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.”
How will KTM handle employee salaries moving forward?
## Interview with KTM Spokesperson
**Interviewer:** The news of KTM’s impending insolvency and potential job losses for its 3670 employees is alarming. Can you tell us what the situation looks like for these employees?
**Spokesperson:** We understand this is a worrying time for our employees. From Monday, they will have the opportunity to attend company meetings with experts from the Chamber of Labor who can offer support and guidance. Regarding salaries, while we are unable to pay November salaries and Christmas bonuses until the restructuring process begins, the insolvency remuneration fund will step in. Employees will receive their owed money, although processing may take around a month.
**Interviewer:** The union has been critical of KTM, suggesting that mismanagement, including paying dividends in April, contributed to the current situation. How do you respond to these claims?
**Spokesperson:** The KTM CEO will address these points at a later stage.
**Interviewer:** You mentioned that December salaries will be paid next week. Can you elaborate on the company’s plans for salaries going forward?
**Spokesperson:** December salaries will be paid in the first week of December.
From January, we anticipate wages and salaries to be paid as normal, or potentially adjusted to a 30-hour work week if the internal short-time work plan is implemented.
**Interviewer:** What other measures are being considered as part of the restructuring plan?
**Spokesperson:** Up to 300 jobs may be impacted, but the final details will be outlined in the restructuring plan that KTM needs to agree upon with creditors within 90 days.
**Interviewer:** Can you share your perspective on the factors contributing to KTM’s situation?
**Spokesperson:** Whilebinant years, including significant growth and expansion.
We are working diligently to navigate these challenges and believe restructuring is the best path forward.
