To restructure the organisation, finances
C. K. Birla-promoted Hindustan Motors has declared a work suspension at its main plant at Uttarpara near here. The beleagured company said that it felt that the work suspension would enable the company to restrict its mounting liabilities and restructure the organisation and its finances and create a conducive situation for reopening the plant.
In a statement to the stock exchanges, it said that the company had shared updates about the worsening condition at the Uttarpara plant which included growing indiscipline, critical funds shortage and lack of demand for core product — the Ambassador car — as well as large accumulation of liabilities.
On March 31, 2014, the company had announced its plans to hand over the Chennai car unit to a group subsidiary with an aim to either sell the unit or enter into a strategic alliance that would improve the group’s liquidity position. It had followed up that action, with a recast of its top management earlier this month, replacing its managing director (who was made an additional director) with an old hand while also making some other key changes. It also said that it would hire an external consultant “to get a perspective of the challenges and possible solutions for the Uttarpara plant.”
Employees of the Uttarpara plant would not be paid salary during the suspension of work period, sources said.