The tenure of Jaguar Land Rover’s (JLR) new chief executive P.B. Balaji, has begun with twin crises of dealing with the exit of chief creative officer Gerry McGovern and the loss of business due to the halt in production in September and October owing to the cyberattack.
According to a report in Autocar India, McGovern was sacked from his role at the Tata Motors PV-owned JLR and was escorted out of the company’s office in Coventry, UK. The development comes just a couple of weeks after Tata Motors' former CFO, Balaji, took over as the chief executive of the UK-based company on 17 November. The company has not yet appointed a replacement for McGovern.
Tata Motors Passenger Vehicles Ltd shares fell 1.17% on Wednesday, compared to a 1.2% decline in the Nifty Auto index. The chief creative officer is responsible for the brand image and design language of an automotive brand, with McGovern considered close to the late industrialist Ratan Tata.
McGovern’s exit, who had been with JLR since 2004, is the second high-profile departure at the British brand, following the announcement in July of Adrian Mardell's departure from the role of chief executive. During this period, the company faced a cyberattack, which forced it to halt production in September and for a few days in October.
In the July to September quarter, Tata Motors recorded a one-time exceptional loss of approximately ₹2,600 crore due to certain expenses related to cyber incidents and the voluntary redundancy programme at JLR. The cyberattack affected the company’s operations across all its plants, and the company is now working to recover from the business losses resulting from the production halt.
According to the Cyber Monitoring Centre, an independent agency that tracks the impact of cyber attacks on UK-based firms, JLR may have suffered a total business loss of £540 million in the September quarter.
Strategic reset
Tata Sons chair N. Chandrasekaran's trusted lieutenant, Balaji, has his task cut out now to stabilise the ship at a company which accounts for about 80% of the newly demerged Tata Motors PV business, experts suggest.
“Just days into the new CEO’s tenure, McGovern was abruptly removed,” said David Bailey, professor at the University of Birmingham. Professor Bailey believes that McGovern’s sacking is “much more than a routine management reshuffle.”
- New JLR CEO P.B. Balaji’s tenure began immediately facing two major, unrelated crises: a severe cyberattack that halted production and the abrupt sacking of chief creative officer Gerry McGovern.
- McGovern's removal is viewed by experts not as a routine move but as a signal of a ‘strategic reset’ under the new leadership, likely giving Balaji and the board more control over Jaguar’s controversial, costly, all-electric future.
- The cyberattack was costly, forcing a production halt and resulting in a ₹2,600 crore exceptional loss for Tata Motors, as well as an estimated business loss of £540 million in one quarter for JLR.
- Amid the headwinds, JLR posted a -1.6% Ebitda margin and was forced to slash its operating profit guidance for FY26 from 5-7% down to 0-2%.
- Balaji is tasked with the critical role of stabilizing JLR, which is the dominant revenue generator for the newly demerged Tata Motors Passenger Vehicle business.
“The timing strongly suggests that this was about a strategic reset. New leadership wanted clarity, perhaps caution and certainly greater control. Removing the architect of Jaguar’s most ambitious gamble gave management room to recalibrate without openly admitting doubts about the wider plan.”
McGovern was one of the key figures behind the controversial rebranding of the British brand Jaguar and the unveiling of its Type 00 concept, which received backlash from many Jaguar Land Rover customers. JLR has discontinued almost all models of Jaguar and is set to relaunch it next year as part of its shift to an all-electric brand.
McGovern was also one of the key advisors for the premium bike brand of TVS, Norton Motorcycles, which unveiled 4 products last month.
JLR declined to comment on the issue. In an emailed reply, Norton said that McGovern has been a key advisor to Norton.
“Gerry McGovern has been a creative advisor to Norton Motorcycles, helping guide our Resurgence creatively. In terms of his departure from JLR, unfortunately, we're not able to comment on that,” a Norton spokesperson said in an email reply.
McGovern did not reply to an email, texts or calls.
US tariffs, cyberattack
Notably, one of the key critics of Jaguar’s brand was US President Donald Trump, who wrote in a Truth Social post in August that the rebrand of JLR was ‘woke’.
Trump asked in the post, “Who wants to buy a Jaguar after looking at that disgraceful ad?” referring to the new advertisement of Jaguar as part of its rebrand.
Balaji took over as the boss at JLR as the company faces multiple challenges, including the US imposition of tariffs on foreign cars and a cyberattack that led the luxury carmaker to roll out 20,000 fewer cars in the second quarter.
“JLR faced one of the most challenging quarters in recent history and posted -1.6% Ebitda margin (well below our estimate of 7%) which was at a multiyear low due to impact of reduced volumes led by the cyber incident, carryover effect of US tariffs (GBP 74m), higher VME (at 6.9% Vs 4% YoY), increased warranty costs, and lower engineering capitalization,” analysts at Motilal Oswal wrote in a note dated 16 November. VME refers to variable marketing expenses.
Jaguar Land Rover, which accounts for 80% of its newly demerged parent’s revenue, cut its operating profit margin guidance to 0-2% from 5-7% for the 2025-26 fiscal year amid multiple headwinds, even as it works to bring production back to the original level.