional multimedia presentation, which left a very favourable impression. Ford sent a 200-query questionnaire covering every aspect of Madras imaginable. The site chosen had to pass 40 parameters — for example, they did not want any other industry within 20 kilometers of their factory (as it would lead to dust pollution at their ultra-modern paint shop).

The entire exercise was a rare instance of the bureaucracy and the private sector coming together. For instance, C Ramachandran, the then Industries secretary, got Suresh Krishna of the TVS Group to talk to his old friend and M&M chairman Keshub Mahindra to persuade Ford to come to Madras. The industry was working in sync with the government. There were tough negotiations for a year, but the Tamil Nadu Government worked everything out and Ford came to Madras. The factory was set up in 1995.

Ford brought many learnings to the state. Tamil Nadu learnt to draft policies to bring in similar mega projects. In addition, the automaker introduced many changes in practices: women started to work on the shop floor, youngsters were hired from nearby villages, picked up by company vehicles, trained and encouraged to study further.

When the MOU was signed there was a celebratory dinner, and I was one of the privileged few to get an invitation. I asked John Parker, the managing director of Ford Mahindra what he thought of the newcomer Hyundai, the South Korean auto manufacturer, who was also coming to the city sans the fanfare. He looked amused. “You guys may get along better with them,” he said.

Parker did not know how prescient he was.

The writer is a journalist and author.

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Printable version | Oct 17, 2021 2:51:45 PM |

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