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, 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.”
How will KTM’s insolvency filing impact the jobs of its 3,670 employees?
**Interviewer:** I’m here with Alex Reed, an expert on [Relevant Field], to discuss the recent developments at KTM, the motorcycle manufacturer facing financial difficulties. Alex Reed, can you tell us what this news means for KTM’s 3,670 employees?
**Alex Reed (assuming they are a labor advocate):** This is a very worrying time for KTM employees. The company’s insolvency filing means there are serious concerns about their jobs. Initially, workers will not receive their November salaries or Christmas bonuses, which will be covered by the insolvency remuneration fund.
**Interviewer:** This delay in payments must be incredibly stressful for the workers, especially during the holiday season.
**Alex Reed:** Absolutely. The Chamber of Labor is urging KTM to expedite the process as much as possible. But it’s estimated that employees may not receive their owed funds until after Christmas.
**Interviewer:** Beyond immediate financial concerns, what other impacts are we seeing on KTM workers?
**Alex Reed:**
KTM has indicated they plan to reduce working hours and potentially eliminate up to 300 positions. This adds to the uncertainty and anxiety felt by employees. The union is critical of KTM’s management decisions, especially their past reluctance to consider additional wage costs while simultaneously paying out dividends. They argue that those funds could have been used to better prepare for the current crisis.
**Interviewer:** What happens next in this process?
**Alex Reed:** KTM is currently going through a restructuring process, which will include working with creditors to develop a plan to address their financial difficulties. This process has a 90-day timeline. The outcome will determine how KTM moves forward, and the ultimate fate of its employees hangs in the balance.
**Interviewer:** Thank you so much for sharing your insight on this complex situation. We wish the best to KTM employees during this trying time.
**Alex Reed:** Thank you for having me.
