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.
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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 the insolvency affect KTM employees’ ability to receive their November salaries and Christmas bonuses?
## Interview: The Future of KTM Employees
**(Host)**: We’re joined today by Stefan Schmidt, a worker at the KTM motorcycle manufacturer, which recently filed for insolvency. Stefan, thank you for being with us today. This must be a very difficult time for you and your colleagues.
**(Stefan)**: It is indeed. The news of KTM facing bankruptcy came as a shock to many of us. We’re all worried about our jobs and the future.
**(Host)**: Can you tell us a bit about the situation? What are the immediate impacts of this insolvency on the workforce?
**(Stefan)**: Well, the most pressing issue is that our November salaries and Christmas bonuses haven’t been paid. The company says they’re legally unable to do so until the restructuring process begins.
**(Host)**: So what’s being done to ensure employees are compensated during this period?
**(Stefan)**: The insolvency remuneration fund will step in to cover our back pay. However, it could take a month for the processing to complete. That means our Christmas bonus will likely come after Christmas.
**(Host)**: What about December salaries?
**(Stefan)**: KTM assured us that they will pay December wages next week. They’re calling it a measure to “soften hardship cases”.
**(Host)**: The union has been critical of KTM’s management decisions, particularly regarding dividend payouts earlier this year. What are your thoughts on that?
**(Stefan)**: It’s a complicated issue. We understand KTM’s need to reward investors, but seeing a dividend paid out while facing financial difficulties raises questions.
**(Host)**: How are employees coping with this uncertainty and anxiety?
**(Stefan)**: There are meetings with the Chamber of Labor planned from Monday to explain the situation and address our concerns. We’re all hoping for a swift and fair resolution to this crisis. It’s affecting not only our livelihoods, but also the entire community that relies on KTM.
**(Host)**: Thank you for sharing your experiences with us, Stefan. We wish you and your colleagues all the best through this challenging time.
