‘Innometer’ ticks away as Tatas foster empowered culture
29 May 2011;hindustantimes.com:Mumbai: As chairman Ratan Tata gets set to hang up his boots, there is plenty afoot at the salt-to-software Tata group, with a clutch of programmes to create new leaders. And the driving mantra is innovation friendliness. The group has initiated an “innometer” to measure and monitor new innovations in the g roup, while it groomed new leaders with a “talent meter”, R Gopalakrishnan, director at the holding company, Tata Sons Ltd, told Hindustan Times at the group’s Bombay House headquarters. “We have initiated something called a ‘rich jobs programme’ to create larger jobs for people with potential. You grow leaders by giving rich responsibilities. We are implementing it gradually,” he said. The initiatives are part of efforts to create an empowered set-up where individual companies function as independent, loosely controlled units. It is widely believed that the Tatas are working on a transformation of its organisational model along with the leadership change slated for the end of end 2012. “We are consciously making our culture innovation friendly,” Gopalakrishnan said, explaining that it was vital for a large organisation. “We are far from where we should be where people who come here would say this place encourages innovation.” To make this go beyond a slogan, the group has devised the “Innometer” — a computerised measurement of the culture of innovation in each department. “By measuring innovation culture we are sparking the desire for innovation,” Gopalakrishnan said. In the backdrop, the Tata Group Innovation Forum (TGIF) is busy compiling the group’s landmark innovations in more than a century of existence. “Every 10-15 years Tata has come out with something dramatic and what is relevant to that period,” Gopalakrishnan said. Among the innovations that the Tatas count as their own are low-cost water purifier Swach and the very idea of offshore-based software services. “You can’t put an IP (intellectual property right) on it. But it gave us a $50 billion company,” Gopalakrishnan said. The Tatas are also documenting management innovations to help internal training across the conglomeration. These include their experience in acquiring and transforming public sector companies or in reviving ailing firms.
How Maruti is struggling to woo its customers back
29 May 2011;economictimes.indiatimes.com:Malini Goyal: Shinzo Nakanishi is in a dilemma his competitors would give an arm and a leg to be in. The 64-year-old managing director of India's largest carmaker is finding it difficult to come to terms with an enviable position his company has been blessed with: leadership. "We can't see anyone in front. All are behind. My management and I have no experience [of such a phenomenon]." There's a simple reason for that: Suzuki is a minnow in the global auto sweepstakes, including in its home country Japan. Nakanishi, who has been working with Suzuki Corporation since the 1970s, is more accustomed to being at the tail end rather than at the pole position. "We were always No. 7, No. 8. Toyota,Honda, Nissan, everybody was ahead of us," he recalls. India is different. "Here we are top runner. What should we do? What we should do?" asks Nakanishi. Suzuki, the global follower is grappling to guide Maruti, the Indian leader, that too at a time when Maruti is under its most severe attack. Its market share has been steadily falling, from a virtual monopoly in the 1980s to 63% in 1999 to well under 50% now. But falling market share isn't a new or the immediate problem. That's because of two reasons: it still controls an impressive 45% of the Indian car market and the company has shown an impressive sales and profits growth in recent years. It's the dramatically transformed nature of the competition and a fundamental shift in car buyers' preference that now threatens to deliver a knockout challenge to Maruti. Frenetic battle preparations are on to maintain Maruti's grip on Indian roads. But its bigger battle is internal, not external. Used to being led in Japan, leading does not come naturally to both Suzuki and Nakanishi. Faced with strong wave of competitors, the first instinct is to follow. "We follow someone who is No. 1 and learn from them, from Nissan and Toyota," says Nakanishi. Yet it is this humility and honesty which reassures that the company with the slogan "India comes home in a Maruti" is serious in taking the battle of its lifetime head on. But first more on the magnitude of it challenge.
