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Government decides to shut 3 HMT units

Government decides to shut 3 HMT units, offer VRS to employees 

The cabinet had given in principle approval for closing down five Karnataka state-run firms under the Heavy Industries Ministry which include three units of HMT, Tungabhadra Steel and Hindustan Cables.

The cabinet committee on economic affairs (CCEA) gave its goahead to a Rs 427-crore financial assistance package for closure of unviable units of HMT, including the watch manufacturing entity.

The CCEA has approved voluntary retirement scheme ( VRS) package at 2007 pay scales to mitigate the hardships being faced by the employees of HMT Watches Ltd, HMT Chinar Watches Ltd & HMT Bearings Ltd and to close their operations.

Why closure?

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.

it was the quartz watches that proved to be its undoing along with the entry of several new players in the 1980s, who brought in newer designs and more modern production techniques. HMT is said to have been hobbled by slow decision making, often associated with PSUs.

 As a result, several attempts to boost the company’s performance including capital infusion didn’t work.

What next?

Most of the 923 employees of HMT Watches Ltd. spread over its three units in Bengaluru and Tumakuru in Karnataka and Ranibagh in Uttarakhand are ready to accept the Voluntary Retirement Scheme (VRS) package offered and end their service to the watchmaker.

HMT Chinar Watches Ltd., the unit in Srinagar (Jammu and Kashmir), earlier part of HMT Watches Ltd., has about 40 employees they too are ready to accept the VRS package.

Of the four units, only Tumkur unit is still functional producing watches for institutional orders.

Hindustan Machine Tools Limited, is a state-owned manufacturing company under the Ministry of Heavy Industries and Public Enterprises in India.

The company manufactures tractors, watches under its watch division and industrial machines and tools mainly under its Praga division  .

It has a work force of 2,806 with manufacturing units located at Bangalore,Pinjore, Kalamassery, Hyderabad and Ajmer.

HMT  watches:

In the year 1961, HMT set up a watch manufacturing Unit at Bangalore in collaboration with M/s Citizen Watch Co., Japan. The first batch of Hand Wound Wrist Watches manufactured at this factory was released by the then Prime Minister of India, Jawaharlal Nehru.

HMT set up additional manufacturing facilities to produce watch components sets at Tumkur and Ranibagh in the year 1978 and 1985 respectively.

In September 2014, the Government Of India decided to shut down HMT operations in a phased manner.

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