Al Ahram, p.4, (1-4-2008)

Fast track

By: Sajini Dularamani

The huge Indian Tata group bought Jaguar and Land Rover in Britain from the American Ford for $2.3 billion. This was surprising. Last year, Tata produced "Tata Nano", the world's smallest and cheapest car priced at no more than $2500. The new car sold well among the middle class. Why would Tata take the risk of producing a luxurious car that would reduce its sales? Ford had to sell the company after suffering losses of more than $10 billion.

The deal seems to be a bite too big for Tata to swallow. In fact, the deal represents a turning point putting India on the fast track of international recognition that it owns the highest levels of sophisticated industrial and technological development in the car industry. Thus, it quickly gained confidence in its ability to compete in the international market.

The West has prepared itself for the emergence of India and China as two economic major powers. Yet, it had been believed that they would follow the Japanese model of adhering for decades to the less developed and less costly methods of production which serve their domestic and regional markets, or at most the needs of the middle class in the developed countries. But, the market of the technologically and industrially more developed products would be controlled by the advanced countries. The Indian deal went beyond this limit and occupied a prominent position among major producers.

Hence, Tata pledged to keep the production lines in Britain till 2011 that it may benefit from the distinguished methods of production and management. In return, it will acquire from Ford car-making technologies with less emissions of harmful gases. What would Tata add to the deal? This company started by trading in textiles during the British occupation, built up the first steel factory and the first plane, acquired the British-Dutch steel company Corus, and extended to the field of IT services and satellite networks. It is distinguished by its ability to run negotiations with trade unions, even in cases of having to reduce workforce in its factories. Consequently, it could provide workers with relative stability that they have not known under Ford's management.

More than 50 years ago, India was a British colonization. After independence, its civilization and films attracted the attention of the rich in the West. Now, they have to be accustomed to having Jaguar cars produced by an Indian company. Do we need another proof that the world has changed and that we have to change too?

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