29 May 2011;business-standard.com:New Delhi: Electric two-wheeler maker Lohia Auto today said it would be in the race to acquire beleaguered public sector firm Scooters India, in which the government has decided to offload its entire 95.38% stake. The National Capital-based firm will be slugging it out with the likes of Atul Auto and Mahindra & Mahindra (M&M) once the government goes ahead with the stake-sale process with the seeking of approval of Parliament in the monsoon session. "Once the due procedures are finalised, we will go ahead with bidding for Scooters India," Lohia Auto Industries Chief Executive Officer Ayush Lohia said. On whether the firm had decided on the size of the bid, Lohia said: "We have not decided yet as the valuation has not been done. It will be clear only after the due diligence." Meanwhile, the company has already started discussions with various private equity players to raise funds. "We will tie up with PE firms to fund the acquisition. But we are not looking for any joint venture with any other auto maker," Lohia said. If the company succeeds in acquiring Scooters India Ltd (SIL), it will expand the reach of Lohia Auto, he added. "This gives a very good opportunity. SCI products are already established. While SIL's three-wheelers have 7 people capacity, our own upcoming vehicles will have a capacity to carry four passengers," Lohia said. The firm has recently announced its planned foray into the three-wheeler segment in the next six months with both diesel and CNG models, priced between Rs 1.25 lakh and Rs 1.35 lakh (ex-showroom). Besides Lohia Auto, Rajkot-based Atul Auto had said it is willing to acquire the entire stake in SIL, while M&M had said it will examine the opportunity and will announce a final decision on the acquisition of SIL within the next 45 days. The government, however, is hopes that some foreign players may show interest as the auto sector comes under automatic 100% foreign direct investment. Earlier, the Cabinet had approved divestment of the government's entire 95.38% stake in SIL, which has been suffering losses since 2002-03 and its entire networth completely eroded by 2008-09. In March 2009, the company was declared sick and went to the Board for Reconstruction of Public Sector Enterprises (BRPSE). As on 2009-10, it had a net loss of Rs 22.03 crore.
Nano starts overseas journey, Sri Lanka first destination
28 May 2011;business-standard.com:Tata Motors today said it has begun exporting Nano with the official launch of the small car in Sri Lanka, with a price tag starting at LKR 9.25 lakh (about Rs 3.80 lakh). "Sri Lanka has become the first international market for the Tata Nano, with the people's car being commercially launched in the country today," the company said in a statement. The car will be sold through its 50-year old distributor in the country -- Diesel & Motor Engineering PLC (DIMO). "Tata Motors has already established a firm footprint in international markets...The Tata Nano will play a major role in the next phase of growth of our international business," Tata Motors Managing Director and Group CEO Carl-Peter Forster said. A company spokesperson said the three variants of the car will be available at ex-showroom prices between LKR 9.25 lakh (about Rs 3.8 lakh) and LKR 11 lakh (over Rs 4.5 lakh). In India, the car is priced between Rs 1.40 lakh and Rs 1.97 lakh (ex-showroom, Delhi). Talking about Nano's future journey, Tata Motors Managing Director (India Operations) P M Telang said: "The stupendous international response to the unveiling of the Tata Nano in 2008 established that customers across the world were awaiting such a car. "We have already formulated plans for its introduction in several countries, to be implemented over the next few years." He, however, did not share details such as which could be the next global market for Nano. Nano, touted as the world's cheapest car, is now produced at Sanand in Gujarat for the Indian market after initially being producing at Pantnagar in Uttarakhand. Besides Nano, the company today introduced five more products in the commercial vehicle segment. It launched Tata Divo luxury buses, Tata Marcopolo low-floor buses, Prima 4928 tractor trailor, 1618 truck and a high-end variant of the Ace. Tata Motors had started sending the Nano to overseas markets from April with shipment of 498 units. Besides Sri Lanka, the firm was exploring possibilities in different neighbouring nations such as Nepal. In 2009, Tata Motors unveiled the European version of Nano -- Nano Europa -- at the 79th Geneva Motor Show. The company was expected to launch the car in Europe by 2011. The version in Europe is said to have airbags, central locking and would be Euro V emission norms compliant. Although Tata Motors did not reveal any price tag for the Nano Europa, British media had predicted a price of over $6,000. The Indian edition of the car hit the roads in 2009 for about $2,500.
