New Delhi/Bengaluru, Jan 6 (IANS): The government on Wednesday approved closure of three Hindustan Machine Tools (HMT) companies - HMT Watches, HMT Chinar Watches and HMT Bearings, ending the era of the once "Timekeeper of the Nation". Company veterans expressed sadness at the development.

"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 1,000 employees through attractive VRS/VSS and settlement of their dues," the Cabinet Committee on Economic Affairs (CCEA) said in a statement.

The employees will receive Voluntary Retirement Schemes (VRS) at 2007 payscales, while these companies' movable and immovable assets will be disposed of in line with government policy, it added.

It said of the 31 Central Public Sector Enterprises (CPSE) operating in manufacturing, consultancy and contracting services, only 12 are making profits while 19 are incurring losses and every one of the latter is appraised and assessed to check the feasibility of revival and return to profit. "...those found chronically sick are disinvested or closed down after payment of due compensation to employees."

Once known as the "Timekeeper of the Nation" and churning out a whopping two million quartz and analog watches yearly till the 1990s, it had accumulated a loss of Rs.2,252 crore and total liability of Rs.2,308 crore by 2013-14. It posted a stand-alone loss of Rs.24.25 crore in Q2 2015-16.

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

The Srinagar factory of the Chinar unit, with 31 employees, was defunct, and it had an assembly unit at Jammu, while the bearings arm has 56 employees.

The government had decided to close the loss-making subsidiaries in December 2014 and later merge the remaining - HMT Machine Tools and HMT International - for 'Make in India' programme.

"The government considers HMT as a strategic sector in view of its ambitious 'Make in India' initiative to attract global investments into the country, increase the manufacturing sector's contribution to the GDP and generate thousands of jobs," HMT group chairman S. Girish Kumar had told IANS in a September 2015 interview.

Admitting that the company had hired more employees than it required over the years, he said the company could not compete with lean and mean private firms like Titan, thriving in the liberalisation era since 1991.

However, recently-retired Veeranna Gowda has a different explanation. "This is typical contradiction of 'Make in India' and 'Close in India' of a highly respected brand name.

"All through if you see, it is not that Titan has affected us, our own internal weaknesses have really created problems. Not producing the product required by the market, it was not customer oriented, it was market oriented," said Gowda who retired as HMT's general public relations officer after clocking 39 years.

Recalling HMT's glorious days, he said: "People used to come to the Bangalore showroom at 5 p.m. and sleep through the night to purchase the watches next day - a quota of 100 or 200 watches, a day's production, available on first come first serve basis."

Terming the closure as a management failure, he said still there was still highly-skilled manpower.

In the past four years, 835 employees left the 62-year-old enterprise, availing liberal VRS package, based on the 2007 revised wages as against the 1992 pay-scale, on which salaries have been paid over the last two decades.

Many are okay with the latest shutting down development barring younger employees especially in the Ranibagh plant.

"By and large, particularly senior employees are welcoming it. Junior employees in a unit like Ranibagh are unhappy. But nothing to can be done, if the salaries are not paid for 17 to 18 months, it is some sort of a torture or trauma. This is better alternative instead of that," HMT Head Office Employees Association president P.S. Chandrasekhar told IANS.

HMT Watches still has 100 employees with 7-10 years of service left, 400-500 with five years and a few with less than two years.

In October 2015, during German Chancellor Angela Merkel's state visit, HMT was one of the five Indian companies which forged collaboration with German companies, inking an agreement with Fraunhofer in the field of machine tools.