THERE are reports that the HMT Watches is all set to be closed very soon and the 1,105 odd employees at the company’s three factories and corporate head office are seeing red as they will no longer be “keeping time to the nation”.
The department of heavy...industry under the ministry of heavy industries and public enterprises is reported to have decided to wind down the company, 53 years after it started ticking.
Once HMT used to be a household name and watches were coterminous with HMT but that was a different story. Time changed for the nation's watchmaker.
The manufacture of HMT, the once-iconic watch brand, will soon be stopped at Bangalore and Tumkur in Karnataka and Ranibag in Uttarakhand, which together have a 200-acre land parcel. Half of HMT’s workforce is in, Ranibag, while the rest is in Tumkur, Bangalore and other sales offices.
“I have no official communication from the ministry on closure of the company. It was decided some time ago to downsize manpower from the present level of over 1,000. I have no information on shutting down the company,” S Girishkumar, chairman and managing director, HMT Limited was quoted as saying in a daily.
The department of heavy industry under the Ministry of Heavy Industries and Public Enterprises is reported to have decided to wind down the company, 53 years after it started ticking.
It used to be a prize gift, a best wedding gift from a father to his daughter.
But time's up for the iconic brand that was launched in 1961 as part of the government's efforts to build a modern India.
Like the Ambassador, another national brand of the bygone era, its clock has finally wound down.
Following mounting losses for more than a decade, the government is set to shut down HMT Watches, which was restructured in 1999 to stop the HMT companies from bleeding.
During 2012-13, the latest period for which data is available, the ailing public sector company had losses of Rs 242 crore on revenues of Rs 11 crore. Data in the government Public Enterprises Survey shows, the company employed 1,105, which included 181 executives.
HMT was virtually enjoying monopoly since it set up the country's first watch manufacturing unit in Bangalore in 1961 in collaboration with Citizen Watch Co.
If the automatic quartz watches once gave it huge popularity, the same quartz watches that proved to be its undoing along with the entry of several new players in the 1980s.
New designs and techniques were absorbed by the likes of Titan and other private players that alluded the iconic watchmaker. It was also due to slow pace of decision making due to red-tapism.
Several bids to boost the PSU's performance including capital infusion failed.
During UPA government's term, HMT Watches was referred to the Board for Reconstruction of Public Sector Enterprises, which recommended revival. While the UPA refrained from deciding on the issue, the BJP government decided to go ahead with a tough decision.
For the year 2013-14, HMT Watches reported sales of Rs 7.48 crore and production of Rs 4.70 crore. Net losses stood at Rs 233.08 crore compared to Rs 242.47 crore in the previous year. A paucity of working capital, erosion of trade channels and high cost of borrowings, and an annual wage bill of Rs 35-40 crore, ensured that HMT would slowly bleed to death.
HMT Watches, a subsidiary of HMT Limited was established in 1961 at Bangalore. During the zenith of its operations in 1991-92, it had over 8,000 employees and reported its highest-ever sales of around Rs 300 crore. Starting 1994, however, it started its slide, and despite a restructuring in 1999, never recovered from red territory. In 1986, the company faced another major setback when about 350 of its best engineers left for Titan Watches, a Tata company and the new kid on the block with sleeker designs and aspirational value.
A revival package for HMT Watches was in the offing, but based on the recommendations of Board for Reconstruction of Public Sector Enterprises (BRPSE), the government seems to have instead decided to shut down the iconic firm that at its peak boasted of more than 400 watch models in its portfolio.So time is fast running out for the nation's watchmaker and HMT is no longer “keeping time to the nation.”