27 May 2011;hindustantimes.com:Mumbai/Thiruvananthapuram: Oil companies resumed supply of jet fuel to national carrier Air India on Friday after huge unpaid bills led to the cancellation of four flights earlier in the day. "We have reached an understanding on the issue. We would be paying for our jet fuel requirements and also expect further relief from t he ministry of civil aviation in this regard," senior Air India operations official said. According to the Mumbai-based official, the understanding on fuel supply was reached after senior officials from Air India and oil marketing companies discussed the issue, which had till afternoon grounded four domestic and international flights. "High-level parleys were conducted between two-sides to reach the understanding," the official said. Earlier, the flag carrier was placed on a cash-and-carry basis by the three state-owned oil marketing companies, including Indian Oil Corporation (IOC), Hindustan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL), for the unpaid fuel dues. "We have placed Air India on cash-and-carry basis. They would now pay us every time they buy jet fuel from any of the three companies," senior official with a public sector oil firm said. Currently, the airline has a consolidated fuel debt worth Rs.2,000 crore to the three oil firms. Air India confirmed that it will be paying the required amount to buy jet fuel from the oil firms. "We will be paying them for our immediate needs," Air India official said. However, aviation experts doubt the viability of the airline to operate on such payment schemes as it is already under tremendous financial burden. The flag carrier has a daily requirement of Rs.16 crore worth of Aviation Turbine Fuel (ATF) of jet propellant-1 (JP-1) type. Four Air India flights on domestic and international routes were cancelled early on Friday morning as oil firms refused to provide jet fuel and demanded that the carrier pay cash for the ATF. "Our operations officials were asked to pay there and then. Now paying of such high amount requires senior authorisation, which takes time. That's why the four flights had to be cancelled." The four cancelled flights were two from Kochi and one each from Thiruvanathapuram (to Chennai) and Kozhikode (Air India Express flight to Muscat). "Two flights from Kochi - Air India Express flight to Sharjah and a domestic flight to Bangalore - have also been cancelled. But we are able to operate the Riyadh flight from Thiruvananthapuram via Kochi that is carrying 400 passengers," said the Air India official.
Oil cos threaten to stop jet fuel supplies to Air India
27 May 2011;timesofindia.indiatimes.com:NEW DELHI: State-owned oil companies have said they will resume fuel supplies after earlier stopping them to Air India after the cash-strapped national carrier repeatedly defaulted on payment of fuel bills. Air India was put on cash-and-carry from December, but the airline has not been able to pay for even its daily fuel purchases. The carrier were forced to slash its daily flights. On Friday, five domestic flights in the southern region were cancelled and one international flight from Thiruvananthapuram to Riyadh was cancelling following this notice, according to TimesNow. Oil companies last week sent a notice for stopping aviation turbine fuel (ATF) supplies to Air India at some airports like Calicut and Jaipur, officials said here. Air India owes Indian Oil Corp (IOC) about Rs 1,900 crore. IOC meets 63 per cent of Air India's jet fuel needs. The national carrier has run up an outstanding bill of over Rs 300 crore with Bharat Petroleum Corp Ltd (BPCL), while its dues to Hindustan Petroleum Corp Ltd (HPCL) are relatively small. Officials said Air India buys jet fuel worth Rs 18.5 crore per day from the three state oil firms, but it pays only Rs 13.5 crore. This led the oil firms to threaten to stop supplies of ATF beyond what Air India pays for. "Oil companies already incur huge losses on selling diesel, domestic LPG and kerosene way below their production cost and to expect them to sell ATF at subsidised rates is not acceptable," an official said. At a meeting called by Cabinet Secretary K M Chandrasekhar in March to resolve the payment impasse, Air India sought discounts similar to the ones given to private airlines. Oil companies give a Rs 1,600-1,800 per kilolitre discount to private airlines on promise of assured payment. After adding finance charges for a 90-day credit period, the discount comes to Rs 3,600 per kl. "Even if this discount is stretched to Rs 5,000 per kl, the Rs 18.5 crore per day fuel bill will not become Rs 13.5 crore. After including some more concessions, the fuel bill at best will come down to Rs 17 crore a day, a far cry from the Rs 13.5 crore paying capacity of Air India," he said. Officials said Air India was discussing only the payments for future ATF purchases and there was no word on how the state carrier will clear the past outstanding. "Air India talks of getting the same discounts as private airlines, but does it know that ATF purchases by airlines such as Jet Airways and Kingfisher Airlines are covered by a bank guarantee in case of default?", an official asked. Both Jet Airways and Kingfisher have brought down their outstanding to manageable levels and have provided bank guarantees to cover against any default.
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