The Austrian motorcycle giant, KTM, is going through an unprecedented crisis which is jeopardizing its future. To ensure its survival, the company was forced to implement drastic measures, impacting its employees as well as its suppliers and the regional economy. KTM AG will file for bankruptcy on November 29, 2024
The motorcycle manufacturer KTM AGbranches of
Pierer Mobility AGis going through a critical period which requires drastic measures to guarantee its survival. While the parent company has started a European restructuring procedureKTM is calling on its 3,700 employees to show solidarity in a collective effort to save the company.
According to Speedweek, as part of the restructuring plan,
KTM had decided to withhold part of November and December salaries as well as Christmas bonuses. According to the Upper Austrian Chamber of Labor, this measure was intended to protect available funds. It was expected that if the restructuring process was successful, the amounts withheld would be returned from the insolvency fund. A brutal announcement which caused a reaction… “It has now been decided that KTM AG would pay salaries for December herself“, confirmed Thursday Heinz
Kinigadner (64 ans). « People need something for the Christmas period – you can't expect that from people. » This is why December salaries will now be paid a little earlier, at the beginning of next week.
In addition to this temporary withholding of salaries finally revisited, KTM announced a new wave of job cuts. After reducing its workforce by 700 positions in 2024, the company plans 300 additional layoffs. These reductions come on top of a natural drop in staff due to early retirements and a freeze in recruitment. Asked about the coming weeks, the two-time motocross champion replied: “ of course it will be difficult!
Employees will earn less on a lower hourly basis. But we are convinced that Stefan Pierer will implement his plann.»
KTM to suspend production during January and February 2025
To reduce costs, KTM decided to
suspend production during the months of January and February 2025. The recovery is planned for 1er
mars 2025with guarantees of reintegration for some of the employees. This decision, although extreme, illustrates the seriousness of the situation and the efforts to preserve as many jobs as possible.
The crisis at KTM has direct consequences on the local suppliers et the regional economyparticularly in the industrial district of Braunau. Unemployment figures in this area have increased significantly, exacerbated by the ongoing recession.
Upper Austria's political representatives are now calling for public aid to support KTM. However, they set a condition for possible state participation in the company, which could change the governance structure in the long term.
Stefan PiererCEO of Pierer Mobility AG, is committed to fighting to preserve KTMa company he describes as “ his life's work “. However, this battle is far from won. The success of the restructuring depends on credible plans and close collaboration with creditors.
The situation at KTM AG reflects a critical moment not only for the company, but also for the regional industry that depends on its activity. The next few months will be decisive for Europe's largest motorcycle manufacturer, which is trying to overcome this crisis with the support of its employees and, potentially, public authorities.
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