HMT On Ventilator; Plug To Be Pulled Soon

The Hindustan Machine Tools Ltd (HMT), a brand that was synonymous with the new emerging India, will soon hit end of the road. After India’s own Ambassador car which stopped production after incurring heavy losses, India’s another benign brand that had reached the bylanes of its most rural areas.

The Hindustan Machine Tools Ltd, a state owned manufacturing company under the ministry of heavy industries and public enterprises in India manufactures tractors and watches under different divisions. Functioning since 1953, HMT started manufacturing watches from 1961 in association with Citizen Watch Company. Over a period of time, about 18 manufacturing units were set up.

With a workforce of nearly 3,000 people and four manufacturing units, HMT has run a long marathon. In a few days from now, the watches division will soon dole out its last lot of time keepers before the brand enters the pages of history.

Fall of HMT is being attributed to its decision to join the ‘quartz’ manufacturing race. While some of the top executives wanted to plan and create efficient pieces of time, the decision was not supported by the top management owing to heavy financial investment that sounded like a death knell. The crème of the top executives who would have nothing short of excellent pieces of quartz watches to be sold, decided to invest their energy and talent elsewhere. While it turned into a loss for HMT, some of the best minds joined TATAs. That was how the brand Titan gained from the ordeal. Today, Titan is the most premium brand and HMT has been cutting a sorry figure since 2000. Bad times started with heavy losses when the units struggled to even pay salaries to its employees.

HMT has been on ventilator ever since. And, nearly over a decade and half, HMT never showed any signs of picking up. Instead, the organisation began to acquire the attitude of a public sector unit, with low efficiency and no solid business plans to revive self. Losses didn’t turn into gains. In the recent past, losses of the company kept increasing from year after year. Though central government lent HMT Rs 694.52 crores in March 2012 to tide over a financial crisis, things didn’t turn positive for the company.

Reasons were many. Paucity of working capital, erosion of trade channel, incapacitated to catch up with the recent trends of consumers, high cost of borrowings – all came together to create a big bubble of loss for the brand.

While some units had negligible sales, some had incurred negative sales revenue that went beyond the investment in terms money. That perhaps was the last nail in the coffin.

The decision has been a tough one for the NDA government to close down a home grown brand over financial constraints. Recently though a business plan was submitted to the government, it was turned down as it didn’t have any viable factors that could help save the company.

HMT has not only turned into a dead wood, it has also turned into a pit of quick sand, which would simply consume everything that was pumped into it. The carcasses wouldn’t even be visible on the surface, and the pit was ready to consume more with time.

Having reached a point of no return, government finally took a decision based on the recommendation of Board for Reconstruction of Public Sector Enterprises.

Emotional as it may sound, HMT held the time on India’s wrist. Some of the masterpieces created by the company decades ago, still keep ticking with their proud owners. Only, HMT’s time didn’t tide over into good moments. Sadly, but surely, it is the end of an era.