Without doing too much, Hindustan Motors posts another loss

Aditya · 5th November 2015, 10:30

Hindustan Motors, India's oldest carmaker, has posted a net loss of Rs. 11.25 crore for the period April-September 2015.

In May 2014, Hindustan Motors suspended production of the Ambassador car at its Uttarpara plant. The company had declared itself a sick unit to the Board for Industrial and Financial Reconstruction (BIFR).

The company cited worsening conditions at the plant including very low productivity, growing indiscipline, critical shortage of funds, lack of demand for the Ambassador and large accumulation of liabilities for stoppage of production.

For the year 2014-15, the company recorded a loss of Rs. 41.90 crore. While it had accumulated losses of Rs. 201.01 crore till March 31, 2015, it had a share capital of Rs. 104.41 crore. The company’s current liabilities exceeded the current assets by Rs. 73.66 crore.

Hindustan Motors also went on to declare lay-offs at its Pithampur plant later in the year.

In a note to the accounts, Hindustan Motors has said "These condition indicate the existence of material uncertainty about the company's ability to continue as a going concern."

Source: Business Line

girimajiananth · 5th November 2015, 10:48

I thought the plant was already shut for good. Do they still assemble Mitsubhishi cars ? They can make use of the infrastructure and probably assemble some good bikes like Ducati or Bennelli , cant they ?

2000rpm · 5th November 2015, 10:55

With the IR (Industrial Relations) issues reported like very low productivity, growing indiscipline, it will be very difficult to convince an MNC to produce high premium products in this facility.

KiloAlpha · 5th November 2015, 11:34

I am very surprised to see this. Don't the general accounting principles state that balance sheet/P&L is prepared for a "going concern"? HM does not qualify as a "going concern" any more (it is a gone case

), so why are they posting financials?

hangover · 5th November 2015, 12:37

I thought their Trekkers were quite cool. An uncle of mine had it. This uncle had the uncanny knack of buying the vehicles guaranteed to fail. So he had a Trekker, a conti 1.8, a Premier 118NE, an Opel Vectra and an Opel Corsa.

All brilliant in one way but flawed in so many others. Kinda like the DeLorean of India.

I feel they could assemble Hyundai cars for a while. Workers would be happy if there was plenty of work really. Anything is better than shutting shop. I know many people who worked in (now) BIFR units.

They're still going to courts and labor tribunals trying to get some settlement.

The Bengal unit has some fond memories for me. Our class visited it as part of our study tour in engineering. I fell in love with Kolkatta at that time. I don't know why. It seemed romantic. I never noticed the dirt around. And I know it wasn't the food. I'm a pucca boiled rice and sea fish eater. I don't like sweets either. Something else. It's hard to explain. Maybe a Bengali will explain better.

GTO · 18th May 2016, 15:10

Unsurprisingly, HM CEO resigns - Full News Article

Quote:

Chief Executive Officer of the company has resigned from his services with effect from the close of business hours on May 13, 2016.

hybridpetrol · 18th May 2016, 16:03

Quote:

Originally Posted by Aditya

The company cited worsening conditions at the plant including very low productivity, growing indiscipline, critical shortage of funds, lack of demand for the Ambassador and large accumulation of liabilities for stoppage of production.

Source: Business Line

Quote:

Originally Posted by GTO

Unsurprisingly, HM CEO resigns - Full News Article

Yes, there is no surprise in that. Which company would cite low productivity, indiscipline for their products as reasons for their losses!
Hope the new CEO turns things over, and addresses the basic issues at the plant first, while also pumping in some R&D funds to get new products rolling out of the factories.

timuseravan · 19th May 2016, 08:46

Hindustan Motors on their own cannot survive. Someone (like say Mahindra) should buy HM and position Ambassador and Contessa as more premium and luxurious cars. Ambassador was always fantastic for interior comfort. Just imagine it with modern up to date interiors and XUV mHawk engine and gear train. Similar with Contessa.

Dry Ice · 19th May 2016, 10:51

Quote:

Originally Posted by timuseravan

Hindustan Motors on their own cannot survive. Someone (like say Mahindra) should buy HM and position Ambassador and Contessa as more premium and luxurious cars. Ambassador was always fantastic for interior comfort. Just imagine it with modern up to date interiors and XUV mHawk engine and gear train. Similar with Contessa.

