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 the potential impact of KTM’s restructuring on its employees?
## Interview with Motorcycle Expert: KTM’s Restructuring
**Host:** Joining us today is [Guest Name], motorcycle industry expert and analyst. Welcome to the show.
**Guest:** Thank you for having me.
**Host:** We’re here to discuss the recent announcement that KTM, the Austrian motorcycle manufacturer, has filed for a restructuring process to avoid bankruptcy. What are your initial thoughts on this situation?
**Guest:** It’s certainly concerning news for KTM, its employees, and the wider motorcycle industry. The restructuring process is a sign of financial troubles within the company. While KTM had a record year in 2023, it’s been facing a significant drop in sales this year, possibly exacerbated by rising personnel costs.
**Host:** So, what are the implications of this for KTM’s employees? We understand they’re facing some uncertainty regarding their November salaries and Christmas bonuses.
**Guest:** Unfortunately, the situation is difficult for the 3,670 employees affected. They are understandably worried about their jobs and financial security. While KTM is delaying November’s salary payments, december salaries are expected to be paid next week. There will also be a reduction in working hours, and up to 300 jobs may be cut as part of the restructuring.
The insolvency remuneration fund will be stepping in to mitigate the impact on employees regarding November’s salary and the Christmas bonus. It’ll take at least a month for the processing though, meaning a delayed payout for many.
**Host:** There has been some criticism leveled at KTM regarding the decision to pay dividends in April, right before this financial crisis emerged. What’s your take on that?
**Guest:** The timing does raise eyebrows. While KTM claims the dividend was reduced from previous years and justified by 2023’s performance, the significant drop in sales weakens that argument.
It’s a difficult situation, and there are clearly complex factors contributing to KTM’s current predicament. It’s important for the company to be transparent about its financial situation and communicate clearly with its employees and stakeholders throughout the restructuring process.
**Host:** Thank you for sharing your insights, [Guest name]. This is a developing story, and we’ll continue to follow it closely.
