Over 120 employees of Hindustan Machine Tools (HMT) in Tumakuru, who got their relieving letters after the company’s major watch manufacturing unit at Tumakuru shut down operations on Sunday.
As many as 179 employees, with less than five years of service left, had opted for the voluntary retirement scheme (VRS) in January this year. The remaining 121 employees, who had eight to nine years of service left, too opted for VRS.
General Secretary of Tumakuru HMT Employees’ Union, K N Sathyanarayana, was quoted by The Hindu as saying that all the employees got their relieving orders after they punched out at 5 p.m. on Saturday. He said that they were getting VRS benefits as per the 2007 pay scale, which is an advantage to the employees as they were being paid according to the 1992 pay scale.
The Union Government had already downed shutters on the PSU’s units in Bengaluru. The remaining units – in Jammu and Ranibagh – too shut shop along with the Tumakuru unit.
The HMT watch factory unit had once manufactured premier brands of wristwatches like Sangam, Utsav, Elegance and Pilot, among others. The closure is indicative of the sad state of affairs in PSUs today.
Employees have been left in the lurch with many claiming the VRS amount is pittance and that at their age, finding jobs and supporting families is going to be a tough ask.
The Clock Stops Ticking
- HMT Watches Ltd. was established in 1979 on 119 acres of land The unit generated 1600 jobs directly and another 400 jobs in its 20 ancillary units.
- It was established as a spin-off of Hindustan Machine Tools at the behest of former prime minister, Jawaharlal Nehru, in 1961. Nehru named the first watch Janata.
- HMT was a profit making company till 1993. The Tumakuru plant had a 2 million-unit capacity of its quartz range.
- The Tumakuru unit, with 326 employees, was the only factory which was functional of the four units of the once-flourishing public sector enterprise
- The factory once produced more than 20,000 watches per month. Towards the end, it was producing only around 4,000 watches.
- The watch model, Kanchan, used to sell at a premium in the grey market at Rs 1,000, when its legal price was Rs 700
- It had produced 3.95 crore watches, worth Rs 1,353 crore, from 1978 to 2013-14.
- Till 1991, HMT ruled the Indian watch market with almost 90 per cent market share for three decades, with the tagline of ‘Desh ki Dhadkan’.
- The company went into loss mode when production at its Srinagar factory stopped. It had to face working capital shortage as it had 500 employees to pay, without any production. The annual wage bill of the company stood at Rs 35-40 crore.
- The net losses for 2013-14 stood at Rs 233.08 crore, compared to Rs 242.47 crore the year before that.
- The paucity of working capital, erosion of trade channel and high cost of borrowings affected HMT.
- The final nail in HMT’s coffin was the opening of the economy to outside players in the late 90s. As the economy opened up, HMT’s complacency was laid bare. Imported watches and Indian watch-makers flooded the market from the nineties.