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 measures is KTM considering to address its financial challenges?
## Interview with KTM Spokesperson Hans Lang
**News Anchor:** Welcome back to the show. We’re joined today by Hans Lang, spokesman for KTM, about the company’s recent filing for insolvency. Mr. Lang, thanks for joining us.
**Hans Lang:** Thank you for having me.
**News Anchor:** KTM has been struggling recently, but this decision to file for self-administration is a significant development. What led to this point?
**Hans Lang:** As you mentioned, the company has faced some headwinds recently. Primarily, we’ve seen a sharp increase in personnel costs, roughly 125 million euros within just three years. This, coupled with a steeper than anticipated slump in sales in 2024, has put us in a difficult position. However, it’s important to remember that KTM has grown substantially since 1992, and we’re committed to finding a solution through this restructuring process.
**News Anchor:** Many people are concerned about the nearly 3,700 employees affected by this move. Can you assure them about their wages and benefits going forward?
**Hans Lang:** We understand the concerns of our employees, and we are working hard to minimize the impact of this situation. While we can’t pay November salaries and the Christmas bonus immediately due to legal constraints, the insolvency remuneration fund will step in, and employees will receive these payments.
**News Anchor:** When can employees expect to receive these back payments?
**Hans Lang:** Unfortunately, the processing through the fund takes time, approximately a month. This means the Christmas bonus will be paid after Christmas.
**News Anchor:** What about December salaries? Will those be paid on time?
**Hans Lang:** Yes, we will pay December salaries as usual, in the first week of December. We understand that this is a crucial time, and we’re committed to supporting our employees through this difficult period.
**News Anchor:** The union has been critical about KTM’s decision to pay a dividend earlier this year. How do you respond to these accusations?
**Hans Lang:** The dividend was paid for the pervious year, and significantly reduced compared to the previous year due to the anticipated challenges in 2024. Obviously, the downturn has been steeper than anticipated.
**News Anchor:** What’s the next step for KTM in this process?
**Hans Lang:** We have 90 days to work with our creditors on a restructuring plan that addresses these challenges and sets a path forward for KTM. This plan will likely include measures like short-time work and reducing the workforce by up to 300 positions. However, we remain optimistic about the future of KTM and believe this restructuring will allow us to emerge stronger.
**News Anchor:** Mr. Lang, thank you for your time and for giving us these insights into a difficult situation. We wish you and KTM all the best in navigating this challenge.
**Hans Lang:** Thank you.
