| FROM THE PRESIDENT’S
DESK
 |
Dear Member,
The year 2000 has been a period
of intense debate on the Auto Policy. We, ofcourse,
continue our internal agenda of building international
competitiveness within our industry.
I believe another important topic, which will
engage our attention in the next few years, is
Mergers and Acquisitions (M&A).
We have already seen the mega mergers and alliances
between auto |
majors across the globe.M & As are, also, taking place
in the auto component industry. They are driven mostly
by economies of scale, synergy in functional areas, growth
ambitions, etc. The obvious result is, ofcourse, increase
in the size of the new organization. This in turn enables
the company to negotiate with customers and suppliers
from a position of strength. It also dictates the ability
of the company to invest in R & D. We
must, however, remember the process of an M & A
is not all smooth and easy, particularly, if it is driven
largely by ambition to grow in size. Cultural issues
must be addressed with care; people related areas must
be dealt with sensitivity. In a large organization decision-making
is the first causality as, also, open communication
with employees. Top line growth is often achieved at
the cost of he bottom line.
For an M&A to succeed the partners must work for
it; transparency in all transaction and maturity to
keep the long term in perspective are imperatives.
What would be the trends in India?
Will restructuring and M&As on similar lines happen
in our industry?
Are there any lessons to be learnt by studying these
phenomena in the rest of the world?
I leave these thoughts with you and would appreciate
your feedback on the subject.
L Ganesh
President |