And what happens when the Global NCAP tests it and awards a glorious 0.

Unless they design some contemporary products, there is no point in flogging a dead horse. These cars may have been luxurious/comfortable at a time, but now there are 100s of options.

msdivy · 19th May 2016, 10:59

Quote:

Originally Posted by timuseravan

Hindustan Motors on their own cannot survive. Someone (like say Mahindra) should buy HM and position Ambassador and Contessa as more premium and luxurious cars. Ambassador was always fantastic for interior comfort. Just imagine it with modern up to date interiors and XUV mHawk engine and gear train. Similar with Contessa.

Amby is 50s design while Contessa is from 70s design. The world has moved on since those times. How will a 50 year old design meet current needs and survive in the market?

Sommos · 19th May 2016, 11:53

Quote:

Originally Posted by KiloAlpha

I am very surprised to see this. Don't the general accounting principles state that balance sheet/P&L is prepared for a "going concern"? HM does not qualify as a "going concern" any more (it is a gone case

), so why are they posting financials?

It is still a going concern, the latest status at BIFR is as follows :-

Without doing too much, Hindustan Motors posts another loss-hm.jpg

On receipt of reference from the Company, BIFR will inquire and determine that whether applicant is sick industrial company or not and after such determination, it may appoint operating agency(e.g. panel of banks, public financial institutions) to come up with Draft Rehabilitation Scheme as prepared in consultation with the Sick Industrial Company for the purpose of revival and rehabilitation of such company or it may ask for winding up of Sick Industrial Company if its not possible to revive the company.

The HM case is still in the first stage, BIFR is in the process of determination whether HM is a sick company and if so, then how sick?

Meanwhile BIFR has issued an order on HM restricting sale of any assets without prior approval.

lamborghini · 19th May 2016, 13:41

It is sad that a company that once had a strong grip on the Indian Automotive scene, right up until 2003-04 (including the Lancer days), is in such turmoil simply because they refused to adapt to changing customer needs & market scenarios.

With their association with Mitsubishi, they had access to fantastic technology, products, and a respected brand. Today, both Mitsubishi and HM are scoffed at by majority of buyers.

Personally though - I believe they can still turnaround their operations. They have losses, but most companies in India have faced trouble waters. Question is - do they have the will to change themselves, and bring about change in their operations.

n.devdath · 19th May 2016, 13:54

All hopes of the Amby and the Conty being revived are just pipe dreams. In fact, Hindustan Motors is now called HMFCL (Hindustan Motors Finance Corporation Limited) and owns just the Chennai plant and assembles the Pajero Sport and used to assemble the Isuzu D-Max and the MU-7 as well.

Now, with Isuzu moving out to its own plant at Andhra Pradesh, they are left with a 200 unit per month volume in a plant that can support 1500units per month.

5th November 2015, 10:30	#1
Aditya Team-BHP Support Join Date: Feb 2004 Location: Mumbai Posts: 17,841 Thanked: 77,073 Times View My Garage	Without doing too much, Hindustan Motors posts another loss Hindustan Motors, India's oldest carmaker, has posted a net loss of Rs. 11.25 crore for the period April-September 2015. In May 2014, Hindustan Motors suspended production of the Ambassador car at its Uttarpara plant. The company had declared itself a sick unit to the Board for Industrial and Financial Reconstruction (BIFR). The company cited worsening conditions at the plant including very low productivity, growing indiscipline, critical shortage of funds, lack of demand for the Ambassador and large accumulation of liabilities for stoppage of production. For the year 2014-15, the company recorded a loss of Rs. 41.90 crore. While it had accumulated losses of Rs. 201.01 crore till March 31, 2015, it had a share capital of Rs. 104.41 crore. The company’s current liabilities exceeded the current assets by Rs. 73.66 crore. Hindustan Motors also went on to declare lay-offs at its Pithampur plant later in the year. In a note to the accounts, Hindustan Motors has said "These condition indicate the existence of material uncertainty about the company's ability to continue as a going concern." Source: Business Line
	(5) Thanks

5th November 2015, 10:48	#2
girimajiananth BHPian Join Date: Oct 2012 Location: Bangalore Posts: 648 Thanked: 668 Times	Re: Without doing too much, Hindustan Motors posts another loss I thought the plant was already shut for good. Do they still assemble Mitsubhishi cars ? They can make use of the infrastructure and probably assemble some good bikes like Ducati or Bennelli , cant they ?
	() Thanks

