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 are the immediate impacts of KTM’s insolvency filing on its employees?
## Interview: KTM Faces Insolvency
**Host:** Joining us today is Wolfgang Gerstmayr, the managing director of the GPA union, to discuss the recent news that motorcycle manufacturer KTM is entering insolvency proceedings. Wolfgang, thank you for being here.
**Gerstmayr:** Glad to be here. It’s a worrying situation for the 3,670 employees at KTM and its subsidiaries.
**Host:** Can you tell us more about the immediate impact on these workers?
**Gerstmayr:** They’re understandably concerned. Wages for November and the Christmas bonus won’t be paid until the restructuring process is underway. The insolvency remuneration fund will step in, but that takes time, possibly a month or more, meaning the Christmas bonus will be delayed.
**Host:** KTM says December’s salaries will be paid early next week….
**Gerstmayr:** It’s a small gesture, but it doesn’t erase the anxieties. What happens after? There’s talk of shortened work hours and potential job cuts, up to 300. This uncertainty is deeply affecting people’s lives.
**Host:** KTM has cited rising personnel costs as a contributing factor. What are your thoughts?
**Gerstmayr:** While external factors undoubtedly play a role, the dividend payout in April raises eyebrows. KTM boss Stefan Pierer has actively campaigned against additional wage costs in the past, yet the company distributed dividends.
**Host:** So the union sees this as mismanagement?
**Gerstmayr:** Many of us believe serious management errors contributed to this situation. It’s troubling that public funds will likely be used to prop up a company whose leadership may have made poor decisions.
**Host:** KTM acknowledges some mistakes, stating that they couldn’t predict the dramatic sales slump.
**Gerstmayr:** They say they had a record year in 2023 and were simply preparing for a tougher 2024. But the extent of this decline suggests deeper issues.
**Host:** Wolfgang, thank you for your
insights. We’ll continue to follow this story closely.
**Gerstmayr:** Thank you for having me.
