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Following a 34-year career in the United States Foreign Service, David Good joined Tata Sons, Ltd., in 2005 as the company’s chief representative for North America — a role Tata Group chairman Ratan Tata likened to being “an ambassador” for the Tatas in the United States. At the recent Wharton India Economic Forum in Philadelphia, Good spoke with India Knowledge@Wharton about Tata Sons’ objectives in the U.S. and other markets outside India, the Nano launch, the economic downturn and the Obama administration’s recently announced restrictions on hiring H-1B visa holders at firms receiving TARP funding, among other issues.
An edited transcript of the interview follows:
India Knowledge@Wharton: David, thank you very much for joining us today.
David Good: It’s a pleasure to be here. Thank you for inviting me.
India Knowledge@Wharton: I believe that you worked for the U.S. State Department for 34 years before you joined the Tata Group?
Good: That’s right.
India Knowledge@Wharton: Could you tell us a little about your career in government and how your joining the Tata Group came about?
Good: Well, I [worked for] 34 years in the government. I spent 34 years in the Foreign Service. I can look back on my career and say that I was very fortunate that I went to India on my very first assignment. I had never thought about going to India — I’d never thought about India at all while I was growing up. But when I joined the Foreign Service, there was the opportunity of going to New Delhi, and so I went there in 1971. I spent five years in India and really became enthralled with the place… I thought that this might be a place I’d like to make my career. But the reality of the Foreign Service entered: After those five years, I went off to the Middle East and spent over 20 years there.
But then I had the opportunity of coming back to India in 1999, when I became Consulate General in Mumbai, and I spent three years there. Those three years coincided with India’s [initial] development as a major economic power and [the development of] its IT sector. And because of that, its relationship with the United States became much stronger. At the same time, political relations began to [improve] between the United States and India. So, after finishing my three years in Mumbai, I went back to Washington, D.C., and became director of the Indian, Nepal and Sri Lanka office at the State Department, where I was able to watch the development of the political relationship from even closer quarters.
Then, I retired from the government in 2004. At that time, I could see that U.S.-India relations were sort of a growing concern, and there were going to be a lot of opportunities — perhaps in the private sector outside of government. So I was looking in the private sector for some kind of a post-government career and always thought that I would probably end up working for an American company that was doing work in India. But … at the same time, Ratan Tata, the chairman of Tata, had decided that he wanted to open up an office in Washington. Someone got us together and I met people from the Tatas. One thing led to another, and then in early 2005, I joined the Tatas as the North American representative.
India Knowledge@Wharton: I understand that Ratan Tata described your role as being “the ambassador for the Tatas in the United States.” So, what exactly does an ambassador for the Tatas do in the U.S.?
Good: It’s interesting, because coming from a diplomatic background I found a lot of similarity between what I was being asked to do for the Tatas and what I used to do for the American government. It’s true that Ratan Tata did tell me at the time that I met him, before taking the position, that he envisioned my role as being that of an ambassador for the Tatas. I think what he meant by that, and the way that it’s actually turned out, is that I represent the views of the Tatas — the objectives and goals of the Tatas in the United States. I interact with government officials, with regulators, with legislators [and] with people from the Executive Branch on some issues of concern and interest to the Tatas. I also report back to Tata headquarters — to Bombay — about what I hear in Washington, what the trends are, what people are thinking about India, what people are thinking about Indian business. I try to be a interlocutor, if you will, between the Tatas in India and the United States government in particular, but also with the population [or] America at large — meaning with academia, with American business, with American think-tanks — to sort of explain one to the other.
India Knowledge@Wharton: What are the strategic objectives that the Tatas have for the U.S.?
Good: Well, I think the Tatas want to grow in the United States as a good corporate citizen. I think one thing that you can say very clearly about the Tatas is that we would like to be known as a global company. We are a global company. We’re very proud of our Indian heritage. We’re very proud of the fact that our roots are in India and they always will be in India. India will always be the primary source of our strength and the primary source of our growth.
But at the same time, we do wish to grow and we wish to grow internationally. And that means that we want to grow according to global standards. So, we want to be known as a global company that also happens to be rooted in India. In the United States, we want to grow as a company. We want to be able to grow our revenues there for the benefit of the shareholders, but, at the same time, we also want to be known as good corporate citizens…. In India, the Tatas are really the gold standard for giving back to the community. And we want to be known that way in the United States. And, in fact, in any country where we operate, [we want to be known as] a global company rooted in India but still very concerned about our role in the community and wishing to make a contribution to that community.
India Knowledge@Wharton: Certainly, in the past couple of years the Tatas have pursued quite a few growth opportunities — for example, in the hospitality business in the U.S., and also in the automotive business. Where do you see growth opportunities for the Tatas today, and have these opportunities changed because of the global financial crisis?
Good: The opportunities are still there, but I think that they’re on hold right now. I like to think of ourselves not as a car that’s come to a complete halt, but rather one that’s sort of in an idle stage right now because the situation of the global economy has meant that everybody’s more interested in consolidation right now than in immediate growth. I think that we still see growth opportunities, but at this particular point we’re kind of looking at those perhaps a year or so from now, once the economy begins coming out of the situation in which it finds itself now. Where are the opportunities? I think where they always were. You mentioned hospitality. We already have three hotels in the United States — The Pierre Hotel in New York; the former Ritz Carlton, now called The Taj Boston, in Boston; and we have a hotel in San Francisco called Campton Place. We’re looking at the possibility of acquiring hotels in other major gateway cities in the United States.
