Cynthia Rodrigues

With Tata Technologies setting up its design delivery centre in Bangkok, Thailand, the Detroit of Asia is ready for its rightful place on the global auto-engineering map

Tata Technologies, India is looking east. The company is all set to establish a fully owned subsidiary in Bangkok, Thailand, to handle engineering and design jobs for the automobile industry. The venture is remarkable not only for its display of business sense, but also for the boost it will eventually give to the Thai industry.

Encouraged by the large strides Thailand has taken in the automobile industry, Patrick McGoldrick, MD and CEO of Tata Technologies, mooted this bold new idea. He looked at Thailand as a base to deliver automotive engineering and design services globally, rather than as a market. Many automotive companies were setting up manufacturing bases in the country and  would need engineering and design facilities located nearby. Though still at an experimental stage, the idea has already generated enthusiasm and galvanised people into action.

"Labour and infrastructure costs in Thailand are less than those in India," Mr McGoldrick reasons. Armed with his conviction, Tata Technologies did the groundwork that included conducting a survey of local conditions to determine the feasibility of setting up a delivery centre. The Thai government's support in the form of tax incentives and permission to start a 100-per cent subsidiary in Thailand, a facility not offered to the services sector, also spurred the venture on.

"We were already servicing Western original equipment manufacturers (OEMs) such as General Motors in Thailand," says Mr McGoldrick. "We just took the idea a step further and converted it into a global delivery centre for our clients worldwide. If we could offer our international clients the same quality of work from Thailand as from India, it would be great. Thailand could service Tata Technologies, India, and other clients, besides specialising in certain areas of automotive engineering and design," he adds.

Mr McGoldrick does not view the shortage of qualified engineers as a hurdle. He was confident that the company would be able to recruit good people from the large number of fresh engineering graduates, though the task has not been easy. Tata Technologies had to sell India and the Tata brand name to wide-eyed youngsters whose dreams of success included only big Japanese names like Toyota and Honda. That the company succeeded in not only recruiting 30 Thai students but also in encouraging them to do billable work is a tribute to Mr McGoldrick's vision.

The selection process for the prospective recruits was extremely stringent. A written test was followed by interviews which, considering  the level of the students' spoken English then, had to be conducted in Thai. "It was very difficult for us to assess their capability from a verbal interview," says Mr McGoldrick. Based on the test results and recommendations of the professors, and on sheer gut feeling, the company managed to select the best of the candidates; proof that it has laid its hands on a good thing.

The new recruits were trained at the company's Pune premises. The 100-day course took them through the fundamentals of computer-aided design and analysis and the engineering concepts that would form the basis of their work, besides a working knowledge of spoken English. Asha Naik, HR head, says, "We had to acquaint them with business-level communication. We focused on vocabulary building, linguistics, accent reduction and grammar. We also taught them software like Catia V5 and Pro/ENGINEER." The students were quick learners and it wasn't long before Mr McGoldrick felt justified about the bold new experiment he had undertaken.

Of course, there were surprises along the way. Some of the students asked to get into marketing functions, a request that the company regarded positively. Some wanted to work in India, while others wanted to know if they would have opportunities to work overseas.

The youngsters, first-generation engineers all, with no more knowledge of India than its fabled IT prowess, the Taj Mahal, and the briefest acquaintance with the name Tata, got a taste of what it would be like to be a part of India's largest and finest business conglomerate.

Fully trained, the students were ready to see their country transform itself from a market for Tata Technologies' services to a delivery centre.
Pleased with his success so far, Mr McGoldrick is already thinking bigger. "If this works, there is nothing to stop us from growing this into a significantly larger centre in three years", he says. "If you want to climb a mountain," he adds, echoing an old Japanese saying, "you must do it step by step."

He plans to recruit people and put them through the same training that the first batch underwent. It is intended to become a regular feature as the business grows. Tata Technologies has tie-ups with Thai universities. On a recent visit to India, professors from these universities got an opportunity to see the training their students were being put through. These modules will soon be incorporated in the course curriculum, reducing the overall training period for the company.

Mr McGoldrick is quick to admit that jobs with auto companies are far from scarce in Thailand's opportunity-filled atmosphere. But what Tata Technologies offers these young men and women is the satisfaction of being at the forefront of an endeavour that will go a long way towards raising the level of the Thai industry.

The risk of losing good people in whom it has invested so much is not one that Tata Technologies is taking lightly. Ms Naik says, "We include them in our ESOPs (Employee Stock Ownership Plan) since they are the first to start in a new venture. We also have tie-ups with the Asian Institute of Technology, the University of Michigan, and others. The students can use these distance learning opportunities to get their postgraduate degree while working, without going through any pre-qualifier for admission."

The new subsidiary, Tata Technologies hopes, will prop up the local automotive industry. "There are two sides to this," says Mr McGoldrick. "One is helping them do more complex engineering and design work in Thailand. Since Thailand has been most successful at automotive manufacturing, what is primarily done here is production engineering. Tooling companies have had to have more complex designs done outside the country since they don't have the capability locally. The volume of complex work is not enough to have a dedicated workforce to do it. If we deploy some of our capacity to support them, it would be cost effective and they would be able to do more complex designs. The other side is manufacturing. We are already working for General Motors and others using information technology to improve the manufacturing process. We could certainly extend this to other automotive companies in Thailand."

The business structure entails an integration of INCAT, Tata Technologies' recent acquisition, with the Thailand operation. Work will flow from INCAT customers to INCAT and then into Thailand. Describing it as a 'right shoring' business, Mr McGoldrick says, "For certain engineering activities it will allow us to give a more competitive price point to the customer at a better profit margin".

Mr McGoldrick has clear ideas about the intentions behind the exercise. He says, "It is the Tata way of doing business, by giving and being a part of the community. We are not taking out of the country. We are developing an industry and raising it higher."

Uploaded on March 29, 2006