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The proposal to wind up HMT Watches is likely to be finalised soon. The Bengaluru-based public sector undertaking is readying a voluntary retirement scheme (VRS) for its employees.
“There is no official communication from the government on the closure of the watch unit. We are, however, in the process of preparing the VRS package, which will be announced in a month’s time,” S Girish Kumar, chairman and managing director of HMT Ltd, told Business Standard.
Though he refused to elaborate, the company needs Rs 400 crore to offer VRS to 1,100 employees, according to sources close to the development.
HMT Watches has three units in Bengaluru and Tumakuru in Karnataka and Ranibag in Uttarakhand. The decision to wind up the company came after efforts to revive it failed. HMT Watches has been making losses for the last 15 years.
Minister for Heavy Industries Anant Geete announced the decision to close down HMT units in Parliament on Tuesday. The manufacturing of watches, which began in 1961, will cease once the VRS is accepted. “Employees have already given their undertaking for the voluntary retirement proposal subject to it being offered on the 2007 salary,” sources said.
Girish Kumar confirmed the company was working out the package on 2007 pay scales. Employees in HMT Watches have not received any hikes since 1992. They are paid once a quarter, according to sources. HMT Watches has a turnover of Rs 6-8 crore and its wage bill is Rs 40 crore annually. Accumulated losses are over Rs 2,500 crore. The last time HMT Watches made a profit was in 1991-92 on a turnover of Rs 280 crore, an employee who did not want to be named said. “Instead of closing down the unit by offering VRS, which costs Rs 400 crore, the company can be revived by infusing Rs 100 crore. The brand has a strong recall among buyers. It should be revived,” an employee of HMT Watches at its corporate office here said.
“We are sad to know the government, which is promoting ‘Make in India’, has decided to close down HMT, which is a jewel in the manufacturing sector,” workers at HMT Watches said.
