Shaking The Foundations

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One of Tata's answers is the $2,200 car, a four-door, rear-engine runabout he designed himself that's currently under development (he aims to sell a million a year in India after its release in 2008). Another is the Ace, a 700cc truck that Tata Motors sells for less than $5,000 and, since its launch in southern India in May 2005, has accounted for two-thirds of all trucks sold domestically. Purchases of these vehicles are supported by low-interest consumer loans from Tata Finance. Tata's hotel chain is building 200 hotels across India under the brand Ginger, offering rooms with wireless Internet access, air-conditioning and en-suite bathrooms for 1,000 rupees ($22), one-fifth of the cost of a typical room paid by budget business travelers in India today.

That same desire to market to, and invest in, some of the world's poorest countries is behind Tata's affinity for Africa. In South Africa, the group has investments in mining, tourism and engine manufacturing. There is an instant-coffee plant in Uganda, a bus factory in Senegal and a phosphate plant in Morocco. "We look at countries where we can play a role in development," says Tata. "Our hope in each is to create an enterprise that looks like a local company, but happens to be owned by a company in India."

Tata says the group's success proves his approach is good business, as well as good karma: "We are not in anything for charity." Lest this all sounds too good to be true, the group is not free from controversy. In 2001, Tata Finance sacked its managing director and five other senior managers over alleged financial irregularities. In January, Tata Steel's plans to build a mill in the eastern state of Orissa went tragically awry when police fired on protesters who were accusing the state government — acting as a broker in the development — of making profits on the sale of their land. Twelve were killed. But to shed 40,000 employees at Jamshedpur, Tata Steel offered to pay their current salaries until retirement age along with free health care for life, and allowed them to keep their company houses for three years. Initiatives like these have kept the group free of strikes and other industrial actions for 77 years.

After 15 years as chairman, however, Tata says he is thinking of retiring. Asked how he would spend his days, he says he gave up golf long ago and has almost no free time outside the business. On rare evenings off, he says he takes a half-hour boat ride across Bombay harbor to a small, scruffy beach house. "It seldom had power, so I had to put in a small generator," he says. "It's quiet and away from everywhere. There is a town and there are neighbors, but I go quietly on my own. I walk the beach and I read and I think about what I should do." It's not how you conventionally picture a tycoon's life. That's his point.