November 25, 2013

How Ratan Tata Thwarted a Violent Labor Union Takeover

Two weeks after assuming the chairmanship of the Tata Group, Ratan Tata faced a labor strike, death threats, and stabbings of his management team. Here, he describes how he remained unbowed.


In November 2013, Ratan Tata, chairman emeritus of the Tata Group, sat down with Gita Johar, senior vice dean of Columbia Business School, to talk about leadership in the face of adversity. Here, he discusses one the gravest challenges of his career.

“Fifteen days after I became the chairman of The Tata Group, we had a huge union eruption in Telco, which now is called Tata Motors. There was an outsider, in effect a gangster, who decided there was considerable wealth in our union and wanted to take over control of that. He had about 200 disruptive, violent, intimidating followers. The rest of the 4,000 people in that plant were uninterested. But we had made a mistake by taking the union for granted. The workers were very happy to wait and see what violence would get them.

“This guy wanted to take over the union and we would not let him do so. So we confronted him. There were two views: people felt we should appease him, get him out of the way by winning him over. I was of the view that we could never do that. He beat up or arranged to beat up four or five hundred of our employees. The police were in his pocket. You could go to the police and chances were that nothing would happen. And then he emerged on a really nasty path of going to our officer’s homes at two in the morning, ringing the bell with ski caps on, and then stabbing them, always in the thigh so they didn’t die but they all had to go get surgery. So he demoralized the management.

“There was increased pressure on me to give in. I thought, it’s never going to end here. It’s going to be a takeover of everything, and he will run us like a gangster unit and raid the union of the funds that it has.

“He called a strike, so everything stopped in the company. I put out a call to the workers to come back. They were all afraid to because of what he would do to their families. So I went and stayed in the plant for three days with the workers as they started to come back. We restarted production. People from purchasing, people from accounts, everybody lent their brawn on the shop floor and we started producing vehicles. [The thug] kept saying the plant was closed, so we took out ads showing the number of people that had come back. Everyone saw that the management was firm. So finally he lost. The police stepped in and they arrested him and many of his cronies, and the strike was over.

“As soon as he got out of jail, he put out a contract that he was going to kill me. Again, everybody said, “why don’t you make up with him?” We never did, and that was the turning point of labor relations for that company. Looking back on it, I would never have done it any other way.”

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