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 were the external factors that KTM claims contributed to its financial difficulties?
## Interview: KTM Faces Bankruptcy
**Interviewer:** Today we are here with Stefan Lang, a spokesperson for KTM, to discuss the company’s recent announcement of impending insolvency.
**Lang:** Thank you for having me. As you mentioned, KTM is facing a difficult situation, which we are tackling head-on through a restructuring process.
**Interviewer:** The news has understandably left employees worried about their jobs. What can you tell them?
**Lang:** We understand their concerns. We have initiated consultations with experts from the Chamber of Labor to guide employees through this time. We are committed to minimizing job losses and finding solutions that are fair and sustainable for all parties involved.
**Interviewer:** There are concerns regarding November’s salary and the Christmas bonus. What’s the situation there?
**Lang:** Unfortunately, due to legal restrictions linked to the restructuring process, we are unable to pay November salaries and the Christmas bonus immediately. The insolvency remuneration fund will step in for this, although there will be a delay of at least a month.
**Interviewer:** This brings up the criticism from unions, specifically the GPA, who point fingers at management, suggesting this situation is a result of mismanagement. What’s your response to that?
**Lang:** While we acknowledge the criticisms, I believe KTM has achieved significant progress in recent years. However, we have also been impacted by external factors such as rising personnel costs, which have significantly increased over the last three years.
**Interviewer:** There sewaalso talk of a dividend payout in April. How do you reconcile this with the current situation?
**Lang:** The dividend was significantly reduced from previous years due to the anticipation of a more challenging 2024. However, the severity of the sales slump was unforeseen.
**Interviewer:** What are KTM’s next steps? What can we expect in the coming months?
**Lang:** We are working diligently on a restructuring plan to be negotiated with creditors within the next 90 days. This plan will outline the measures needed to stabilize the company.
**Interviewer:** Thank you for shedding light on this complex situation, Mr. Lang.
**Lang:** Thank you for having me. I hope to keep you updated on KTM’s progress in the coming months.
