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There are legacy issues at Tata Motors: New MD Guenter Butschek

The country’s largest automaker by value will undergo a cleaning process for the commercial vehicles and passenger vehicle segments.

, ET Bureau|
Updated: Aug 31, 2016, 12.59 AM IST
NEW DELHI: Tata Motors’ new managing director Guenter Butschek is on a massive cleaning drive. He admits "legacy issues" are plaguing the company both internally and on the supplier front and has also started work on rationalisation of vendors and vehicle platforms.

Expressing concern over internal challenges, Butschek said, "We have put a lot of focus on the inside and yes, I found some legacy issues. We have addressed them in transformation."

The country’s largest automaker by value will undergo a cleaning process for the commercial vehicles and passenger vehicle segments. It is also likely to go live with its new organisational and salary structure by January 1, 2017.

"We had a flat supplier base, which we will transform into pyramid structure. There will certainly be a significant decrease in the number of suppliers," said Butschek.

Tata Motors currently has about 1,300 suppliers, which include small parts makers as well. The move is also seen as an effort to improve ease of doing business by reducing the number of interface.

"We will have only the complete system suppliers rather than every individual part," said Butschek.

According to the MD, suppliers will be chosen based on three basic parameters — technical knowhow, financial conditions and everyday actual process.

"When these vendors were appointed, technology standards were different, mostly being built to print. But now, times and requirements have changed," he said.

Butschek prides himself on being a rebound specialist and has joined the Indian company for the same job. He is looking at overall transformation for the company. Tata Motors, which is the largest commercial vehicles maker, is looking at propelling itself further in the passenger vehicles space.

"We want to be present in as many customer segments as possible," said Butschek. Tata Motors will target lesser platforms, more products.

At its recent AGM, chairman Cyrus Mistry had told shareholders, "This company is on a turnaround and the results are for all to see."

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