What happens next for the 3,670 employees affected by the impending insolvency of the motorcycle manufacturer KTM and two subsidiaries? They are worried about their jobs, and from Monday there will be company meetings with experts from the Chamber of Labor.
KTM no longer pays the salaries and wages for November as well as the Christmas bonus. Until the restructuring process is opened, it is not legally possible for KTM to pay this out, says spokesman Hans Lang. There is no comment on whether this will benefit the ailing company.
More on the topic
Business KTM: From bankruptcy in 1991 to bankruptcy in 2024
The insolvency remuneration fund will step in and the employees will get the money from there. According to the Chamber of Labor, the processing will take at least a month. So the Christmas bonus comes after Christmas.
Criticism of the union
Wolfgang Gerstmayr, managing director of the GPA union, emphasized on Wednesday that the fund is financed from additional wage costs and criticized: “KTM boss Stefan Pierer, of all people, has repeatedly raised the mood against additional wage costs in the past. Now the public sector should step in for his company , although serious management errors are most likely responsible for this situation.”
Things are different when it comes to December wages and salaries. KTM will pay this again – not at the end of December, but next week, i.e. in the first week of December. The aim is to “soften hardship cases,” says Lang.
From January onwards, wages and salaries should be paid as normal or to the extent of the 30 hours to which working hours are reduced (internal short-time work). As reported, up to 300 additional jobs are to be cut. What other measures are to be taken will ultimately be included in the restructuring plan, which KTM must agree on with the creditors within 90 days.
Critical voices accuse KTM of having paid out a dividend in April. It was 50 cents per share. The year before it was two euros. The payout ratio fell from around 40 to 21 percent. Lang defends the dividend: “It was paid out for the past financial year and was significantly reduced despite the record year of 2023 because it was foreseeable that 2024 would be more demanding.” However, the slump in sales of this magnitude was not to be expected.
When asked how much of the bankruptcy was due to adverse circumstances and how much was due to management errors, Lang said: “A lot has been done right in recent years, but not everything.” He points to external factors: personnel costs have increased by 125 million euros within three years. “And this for a company that has a 96 percent export quota.”
What is KTM’s proposed plan for employee salaries starting in January?
## Interview with an Expert on KTM Insolvency
**Interviewer:** We are speaking today with [Guest Name], expert on [Guest Expertise], regarding the recent news that KTM, the motorcycle manufacturer, has filed for insolvency. Can you give our viewers a brief overview of the situation?
**Guest:** Certainly. KTM AG and its subsidiaries have filed for insolvency. This means they are unable to pay their immediate debts and are seeking legal protection to restructure their finances.
**Interviewer:** This news has understandably caused worry amongst the 3,670 employees at KTM and its subsidiaries. What can you tell us about the immediate impact on them?
**Guest:** It’s a very stressful time for KTM employees. As a result of the insolvency filing, KTM cannot legally pay November salaries and bonuses. This is leaving many workers concerned about their financial stability, especially as Christmas approaches.
**Interviewer:** Are there any measures being taken to ensure these workers receive their due wages?
**Guest:** Yes, the insolvency remuneration fund will step in to pay the delayed wages and bonuses. This process, unfortunately, takes time – at least a month according to the Chamber of Labor. So, it’s unlikely employees will receive their November compensation before Christmas.
**Interviewer:** However, KTM will ensure December wages are paid, correct?
**Guest:** That’s right. KTM has stated that December salaries will be paid in the first week of December. This is intended to alleviate some hardship for employees.
**Interviewer:** Going forward, what can workers expect in terms of employment and salary?
**Guest:** Starting in January, KTM aims to pay salaries as normal, or at least up to 30 hours of work per week, as a result of internal short-time work. They have unfortunately announced the potential loss of up to 300 additional jobs. The details of further restructuring measures will be revealed during the 90-day period KTM has to agree on a recovery plan with its creditors.
**Interviewer:** There’s been some criticism regarding KTM paying out a dividend in April, amidst these financial difficulties. Can you elaborate on this?
**Guest:** Yes, a dividend of 50 cents per share was paid out in April, after a much larger dividend the previous year. Some argue this showcases mismanagement, especially given the company’s struggles. KTM spokesperson, Hans Lang, defends this decision, stating it was based on the previous financial year’s performance and that the reduction in the dividend was due to foresight of a challenging 2024. However, the current downfall in sales was certainly not anticipated.
**Interviewer:** It seems there are many factors contributing to this situation. In your opinion, how much responsibility lies with external factors versus internal management decisions?
**Guest:** It’s a complex situation. While KTM cites external factors such as the significant increase in personnel costs, it’s clear internal decisions, including the dividend payout, have also played a role. Determining the exact percentage of responsibility for each factor is difficult, but it’s likely a combination of both.
**Interviewer:** Thank you for sharing your insights on this challenging situation. It’s clear this is a difficult time for everyone involved with KTM.
**Guest:** Thank you for having me. Hopefully, the restructuring process will provide a positive outcome for both the company and its employees.
