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 does the potential restructuring plan impact KTM employees, including layoffs and delayed payments?
## Interview with an expert on KTM’s financial woes
**Host:** We’re joined today by [Expert Name], [Expert Credentials]. [Expert Name], KTM, the iconic motorcycle manufacturer, is facing a significant financial crisis. Can you walk us through what’s happening?
**Expert:** Certainly. KTM, which also owns Husqvarna and GASGAS, as well as holding a stake in MV Agusta, filed for insolvency protection earlier this month. This means they are facing serious financial difficulties and are seeking to restructure their business to avoid bankruptcy.
**Host:** What does this mean for the 3,670 employees at KTM?
**Expert:** It’s a very worrying time for KTM employees. They are facing uncertainty about their jobs, with up to 300 potential layoffs on the table as part of a planned restructuring.
**Host:** We understand that November salaries and Christmas bonuses are also affected.
**Expert:** That’s right. KTM is unable to pay those immediately due to legal constraints surrounding the insolvency proceedings. The insolvency remuneration fund will step in to cover these payments, but there will be a delay of at least a month, meaning the Christmas bonus will arrive after Christmas.
**Host:** This raises concerns about the potential mismanagement at KTM, particularly regarding the reported dividend payouts in April. Can you elaborate?
**Expert:** The union, GPA, has been highly critical, highlighting KTM’s dividend payouts despite the financial strain. They argue that these payouts demonstrate a lack of foresight and responsibility on the part of KTM’s management, especially as they are now relying on public funds through the insolvency remuneration fund.
**Host:** KTM did acknowledge some difficult external factors, specifically rising personnel costs. What is your take on this?
**Expert:** While external factors like rising personnel costs undoubtedly play a role, it’s important to remember that KTM’s financial troubles are complex and multifaceted. The final restructuring plan will be crucial in determining the future of the company and its employees.
**Host:** Thank you for your insights into this complex situation, [Expert Name].
We will continue to follow this story closely.
