The announcement that Carl-Peter Forster has taken a senior job at Tata Motors (TM) isn’t exactly surprising. It was rumoured to be on the cards last year after he had left GM in the immediate GM/Opel/Magna fallout. Ratan Tata is clearly looking for someone with the relevant experience and ability to take TM to the next level – essentially a major presence on the international stage. He has got his man.
Forster is in many ways the ideal candidate. He knows the European automotive market and industry intimately. He also comes with knowledge of how a big car company like General Motors, with diverse operations and an international footprint, actually works.
He also knows a bit about cost management from his ‘Project Olympia’ GM Europe experience. And he ought to be able to offer some insights on industrial relations (which might be particularly helpful to JLR).
Forster comes with a Rolodex full of contacts and a level of strategic know-how that is informed by his high-level industry experience. He is much respected in the industry, especially in Europe. Home grown managers are great, but sometimes the mix at the highest level benefits from a fresh perspective.
The big project is taking Tata Motors to a new level. Forster will have to have a vision that chimes with what Ratan Tata wants and – crucially – a plan on how to realise that vision in the long-term. Many of the building blocks are already in place: Tata Motors is a considerable industrial force based in one of the world’s high-growth emerging markets that also boasts low manufacturing costs. Tata Motors is no one-trick pony – it makes cars and trucks and is part of a conglomerate which can also bring further, less obvious, benefits to bear.
I wouldn’t mind betting that one of the first things Forster will want to do is review the whole Tata Nano project, top to bottom. It has not been an unqualified success so far and he will want to get to the bottom of where the problems have been, what has worked well and what hasn’t. And then there’s the small matter of turning a car like the Indica into something that would work in overseas markets. The trucks? They may be a nice little earner in India, but is there more potential for overseas sales?
Jaguar Land Rover is probably something he will want to take some time over. Sales have looked better recently and there is already a plan in place to consolidate on facilities (with a plant to go after 2014) which will save on cost. Can some JLR activity or some models – old ones perhaps – be made in India? That, as Mr Forster will be well aware, is a suggestion to be handled with the utmost sensitivity. Getting JLR back in the black is the immediate priority as the business model is retuned – especially at Jaguar where the dash for volume growth under Ford ultimately failed.
Ratan Tata will want Tata Motors in 5-10 years’ time to look different from the Tata Motors of today – with a bigger spread of products (and better ones) and much more international market presence. Getting an industry heavyweight like Forster on board – and basing him in Mumbai – sends out a message to the industry that Tata is serious about growing outside of India.