Ailing HMT to be recast, 2,900 watchmakers may lose jobs

Bengaluru, September 2

Time is ticking away for thousands of employees of the ailing state-run HMT, formerly Hindustan Machine Tools, as they face uncertain future due to an imminent closure of some of its loss-making watch subsidiaries despite talks of a golden handshake.

Known once as "Timekeeper of the Nation", it is set to lay off 2,900 employees, including 1,091 from its twin-watch units and a bearing factory, to turn around its fortunes with 1,600 blue collar workers.

"As we plan to retain about 1,600 employees in other two subsidiaries after closing the three subsidiaries, we will soon offer an attractive Voluntary Retirement Scheme (VRS) to 2,900 of the total 4,500 workforce," HMT group chairman S. Girish Kumar said.

"Post-restructuring, we plan to have nine verticals, including machine tools, bio-medical equipment, tractors and watches in small quantity," Kumar said.

With the Narendra Modi government deciding in December to shut down the three loss-making subsidiaries and merge the remaining two into a holding firm, a one-time VRS, estimated at around Rs 25-55 lakh for each employee, is being worked out.

But PS Chandrasekhar, president of the HMT Head Office Employees Association, is livid.

The three subsidiaries — HMT Watches in Bengaluru, HMT Chinar Watches at Ranibagh in Uttarakhand and HMT Bearings at Hyderabad in Telangana — are saddled with 1,091 employees, who have not been paid salaries over the past 17 months or since April 2014.

The watch subsidiary, with 1,004 employees, has two factories in Bengaluru, one at Tumkur, 70 km from here, and another at Ranibagh. The Chinar unit, with 31 employees, has a defunct factory at Srinagar in Kashmir and an assembly unit at Jammu, while the Bearing arm has 56 employees.

The other two subsidiaries — HMT Machine Tools and HMT International — will be restructured to support the government's "Make in India" flagship programme by rolling out more products and generating more employment, officials said.

The machine tools subsidiary, which also makes tractors, has five factories in Bengaluru, two each at Kalamassery in Kerala and Hyderabad, and one each at Ajmer in Rajasthan, at Pinjore in Haryana and at Mohali in Punjab.

The only profit-making HMT International arm was set up here in 1974 to export manufactured goods and offer consultancy in engineering and technical services from concept to commissioning on a turnkey basis.

"The restructuring exercise will also span our business portfolio, marketing and finance to turn competitive and profitable again," Kumar said.

The watch subsidiary, which was churning out a whopping two million quartz and analog watches yearly till the 1990s, had an accumulated loss of Rs 2,252 crore and total liability of Rs 2,308 crore till fiscal 2012-14.

The holding company (HMT Ltd) and its international arm, however, reported a profit of Rs 87 crore and Rs 4.5 crore, while four other arms posted a combined loss of Rs 352 crore in fiscal 2013-14.

As the company has a whopping 1,400 acres of prime lands in states where it has plants, it is approaching the ministry to clear all long-term liabilities by monetising the surplus ones and return those it leased from state governments. IANS