Hindustan Motors- Sick or Dead

Technically Hindustan Motors (HM) is going to BIFR now, as its liabilities have exceeded assets and net worth has become negative. The BIFR has become a mandatory requirement. However, HM has been sick for many years. Perhaps, with the death of BM Birla, one of the pioneers of automobile manufacturing in India and effective takeover of the management by his only grandson CK Birla, the last hope of its survival was dead. The impending end process of HM is typical of a family managed company.

Ashok Desai, Consultant Editor of ‘Businessworld’ has written his column on Hindustan Motors, ‘Steering Into A Dead’ in last week’s issue: ‘If Hindustan Motors continues business as usual, it cannot last more than 5 or 6 years; that is the outer limit’. I think Mr. Desai has not seen HM from nearer quarter. It’s only, perhaps, in India that a company as big as HM survives for so long even with paying dividend to its shareholders only few times so long. I don’t know how the promoters (as the people know them as owners) get the returns on its investment. It must be through unscrupulous means.

I could see the beginning of the end of HM even when I was working on the Mitsubishi projects, that later on came up in Chennai. CK Birla was never serious for remaining in auto business as a leading player with coming competitions after early 80s- Maruti Suzuki, Daewoo, and then Hyundai. HM could have got a very good mini-car in Mitsubishi Minica, that HM also displayed in the Auto expo that year.

With a very good auto part manufacturing at Pithampur near Indore backed by facilities at Hind Motor near Kolkata, HM could have also become a major auto part manufacturer. Mitsubishi tie up would have helped. There were other possibilities too with a great manufacturing facility. But CK Birla had decided to make retreat and go out. He made all that it (or he) could make by selling all the plant and machinery from the Hind Motor plant and as I hear by selling the huge land of the company that the West Bengal government of Dr. BC Roy would have given to HM almost free.

Those who worked for it and put their best of labour and mind in the initial years and brought to a respectable level are bound to feel bad. For many years I worked for the company thinking that I am serving the nation by remaining professionally dedicated. I now realize that that was the biggest of my mistakes in life. I would have moved to other organizations including Tata Motors, where I had conducted many a training courses on technology and management for its technical officers. I am sure I would have contributed and could have been recognized better.

But it’s perhaps my destiny. I still feel bad reading Mr. Desai’s column. HM is dead with no hope of revival. Let us not be morose. I can only write a good obituary. I still remember Late Mr. GC Bansal, the IITian of the first batch and an excellent engineer and my boss for many years, asking me to write about HM once something like ‘HM on a Sunny Day’ on the line of a similar book on GM. Interestingly, that GM is also having the same fate. It’s Obama’s aid that is keeping it going.

HM was a great company at one time and will certainly have place in the history of auto manufacturing in India. Once TELCO (Tata Motors) of those days used to envy HM and sometimes was scared of it. But the professional management of Tatas excelled ultimately and today Tata Motors that got a big boost with initiation of Ratan Tata in it is going to a global Indian company in auto manufacturing. On the other hand, Mr. Birla failed to engage the right people to run HM and to allow the autonomy to the professionals to make it succeed.

Bad Luck HM and those who still remember its golden era! But why should there be any malice? ‘They also serve who stand and wait’.

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