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 are the potential broader consequences for the motorcycle industry as a result of KTM’s financial trouble?
## Interview: KTM on the brink
**[Host]**: Thank you for joining us today to discuss the breaking news surrounding KTM’s insolvency. We have with us, [guest name and title], who can provide us with some insights into this complex situation.
**[Alex Reed]**: Thanks for having me.
**[Host]**: KTM recently announced its intention to enter self-administration, a move that has sent shockwaves throughout the industry and left many of its 3,670 employees worried about their future. Can you walk us through what this means for them?
**[Alex Reed]**: This is a dire situation for KTM employees. As things stand, they won’t be receiving their November salaries or Christmas bonuses. The company cites legal restrictions due to the insolvency proceedings.
While KTM says December wages will be paid next week, January onwards remains uncertain. They’ve hinted at potential lay-offs (up to 300 jobs) and internal short-time work arrangements.
**[Host]**: The Chamber of Labor is stepping in to assist with some financial support. Can you elaborate on that?
**[Alex Reed]**: Yes, the insolvency remuneration fund will step in to cover the missed November payments and the Christmas institutions, but it’s a process that takes several weeks.
**[Host]**: What are the broader implications of this situation for the motorcycle industry?
**[Alex Reed]**: This goes beyond KTM. The union GPA has criticized KTM management for past decisions, including dividend payouts, even as they now seek public funding through the insolvency fund. While external factors certainly play a role, the blame-game has already begun.
This situation casts a shadow over the entire industry, raising questions about how other motorcycle manufacturers are weathering the current economic storm.
**[Host]**: What’s next for KTM?
**[Alex Reed]**: The company has 90 days to work with creditors on a restructuring plan. This plan will determine the long-term future of KTM. If unsuccessful, it could lead to liquidation and the end of a legendary name in the motorcycle world.
**[Host]**: This is truly a developing story and one we will continue to follow closely. Thank you for sharing your insights with us today.
**[Alex Reed]**: You’re welcome.