We also see opportunities in places that you may be surprised. We now have two Tanishq jewelry stores in the United States: One outside of New York City, in New Jersey, and one outside of Chicago in Illinois. We see that as a possible growth story and hope to be able to open up more stores. We have soda ash mines in Wyoming, and Tata Chemicals is now the second largest soda ash producer in the world, and we see that as a growth story in the United States, too. And beverages: As I’m sure that you know, we own Tetley Tea, the very iconic tea brand, but we also own — and a lot of Americans don’t know this — 8’O’Clock Coffee, which is one of America’s oldest coffee brands, as well as an herbal tea company from California called Good Earth Tea. And so, we see beverages as another area in which we want to expand.
The automotive sector, I think, will definitely have an opportunity for expansion, but I think right now the automotive sector is really sort of in the doldrums. We’re going to have to wait until that begins to come out of its current, rather difficult, situation — but yes, we see the United States as a place for Tata Motors to expand at some time in the future. We have a presence here now through Jaguar Land Rover. But we’re not selling any other kind of vehicles. We do sell some auto parts in the United States.
India Knowledge@Wharton: Do you think you might ever sell the Nano in the U.S.?
Good: I think it could be possible. As you probably know, we just announced a design for a Nano in Europe [which meets] European standards. I think it’s quite likely that sometime in the future — I can’t tell you exactly when, because it’s not on the drawing boards right now — but I think at some time in the future, certainly some form of the Nano designed for American roads and American consumers is a very distinct possibility.
India Knowledge@Wharton: As you pursue these opportunities that you just described, what are some of the principal obstacles that the Tatas have faced, and how have you overcome them?
Good: The United States is a very complex market. It can be unforgiving in some ways, so I think that we want to be very careful how we present ourselves [there]. If you get off on the wrong foot — if you develop a reputation for delivering a product that’s not quite right for the American market — it can take you a long time to come back again and to build up your reputation. So I think we want to build up our presence in the United States in those areas in which we have a lot of capabilities and a lot of experience, like hospitality, like software — we have a very large software presence — in the beverage area, in engineering. These are all areas in which we have a lot of experience in India and other countries, and so this is where we started in the United States.
India Knowledge@Wharton: Speaking of software, recently there have been a few reports that financial institutions that have accepted TARP funding may face some restrictions in hiring foreign workers. Do you see this affecting the Tatas, or other Indian companies, and are you doing anything with Congress to try and address this?
Good: Of course, the United States is trying very hard to come out of this recession that it’s in, and it’s understandable that Congress and the Administration would want to do things that are going to be helpful to American businesses. The TARP funds that are being given to financial institutions do have a provision that institutions that receive TARP funds cannot directly hire H-1B visa holders, except under certain kinds of conditions. We don’t think that the regulations and the way that they’re written right now are going to affect us very much. They’re very narrowly written, in the sense that they only affect those institutions that are accepting TARP funds, which of course we are not.
But, nonetheless, there is a direction here that does concern us a little bit. If there are additional restrictions put on H-1B visas, or L-1 visa holders, that’s something that could create some difficulty for us in the future. So, yes, we are talking to members of Congress and we’re talking to our American business partners also, because I think one thing that we want to make clear to people in the United States is that H-1B visa holders are not the problem with American unemployment. I think there are a number of stories that show that outsourcing — the kind of profits in increased productivity that come from outsourcing certain kinds of functions to India and to other countries — creates more wealth back in the United States that it actually loses, and that wealth then creates more jobs. And so we want to make sure that people understand the full picture of what H-1B visas and L-1 visas really mean, and what outsourcing really means, and how there’s also a large amount of in-sourcing to the United States from Indian companies.
In fact, there’s a very important point I’d like to make, and that is that the traditional business model for Indian companies that Americans are familiar with — IT companies coming in and sort of taking contracts and jobs and taking them back to India — is really changing quite a bit. It hasn’t disappeared, but what you have now is a new model whereby a number of Indian companies like Tata are actually coming into the United States and investing in the United States — creating jobs in the United States. And I can give you a number of different examples of that, including call centers that we run — and other Indian companies run — where hundreds of Americans are answering telephones. Not in Bangalore, not in Delhi — but in places like Pensacola, Florida, and in Ohio in the middle of Appalachia.
India Knowledge@Wharton: I wonder if you could end with just one final personal question. How do you define success?
Good: I think success is a couple of different things. First of all, laying out a set of objectives, having a clear plan to reach those objectives and actually achieving those objectives is obviously a success. But you have to think also about how those objectives are going to affect the people around you. It’s something very important for Tata. And something that I’ve learned from the four years that I’ve been with Tata — and you find this absolutely through all levels of people working for Tata — is that success is only real success if you can bring a better life to the people around you. Jamsetji Tata, who founded the Tatas, made it quite clear that there’s no valid reason to accumulate wealth unless you can take that wealth and return it to the people from whom you made that wealth. That’s the value by which the Tatas have been operating over these last 130 years, and I think that is the clearest measure of success for them. Tata executives, from the top to the bottom, will ask themselves: “Has what I have accomplished in the business sector actually improved the lives of the people around me?” And that I think is our definition of success for the Tatas.