Tata tells group CEOs to gear up for global financial crisis

Tata tells group CEOs to gear up for global financial crisis
PTI
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First Published: Wed, Nov 12 2008. 02 36 PM IST
Updated: Wed, Nov 12 2008. 02 36 PM IST
New Delhi: Tata Group Chairman Ratan Tata has asked CEOs and Managing Directors of 98 group companies to tighten belts, which could include putting off acquisitions and slowing capacity expansions, in view of the current financial crisis across the globe.
When contacted a Tata Sons spokesperson said: “The senior managements of the Tata Group companies have been advised to be sensitive and conscious of the difficult financial circumstances existing today and have been requested to be proactive to focus on cash flows and conserve expenditure wherever prudently possible.”
“The Tatas are gearing themselves up to face the situation. They are being proactive in managing their companies and not letting the circumstances lead them,” the spokesperson added.
In a letter to the CEOs and MDs, Ratan Tata, who is also Chairman of India’s Investment Commission and a member of the Prime Minister’s Council on Trade and Industry, asked his top managers to review business strategies outlining a six-point action plan keeping in mind the worsening credit crisis.
The leader of the over 62 billion dollar group has asked his top honchos to focus on conserving cash and put off expansion through the inorganic route unless the acquisitions were strategic in nature.
Tata also advised the CEOs and MDs to go slow on capacity expansions, cut costs, and improve operational efficiencies, while increasing efforts to tap into all available credit lines.
The global financial turmoil has affected some of the plans of the group companies, such as Tata Motors failing to get full subscription of its twin rights issue to mop up Rs4,150 crore to part fund the $2.3 billion acquisition of Jaguar Land Rover.
Asking group companies to go slow in acquisitions is also contrary to the group’s previous strategy of expanding through the inorganic route, which has seen it pulling off some of the biggest global acquisitions that Indian industry has seen, such as the $12.1 billion takeover of Anglo-Dutch steel maker Corus in early 2007 by Tata Steel.
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First Published: Wed, Nov 12 2008. 02 36 PM IST