Tata Motors appoints Guenter Butschek as MD and CEO3 min read . Updated: 19 Jan 2016, 01:46 AM IST
Butschek will lead all operations of Tata Motors in India and in international markets including South Korea, Thailand, Indonesia and South Africa
Mumbai: Tata Motors Ltd’s long and expansive global search for a chief executive officer has ended with the appointment of Guenter Butschek as CEO and managing director.
Butschek, 55, will lead all operations of Tata Motors in India and in international markets, including South Korea, Thailand, Indonesia and South Africa, India’s largest automaker by revenue said on Monday.
Jaguar Land Rover, the company’s UK subsidiary, will continue to be managed by its CEO and director Ralf Speth, who is also on the board of Tata Motors.
Butschek, who is expected to join Tata Motors on 15 February, will have the task of turning around the fortunes of a company that has seen domestic passenger car sales and market share roughly halve in the past two years, with profit held up mainly by Jaguar Land Rover.
Butschek was last at plane-maker Airbus Group SA where he served as chief operating officer and was a member of the group executive committee.
Prior to Airbus, he worked at Daimler AG for more than 25 years in international automotive management, leading functions like production, industrialization and procurement. His last role at the German automobile company was as president and CEO of Beijing Benz Automotive Co. Ltd., a joint venture between Daimler and Beijing Automotive Industrial Holding in Beijing, China.
His appointment comes ahead of a likely restructuring at Tata Motors based on the recommendations of consultancy Accenture India Pvt. Ltd.
The restructuring is aimed at improving organizational effectiveness and making the company more nimble, said two people familiar with company’s plans. Both declined to be identified.
According to the two persons, Tata Motors may decentralize its structure as part of the restructuring.
As against the current structure of having a common quality, research and development (R&D) and supply-chain head for both commercial and passenger vehicles, the firm will appoint separate heads for each function who would, in turn, report to respective business unit heads—Mayank Pareek for cars and Ravi Pisharody for commercial vehicles.
The chief executive’s position at Tata Motors has been vacant since the demise of Karl Slym on 26 January 2014 during a visit to Thailand. In the absence of a CEO, Tata group chairman Cyrus P. Mistry has been overseeing the top function at the automaker through a steering committee formed in February 2014.
Butschek will be the first CEO of Tata Motors with the experience of having worked at a global aerospace firm.
“Among other things, Tata Motors needed someone who brings global experience,"said a senior executive with Tata group, requesting anonymity.
Butschek brings to the job key attributes including flawless execution skills, in-depth knowledge of what technology can do to improve the consumer experience and a sharp focus on competitiveness, he added.
Butschek’s aerospace experience complements his core automotive skills, said K. Sudarshan, regional managing partner at EMA Partners International, a global executive search firm. He brings sophisticated knowledge of processes and systems and global best practices which Tata Motors needs, said Sudarshan, pointing out that his biggest task at the firm will be to drive change.
In response to an email sent to Tata Motors, a spokesperson at the firm said, “Accenture is currently working with Tata Motors for an organizational effectiveness programme. Their recommendation is for empowered business units along with strong corporate functions. We are unable to offer more specific details or comments at this time."
A graduate in business administration and economics, with a diploma from the University of Cooperative Education Stuttgart, Germany, Butschek brings broad functional and general management skills, and wide international experience to his new role at Tata Motors, said the company statement.
“Tata Motors is going through an exciting, yet challenging, phase and Butschek’s appointment comes at an opportune moment. He brings with him rich global experience of growing organizations and developing new markets. I am confident that Butschek’s ability to lead high performing teams will enable our company to achieve sustainable, profitable growth," Mistry said in the statement.
Butschek’s appointment comes at a time when the maker of Nano and Zest models is at an inflection point.
As part of the so-called Horizon Next strategy prepared during Slym’s tenure, the company is in the process of unveiling a flurry of new car models—the Zica compact car, Sway sedan and Hexa crossover—at Delhi’s auto expo next month, as it seeks to recoup the significant market share it has lost. It launched the Zest sedan and Bolt hatchback in 2014 and 2015, respectively.
Tata Motors shares edged barely changed on the BSE on a day the benchmark Sensex fell 1.09% to 24,188.37 points.