Closure of 3 HMT companies: Key things you should know

Zee Media Bureau

The Narendra Modi government on Wednesday approved closure of three Hindustan Machine Tools (HMT) companies - HMT Watches, HMT Chinar Watches and HMT Bearings, ending the era of the once "Timekeeper of the Nation". Company veterans expressed sadness at the development.

Here are the key facts you should know about the closure of 3 HMT companies:

-With a cash assistance of Rs.427.48 crore, the three loss-making subsidiaries of HMT Ltd. namely HMT Watches Ltd, HMT Chinar Watches Ltd, HMT Bearings Ltd, will attain closure after separation of about a 1,000 employees through attractive VRS/VSS and settlement of their dues

-The employees will receive Voluntary Retirement Schemes (VRS) at 2007 pay scales, while these companies` movable and immovable assets will be disposed of in line with government policy, it added.

-Once known as the "Timekeeper of the Nation" and churning out a whopping two million quartz and analog watches yearly till the 1990s, it had accumulated a loss of Rs.2,252 crore and total liability of Rs.2,308 crore by 2013-14. It posted a stand-alone loss of Rs.24.25 crore in Q2 2015-16.

-HMT Watches with 1,004 employees, has two factories in Bengaluru, one at Tumkur, 70 km from Bengaluru, and another at Ranibagh.

-The Srinagar factory of the Chinar unit, with 31 employees, was defunct, and it had an assembly unit at Jammu, while the bearings arm has 56 employees.

-The government had decided to close the loss-making subsidiaries in December 2014 and later merge the remaining - HMT Machine Tools and HMT International - for `Make in India` programme.

-In the past four years, 835 employees left the 62-year-old enterprise, availing liberal VRS package, based on the 2007 revised wages as against the 1992 pay-scale, on which salaries have been paid over the last two decades.

-HMT Watches still has 100 employees with 7-10 years of service left, 400-500 with five years and a few with less than two years.

-In October 2015, during German Chancellor Angela Merkel`s state visit, HMT was one of the five Indian companies which forged collaboration with German companies, inking an agreement with Fraunhofer in the field of machine tools.

With Agency Inputs