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Cabinet approves closure of three HMT companies | Canindia News

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Cabinet approves closure of three HMT companies

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CanIndia New Wire Service 0 comments

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New Delhi/Bengaluru, Jan 6 (IANS) The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved the closure of three Hindustan Machine Tools (HMT) companies — HMT Watches, HMT Chinar Watches and HMT Bearings.

“With a cash assistance of Rs.427.48 crore, the three loss making subsidiaries of HMT Ltd. namely HMT Watches Ltd., HMT Chinar Watches Ltd., HMT Bearings Ltd., will attain closure after separation of about a thousand employees through attractive VRS/VSS and settlement of their dues,” the CCEA said in a statement.

The employees will receive Voluntary Retirement Schemes (VRS) at 2007 payscales.

The movable and immovable assets of the three companies will be disposed of according to government policy, the statement added.

Of the 31 Central Public Sector Enterprises (CPSE) operating in manufacturing, consultancy and contracting services, only 12 are making profits while the remaining 19 are incurring losses.

Each and every loss making CPSE is appraised and assessed to check the feasibility of revival and return to profit by the department of heavy industries.

“As a part of this exercise, the loss making CPSEs having the potential of turnaround are revived and those found chronically sick are disinvested or closed down after payment of due compensation to employees,” the statement said.

State-run diversified manufacturing company HMT posted a stand-alone loss of Rs.24.25 crore in Q2 2015-16.

The watch subsidiary of HMT, with 1,004 employees, has two factories in Bengaluru, one at Tumkur, 70 km from Bengaluru, and another at Ranibagh.

The Chinar unit, with 31 employees, has a defunct factory at Srinagar in Kashmir and an assembly unit at Jammu, while the bearing arm has 56 employees.

In October 2015, during the German Chancellor Angela Merkel’s state visit to India, HMT was one of the five Indian companies which forged collaboration with German companies.

HMT inked an agreement with Fraunhofer in the field of machine tools.

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