5th November 2015, 10:55	#3
2000rpm Senior - BHPian Join Date: May 2013 Location: Mumbai Posts: 1,517 Thanked: 6,050 Times	Re: Without doing too much, Hindustan Motors posts another loss With the IR (Industrial Relations) issues reported like very low productivity, growing indiscipline, it will be very difficult to convince an MNC to produce high premium products in this facility.
	(1) Thanks

5th November 2015, 11:34	#4
KiloAlpha Senior - BHPian Join Date: Mar 2010 Location: Cubicle Posts: 1,605 Thanked: 3,002 Times	Re: Without doing too much, Hindustan Motors posts another loss I am very surprised to see this. Don't the general accounting principles state that balance sheet/P&L is prepared for a "going concern"? HM does not qualify as a "going concern" any more (it is a gone case ), so why are they posting financials?
	() Thanks

5th November 2015, 12:37	#5
hangover BANNED Join Date: Dec 2014 Location: bangalore Posts: 329 Thanked: 477 Times	Re: Without doing too much, Hindustan Motors posts another loss I thought their Trekkers were quite cool. An uncle of mine had it. This uncle had the uncanny knack of buying the vehicles guaranteed to fail. So he had a Trekker, a conti 1.8, a Premier 118NE, an Opel Vectra and an Opel Corsa. All brilliant in one way but flawed in so many others. Kinda like the DeLorean of India. I feel they could assemble Hyundai cars for a while. Workers would be happy if there was plenty of work really. Anything is better than shutting shop. I know many people who worked in (now) BIFR units. They're still going to courts and labor tribunals trying to get some settlement. The Bengal unit has some fond memories for me. Our class visited it as part of our study tour in engineering. I fell in love with Kolkatta at that time. I don't know why. It seemed romantic. I never noticed the dirt around. And I know it wasn't the food. I'm a pucca boiled rice and sea fish eater. I don't like sweets either. Something else. It's hard to explain. Maybe a Bengali will explain better. Last edited by hangover : 5th November 2015 at 12:50.
	(6) Thanks

19th May 2016, 08:46	#8
timuseravan BHPian Join Date: Feb 2016 Location: Pune Posts: 610 Thanked: 1,041 Times	Re: Without doing too much, Hindustan Motors posts another loss Hindustan Motors on their own cannot survive. Someone (like say Mahindra) should buy HM and position Ambassador and Contessa as more premium and luxurious cars. Ambassador was always fantastic for interior comfort. Just imagine it with modern up to date interiors and XUV mHawk engine and gear train. Similar with Contessa.
	() Thanks

19th May 2016, 13:41	#12
lamborghini Distinguished - BHPian Join Date: Apr 2004 Location: Mumbai Posts: 6,113 Thanked: 5,760 Times View My Garage	Re: Without doing too much, Hindustan Motors posts another loss It is sad that a company that once had a strong grip on the Indian Automotive scene, right up until 2003-04 (including the Lancer days), is in such turmoil simply because they refused to adapt to changing customer needs & market scenarios. With their association with Mitsubishi, they had access to fantastic technology, products, and a respected brand. Today, both Mitsubishi and HM are scoffed at by majority of buyers. Personally though - I believe they can still turnaround their operations. They have losses, but most companies in India have faced trouble waters. Question is - do they have the will to change themselves, and bring about change in their operations. Last edited by lamborghini : 19th May 2016 at 13:42.
	() Thanks

19th May 2016, 13:54	#13
n.devdath BANNED Join Date: Jun 2009 Location: Bangalore Posts: 4,287 Thanked: 2,811 Times	Re: Without doing too much, Hindustan Motors posts another loss All hopes of the Amby and the Conty being revived are just pipe dreams. In fact, Hindustan Motors is now called HMFCL (Hindustan Motors Finance Corporation Limited) and owns just the Chennai plant and assembles the Pajero Sport and used to assemble the Isuzu D-Max and the MU-7 as well. Now, with Isuzu moving out to its own plant at Andhra Pradesh, they are left with a 200 unit per month volume in a plant that can support 1500units per month.
	() Thanks