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 timeline for KTM to develop a restructuring plan and what will this plan entail?
## KTM in Insolvency: An Interview with Our Guest
**Interviewer:** Thank you for joining us today. KTM, the renowned motorcycle manufacturer, has announced a self-administered insolvency. This news has understandably sent shockwaves through the industry and among its 3,670 employees.
**Guest:** That’s right. This is a significant development for KTM and the wider motorcycling community.
**Interviewer:** Can you walk us through what this means for KTM’s employees? What immediate impact are they facing?
**Guest:** The immediate impact is uncertainty and concern. November salaries and Christmas bonuses will not be paid immediately. Sadly, up to 300 jobs are potentially at risk. The good news is that December salaries should be paid, although possibly earlier than usual, and wages should resume as normal in January, potentially with a reduction to 30 hours.
**Interviewer:** The Chamber of Labor stated it will step in to ensure employees receive their November wages and Christmas bonuses. What exactly does this process entail?
**Guest:** The insolvency remuneration fund will cover these payments. The Chamber of Labor is helping employees navigate this process, which will likely take at least a month. This means that employees will unfortunately receive their Christmas bonus after Christmas.
**Interviewer:** There’s been criticism regarding the timing of KTM’s dividend payout earlier this year. What can you tell us about that?
**Guest:** Yes, the timing has been questioned, especially given the announcement of insolvency shortly after. KTM’s spokesperson defends the dividend, arguing it was based on the previous year’s record high performance.
He claims that although a more challenging 2024 was predicted, they couldn’t foresee such a drastic slump in sales.
**Interviewer:** What are the next steps for KTM? What is the timeline looking like for a potential recovery?
**Guest:** KTM has ninety days to come up with a restructuring plan in collaboration with its creditors. This plan will outline the necessary measures to address the company’s financial woes and hopefully pave the way for recovery. The details of this ongoing process remain to be seen.
**Interviewer:** Thank you for providing this insightful overview of the situation. We’ll continue to monitor developments closely and keep our viewers updated.
**[The interview concludes].**
