The Tatas must lead the rest…

There are plenty of engineering and technology big-wigs who could lead the Indian Corporate Sector into the Indian Defense Sector, but none like the Tata Group. Mahindra & Mahindra is being mentioned along with the Tatas but it does not have have the depth and breadth to lead the industry into uncharted waters. Larsen & Toubro (L&T) is yet another contender but is relatively confined. L&T however should partner with Mazagon Dock Limited to develop the infrastructure to build the next generation of Indian Aircraft-Carriers. Besides, Mazagon Dock should be privatized immediately. Coming back to Tatas, the group is already setting up joint ventures with The Boeing Company, EADS (European Aeronautic Defense & Space Company) and IAI (Israel Aerospace Industries) to manufacture defense and aerospace products.

There are other Indian companies who have developed specific capabilities to contribute to the Indian defense industry. Baba Kalyani’s Bharat Forge is the second largest forging company in the world. Godrej & Boyce Manufacturing is also a leading engineering company ready to bid for defense production. Suzlon Energy is the largest wind turbine manufacturer in Asia and a prospective defense supplier. Others like Kirloskar Brothers, Hindustan Construction Company, Mukesh Ambani’s Reliance Industries and Essar Group are all waiting in the wings to form alliances with foreign suppliers and become significant players in this multi-billion defense bonanza. India is likely to spend half a trillion dollars in the next 10-15 years on defense related capital goods as well as it’s infrastructure. Amongst them all, The Tata Group is likely to be the biggest beneficiary.

The Tata Group was established by Jamshedji Nusserwanji Tata in 1868 by establishing a trading company in Bombay, India. Jamshedji Tata was born in Navsari, Gujarat on March 3, 1839. His father, Nusserwanji Tata was also a businessman in a family of Parsi Zoroastrian (originally from Iran) priests. Nusserwanji moved to Bombay and started a trading company. Jamshedji joined his father at the age of 14 and learnt the art of business for the next 15 years. Jamshedji Tata established a cotton mill in 1869 and called it ‘Alexandra Mill’. Within two years, he sold the cotton mill in Bombay and set up another textile mill in Nagpur on January 1, 1877. He named the cotton mill, ‘The Empress Mills’ after Queen Victoria, the Empress of India. Tata laid the intellectual foundations to establish an iron and steel company, a hydro electric plant and a research institute for fundamental research. His dreams did realize but only after his death on May 19, 1904.

Why would Mahindras buy Hummer?

There has been some talk of Mahindra & Mahindra (M&M) trying to buy Hummer from General Motors. This sounds absolutely illogical. Hummer is an inefficient vehicle and probably uses out-dated technology to manufacture it. Why would such a savvy businessman like Anand Mahindra even consider a purchase that the US government would so easily let-go? Anand is no stranger to America and he knows that any technology worth buying would face tremendous media resistance here. Or, is he (Anand) watching too much American TV because Hummer has featured in some of the war-movies, since ‘Operation Desert Storm’? Hummers have poor fuel economy.

Hummers were originally built by AM General Corporation, now a part of GM (General Motors of US). The Hummer platform was developed by AM General in 1979 to replace the obsolete World War II Jeep. The initial design work, code named M998 series, was done to produce a “High Mobility Multi-Purpose Wheeled Vehicle” (HMMWV) popularly called ‘Humvee’. In 1983, the LTV Corporation bought AM General from American Motors Corporation and established LTV Aerospace and Defense Company. The first Hummer rolled out off the assembly line on January 2, 1985. These Humvees (Hummers) became the workhorse of the US Armed Forces during the 90s. The civilian version of Hummer was introduced in 1992.

Acquiring ‘Hummer Brand’ from GM might be an expensive proposition for Mahindra & Mahindra. What could be the purpose, is it a civilian gamble or do Mahindras have some ‘Military Supply Plans’? Looking at Mahindras history, it could be a very interesting proposal! The family-owned Mahindra trading group ventured into auto business during the Second World War as a contractor to supply Willys Jeeps to the British Army. The M&M (Mahindra & Muhammad) Company was established on October 2, 1945 by Mahindra brothers (JC Mahindra & KC Mahindra) and Ghulam Muhammad as a franchise for assembling Jeeps from Willys, USA. After the partition of India in 1947, Ghulam Muhammad migrated to Pakistan and became that nation’s first Finance Minister. He later went on to become the 3rd Governor-General of Pakistan in 1951. Mahindras meanwhile changed the name of the company to Mahindra & Mahindra and never looked back.