Tata Motors has pretty much allowed JLR to operate at arms’ length since buying the company in 2008. That changed suddenly on 4 August, when the Indian company announced that its own chief financial officer, PB Balaji, would take over as CEO of JLR from November, replacing Adrian Mardell.
“It’s a harbinger of tighter Tata financial control as the firm enters choppy waters amid the shift to EVs, Trump tariffs etc,” said David Bailey, professor of business economics at the Birmingham Business School.
By picking Balaji (known universally by his surname only), Tata has put in place an executive pivotal to the entire organisation, with board seats on Air India, Tata Consumer Products and battery company Agratas.
Balaji joined Tata in 2017 from consumer goods company Unilever, making Tata his first and only automotive berth. However, the Indian is clearly respected in the role, as his ringmaster position in the company’s quarterly earnings calls shows. He fields the submitted questions from analysts deftly, swiftly dismissing repeats and assigning the better ones to relevant division heads, whether for JLR, Tata Motors Commercial Vehicles or Tata Motors Passenger Vehicles.
From one point of view, Balaji is a safe choice. In times of turmoil, as the automotive industry is currently facing, companies often turn to CFOs for leadership to ensure the finances are storm-proof. Mardell’s three years of profitable JLR leadership after he was promoted from the JLR CFO role proves that you don’t need engineering-born ‘car guys’ to be successful at the top.
“Balaji, like Adrian, is a very highly regarded finance guy within the Tata Group and was already on the board of Tata Motors and JLR so is oven-ready, so to speak,” said Charles Tennant, former director Tata Motors and former chief engineer at Land Rover. “Obviously they didn’t think there was a natural in-house candidate at JLR.”
However, the appointment of an executive from the Tata inner sanctum with no direct knowledge of the delicately balanced luxury car world JLR operates in suggests a change in strategy following the death in October last year of Tata Group chairman Ratan Tata, the man who was instrumental in the purchase of JLR and its biggest champion within the company.
His replacement, Natarajan Chandrasekaran, said in a statement that a search for a replacement for Mardell, who was coming up for retirement, was undertaken in the “past few months” before Balaji was picked.
Balaji will understand well the problems facing JLR. After 10 straight quarters of profit and a 10-year-high annual profit before tax of £2.5 billion in the financial year ending this March (not far off the record £2.6bn in 2015), the company has warned that this year will be different.
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