The Jaguar and Land Rover Turnaround

I was pleased to read the New York Times recent article “Tata Motors Finds Success in Jaguar LandRover”.

The article describes the turnaround of the troubled England based manufacturer of Jaguars and Land Rovers by Tata Motors an automobile manufacturer headquartered in India.

Tata purchased the company from Ford Motor Company in 2008.

The sad aspect of this story is that an Indian automobile manufacturer could fix and turnaround this complex operation but the venerable Ford Motor Company could not.

Surprisingly, this may be an indication of some weakness in Ford's management ability.

Allegedly foreign manufacturing operations in developing countries are not capable of matching the management abilities of USA companies.

Can Ford's failure in this regard, be applied to studying the weakness in the USA's overall manufacturing capability?

The question remains, “Can Manufacturing Return to the USA?”

India – What Hinders Its Development?

Some thoughts on the interesting book “In Spite of the Gods – The Strange Rise of Modern India” by Edward Luce, the Financial Times' Washington Bureau Chief. He worked and lived in India for years.

While his conclusion is that India will become an economic super power, its many negatives will delay its development.

Some of the negatives:

Its massively ineffective and corrupt "quasi-socialist" political system.

Labor laws are too restrictive, cannot fire or lay off any employees, even if they are criminals, which supports the case for outsourcing only and not investing in 100% owned operations.

Literacy in China is 90%, in India it is 65% - female literacy is 48%. Focus in India is on university education, not elementary school education which China has focused on to build a viable work force. By comparison, the USA's literacy rate was 90% during its industrial and economic ascendancy in the 1800s.

India lacks investment in infrastructure, just starting to build roads and highways.

Bulk of population lives in small villages, not an urbanized country most developing countries tend toward. Of 1 billion population, 750 million live in small villages.

People are not motivated to seek a better life, caste system is an obstacle, lack of ambition somewhat stifled by elite strata which are still very British oriented.

Corruption is pervasive and extensive. Bribes are commonplace.

A telling difference between China and India is that China has accepted capitalism. Surprisingly for China's controlling government, its economy is based on market-driven industrialization. India has not accepted capitalism with its over-regulated private sector which is a draw back to growth and development.

An interesting fact:
India's police have "encounter specialists" which are policemen who kill criminals the police decide are guilty - prior to a trial. India has a 27 million criminal and civil case backlog. Police kill criminals because evidence gets lost, witnesses die, low-paid judges are easy to bribe and it takes too long for cases to come to trial.