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Old 27th September 2013, 12:17   #1
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Default Hindustan Motors net worth wiped out. To report to BIFR

Read this on today's TOI Bangalore edition and I was sort of sad to know.

Source: http://economictimes.indiatimes.com/...w/23141567.cms
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Old 27th September 2013, 13:15   #2
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Default re: Hindustan Motors net worth wiped out. To report to BIFR

The thread title is misleading. A company cannot declare itself as a "sick" unit. In the instant case, HM is only in the process of reporting its pathetic financial condition to the BIFR.

BIFR will study the company's financial position and draw up a restructuring plan in consultation with industry experts. In extreme cases where the turnaround is virtually impossible, it may lead to liquidation of the company to settle its creditors and shareholders.

I am inclined to see it only as a positive move by HM. HM does not have the inhouse expertise to devise a effective turnaround strategy. The desperate attempts to regain its market share (thru' multiple facelifts/versions of the flagship model, Ambassador) has proved futile.

Now that the Government appointed expert panel will be looking into it, there's definitely some light at the end of the tunnel.

Here's what the MD, Mr. Bose has to say:

Quote:
"We have certain plans to make the net worth positive," said Uttam Bose, MD, Hindustan MotorsBSE -6.02 %. Among others, it is in the process of spinning off its lucrative Chennai plant into aseparate entity and has plans to unlock value of its land assets. The Chennai unit does contract manufacturing for auto giants such as Mitsubishi and Isuzu. It also intends to bring in foreign investment for its Chennai and West Bengal units. The company's misfortunes may not affect the Ambassador, at least for now.

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Old 27th September 2013, 15:43   #3
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Default Re: Hindustan Motors net worth wiped out. To report to BIFR

Older, related thread : Link (Hindustan Motors sinking? To report to the BIFR)
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Old 28th September 2013, 12:18   #4
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Default Re: Hindustan Motors net worth wiped out. To report to BIFR

What will be the impact of Mitsubishi on this? They are barely staying afloat in the Indian Market? I feel they should just ditch HM and break out on their own.

here is what Mr. Bose actually wanted to say.

"We always had plans to make the net worth positive" says Mr. Bose. "For example, we took a model called Pajero from Mitsubishi, which had a fantastic off-road heritage, put a wheezy under powered engine it , gave it a clown paint scheme and made a killing on it" You stupid customer tell me, who else can make 20 Lakhs of a platform whose capital costs have been amortized many decades ago???
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Old 28th September 2013, 17:51   #5
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Default Re: Hindustan Motors net worth wiped out. To report to BIFR

HM is a classic case of a company not adapting with times, that they are going the BIFR way has been coming for a long time. This is a company which consistently let go opportunities to revive itself by infusing fresh ideas and a fresh culture. While the labour union has a part to play here, IMO, the responsibility of the management is even more for being in the state HM is today. As long as the government procured Amby's for the babu's and HM maintained this by greasing palms, things pulled on. Now things have reached a pass where even this approach ( probably the only route they knew) has reached its obsolescence.
I recall times when Taxi operators would buy an Amby, have it stripped and the welding reinforced before putting these cars on road fortunately today even that segment has options and they just opted for that alternative.

An old family friend recalled a time when he had to bribe the HM dealership in calcutta the have a steering wheel fitted on the car allotted to him in the mid 70's after he had waited for 5 months to get his precious status symbol
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Old 28th September 2013, 18:59   #6
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Default Re: Hindustan Motors net worth wiped out. To report to BIFR

Well for a ccompany to come out of the red line. Firstly they should have the interest. Without that nothing is going to happen. If they had interest they would have launched new models ages ago. They could have exploited resources from mitsubishi wery well. But they didnt. Going with ambi dreams in this era is absolute foolishness. If they weren't so they wouldn't have come up with ridiculous models like the amby cs and the Hillarious pickup veer.
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Old 28th September 2013, 19:31   #7
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Maybe it's just a case of the company not willing to spend even a penny on R&D. And the just let it go as far as possible on a single model. Talk of missed opportunities no probably they just ignored every single opportunity that came their way intentionally.
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Old 28th September 2013, 22:24   #8
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Default Re: Hindustan Motors net worth wiped out. To report to BIFR

I would really love to meet the top management of HM and ask them what exactly was there thought process before coming out with those modern avatars of the good old Amby. I mean not a single person has anything good to say about it. Can these highly qualified (?) people see the same?
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