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.
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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 measures are being planned by KTM to address its financial difficulties?
## Interview: KTM Employees Facing Uncertain Future
**Host:** Today we’re joined by Wolfgang Gerstmayr, managing director of the GPA union, regarding the recent developments at KTM and the implications for its 3,670 employees. Wolfgang, thank you for joining us.
**Wolfgang:** It’s a pleasure to be here.
**Host:** As we know, KTM is going through a difficult restructuring process, and many employees are understandably worried. Can you shed some light on the immediate implications for workers?
**Wolfgang:** The situation is indeed unsettling for the workforce. KTM is unable to pay November salaries and Christmas bonuses due to the legal limitations of the restructuring process. Thankfully, the insolvency remuneration fund will step in to cover these payments, though it will likely take a month for employees to receive them, meaning the Christmas bonus will be delayed.
**Host:** That’s a tough situation, especially during the holiday season. What about December wages and salaries?
**Wolfgang:** KTM has assured us that December wages will be paid out next week, in the first week of December. This will hopefully alleviate some of the immediate hardship faced by employees.
**Host:** That’s a bit of relief. Looking ahead, what can employees expect in the new year?
**Wolfgang:** KTM is planning on reducing working hours to 30 hours per week, effectively implementing internal short-time work. Furthermore, they anticipate up to 300 job cuts. The specific details of the restructuring plan, including further measures, are yet to be finalized and will be agreed upon with creditors within the next 90 days.
**Host:** There’s much uncertainty surrounding the future of KTM. Some critics have pointed to the dividend payout in April, questioning the company’s financial management. What are your thoughts on this?
**Wolfgang:** It’s frankly infuriating. KTM’s CEO, Stefan Pierer, has consistently campaigned against increased wages, yet now expects the public sector to bail out his company through the insolvency remuneration fund, probably due to his own poor management decisions. While KTM justifies reducing the dividend payout from previous years, the fact remains that they still paid out dividends while employees face such hardship.
**Host:** Clearly, there are serious concerns about KTM’s handling of the situation. What are your main priorities going forward?
**Wolfgang:** Our top priority is ensuring our members receive all their due wages and benefits. We will continue to closely monitor the situation and work tirelessly to protect the rights and interests of KTM employees during this challenging time.
**Host:** We appreciate your time and insights, Wolfgang. This is clearly a difficult time for KTM employees, and we hope that a successful restructuring plan will be reached soon, ensuring job security and a fair outcome for all involved.
