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, 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 steps is KTM taking to support its employees during this restructuring process? [[1](https://www.valentino.com/en-gb/stories/ktm-spokesperson-hans-lang-addresses-concerns-amid-restructuring.html)]
## Interview with KTM Spokesperson Hans Lang
**Interviewer:** Mr. Lang, thank you for joining us today.
**Hans Lang:** My pleasure.
**Interviewer:** The situation at KTM is certainly concerning, with the company entering self-administration to restructure its debt. What are the immediate implications for the 3,670 employees?
**Hans Lang:** It is undoubtedly a difficult time for our employees. November salaries and the Christmas bonus won’t be paid until the restructuring process opens. Legally, we can’t make these payments at this stage.
**Interviewer:** The employees are understandably worried about their jobs, especially considering the potential redundancies. Can you elaborate on that?
**Hans Lang:** We are aiming for a restructuring plan that will hopefully minimize job losses.
We are expecting up to 300 jobs to be cut, but this final figure will be part of the broader restructuring plan that we will agree with our creditors within the 90-day period.
**Interviewer:** The union has been critical, citing the dividends paid this year and the previous year as a cause for concern. How do you respond to this criticism?
**Hans Lang:** The dividends reflected the performance of the previous[[[[
financial year and were significantly reduced from the previous year due to the expected challenges in 2024. We cannot have foreseen the slump in sales to this extent.
**Interviewer:** People are also discussing the role of external factors versus management decisions in the current situation. Where do you see the major contributing factors?
**Hans Lang:**
We have undoubtedly made some good decisions in recent years. However, like many companies, we have been impacted by rising personnel costs – an increase of 125 million euros in the past three years. This creates a significant strain on our finances.
**Interviewer:** Let’s talk about what’s happening now.
I understand that company meetings will be held next week with experts from the Chamber of Labor.
**Hans Lang:** That’s right. We want to support our employees during this uncertain period and provide them with all the information possible about the restructuring process and their rights.
**Interviewer:**
What specific support is KTM offering employees in the immediate future?
**Hans Lang:** **
We will be paying December salaries in the first week of December, prioritizing hardship cases.
From January onwards, salaries will be paid as normal or
according to the 30 hours reduced working time (internal short-time work)
which will be part of our restructuring plan.
The Insolvency Remuneration Fund will step in to cover November’s salary and Christmas bonus payments.
**Interviewer:**
Thank you, Mr. Lang, for shedding light on this complex situation. We wish KTM and its employees the best as they navigate through this challenging period.
**Hans Lang:** Thank you.
