Tata facing another land dispute for Nano factory
Tata's plans to build a new factory to manufacture its $2,500 Nano have hit a roadblock for the second time. Apparently they do things differently in India than they do here in the US. Here, local and state governments just hand over several hundred million dollars and some land and factories happen. In Indian, the locals apparently want to get paid for the land that gets turned over to big companies for their factories. After protests by farmers earlier this fall, led Tata to abandon plans to build the Nano at a new factory in West Bengal, the company announced a new site in Gujarat. However, the local populace there is now raising a stink as well. Tata will now start low-volume production of the Nano at an existing factory in Pantnagar while it tries to find a permanent solution. This probably means that Tata will be losing a significant amount of money on every Nano sold. It will now likely be at least a year or more before Tata gets any large volume Nano production going.
[Source: New York Times]
Reader Comments (Page 1 of 1)
ziv 10:58AM (12/28/2008)
Is Tata trying to stiff the farmers by paying off the big guys and ignoring the little guys, or are the farmers trying to shake down the company with the deep pockets? I have read about Tata repeatedly and it is hard to figure out what is going on. India could really use factories of this type...
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gorr 12:23PM (12/28/2008)
This is a privateer businessman attaked by the same folks that pay farmers and poor contries goverment to deforest their land. They just don't want any competition of any sort and use tax money collected here to corrupt the poors and agonized folks that live there.
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Sumeet 9:21AM (12/29/2008)
I typically am not in a habit of posting comments on the blogs but the two earlier comments prompted me to put in my 2 cents. The snide remark by Sam in the blog post that somehow Auto companies as a matter of policy exploit poor and mess with them out of spite is ignorant.
Secondly unlike in India where government hinders business activity, in US the businesses are welcomed in most US states because they bring in jobs, tax revenues, innovation, good tax paying citizens. To suggest that US states short change their citizens to attract businesses is also ridiculous.
What is happening in India is nothing but politics and the poor farmers are the pawns. It does not matter what TATA is paying the farmers for their land (probably over paying), but what TATA is not paying to the "socialist" politicians. All this will go away once TATA pays off the politicians or moves the production to China, the new capitalist El dorado.
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Sam Abuelsamid 9:46AM (12/29/2008)
Frankly, I don't think you have to look very far to find plenty of evidence of large corporations (of all kinds, not just automakers) exploiting the citizenry for the benefit of the company. It happens in the US, India, China and every other country.
I actually don't think it would be such a bad thing for farmers to get some financial benefit when the land they work is given to a corporation to build a factory. If you were a wealthy landowner and a company wanted to build a factory on part of your land, wouldn't you expect something in return? why should it be any different for small farmers?
As for the money that companies get for setting up factories in the US, I think citizens do end up paying a disproportionate amount for the number of jobs created. As much as $250,000 in tax breaks for every job created just doesn't sit right with me. It has become a bidding frenzy in recent years to see which state and city will pay the most for a factory. The factories will get built anyway, it seems wrong to be giving away so much.
Sumeet 3:32PM (12/29/2008)
Sam,
Thank you for your response. I think the best way to handle these situations is to let the companies negotiate privately for the land they need to acquire, be it India or US and not to get the governments involved. I am pretty sure the CEO of TATA does not wake up thinking that "let me find a way to screw farmers" he just wants to make cars. Politicians get involved because they see an opportunity for the graft and creating a ruckus, and then helping to solve the situation is a great way of getting that seat on the board, or that coveted dealership in a lucrative area.
Ask Maria Cantwell, Sen from State of WA, who got appointed the VP of Marketing at RealNetworks when she had no background in the field and cashed out millions in stock options.
Oh by the way, in the case of the first agitation against TATA (West Bengal), TATA had acquired the land privately and had already paid the farmers but the local communist govt declared that the deal was fraudulent and incited the farmers to keep both land and the money unless they get paid more.
TATA could have gone to courts but who wants to wait around for 2-3 decades to build a car factory, they ate the loss and went somewhere else.
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