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.”
How are KTM employees coping with the delayed payment of salaries and Christmas bonuses?
## Interview with a KTM Employee
**Interviewer:** Welcome to the program. Your company, KTM, is facing financial difficulties and has filed for restructuring. Can you tell us how this news is impacting you and your coworkers?
**Employee:** It’s a very stressful time. We’re all worried about our jobs. We heard the news about the restructuring last week, and there’s a lot of uncertainty about what will happen next. Everyone is wondering if they’ll still have a job in the new year.
**Interviewer:** You mentioned job security. What have you been told about potential layoffs?
**Employee:** The company is talking about potential cuts, up to 300 jobs. Nobody knows who will be affected yet. Next week we have meetings with the Chamber of Labor to find out more about our options and what kind of support is available.
**Interviewer:** It’s been reported that there are issues with paying November salaries and the Christmas bonus. What is the latest on that?
**Employee:** That’s right. Apparently, legally, the company can’t pay us until the restructuring process starts. We’ve been told the insolvency remuneration fund will eventually pay out the wages, but that could take a month or more. So we won’t get our Christmas bonus until after Christmas.
**Interviewer:** What are the reactions from employees to these developments?
**Employee:** There’s a lot of frustration. We worked hard all year, and now we have to wait to get paid for what we’ve earned. The union is criticizing KTM for paying dividends earlier this year while now facing these financial problems. They believe there’s been mismanagement.
**Interviewer:** There’s been talk about KTM blaming external factors like increased personnel costs. What do you think?
**Employee:** It’s a complex situation. I know KTM has expanded and hired a lot of people in recent years. I think they are trying to figure out the balance between growing the business and managing costs. Unfortunately, there were also some changes in the market they didn’t fully anticipate.
**Interviewer:** What are your hopes for the future of KTM and for yourself?
**Employee:** I hope they can find a solution that allows the company to survive and keep as many jobs as possible. KTM has a strong brand and loyal customers. Of course, I want to keep working here and be part of its future. It’s a difficult situation, but we’re trying to stay hopeful for the best.
