Fears for jobs

Schmidt KTM

More than 3600 employees work in the three companies of the motorcycle manufacturer that slipped into insolvency. It remains to be seen how many employees will have to leave KTM in the restructuring process. The AMS - here Iris Schmidt - is gearing up.

(Bild: Krone KREATIV/Markus Wenzel (2))

500 jobs to be lost by the end of the year! This figure leaked out shortly after the opening of the three insolvency proceedings at KTM. A first indication that the restructuring of the motorcycle manufacturer will cost many jobs. The Public Employment Service is preparing for a surge in unemployment registrations in the region, as many suppliers are now also beginning to falter.

More than 3,600 people are employed by the three companies affected by the insolvency - KTM AG, KTM Components GmbH and KTM Forschungs & Entwicklungs GmbH. The motorcycle manufacturer still owes them their November salaries and Christmas bonuses, which will now be paid late by the insolvency compensation fund, and there is also uncertainty as to what will happen next.

We spoke to Iris Schmidt, Managing Director of the Upper Austrian Public Employment Service, which is preparing for a sharp increase in unemployment registrations.

"Krone": The insolvency filing by motorcycle manufacturer KTM is like an earthquake in the Braunau region. Of the more than 3600 employees at the affected companies, 500 will have to leave by the end of the year. How is the AMS dealing with this?
 IrisSchmidt: It is not yet clear what dimension this will actually have, how many people will ultimately be made redundant, because it will not be clear for another 90 days whether the restructuring plan will be approved. The fact is that many suppliers are affected by this situation and don't know what will happen next. They have invoices to pay for deliveries that they have ordered for KTM. We don't know whether there will be additional layoffs, even if they are temporary.

From Monday, the insolvency experts from the Chamber of Labor will be holding works meetings directly on site at KTM.
These are a good step for the employees who are now affected so that there is at least some clarity about what the situation means for them. It's now really a matter of seeing how high the demands are. As the AMS, we have not yet been asked to do this.

In the Braunau region, of course, the situation is massive. It's also affecting suppliers - and many other things are also affected. An insolvency like this also has an impact on purchasing power, so the baker is just as affected as everyone else.

Iris Schmidt, Geschäftsführerin des Arbeitsmarktservice OÖ

Two and a half weeks ago, KTM's difficulties became public knowledge. How long has the AMS been preparing?
In October, we had an 18 percent increase in the number of people registered in Upper Austria compared to the previous year. It was already clear that we would have to prepare ourselves if the winter seasonal unemployment also came. So we spent the whole of November focusing on what we could do - first on a small scale, now on a large scale.

What do you mean by these preparations?
We are gearing up, are currently pooling our employees and asking them to let us know which part-time employees can increase their hours and how much overtime can be worked. On the other hand, we are looking at which agendas we can postpone. We are putting what is not so important on the back burner. We are now focusing all our capacity on unemployment registrations and subsequently on unemployment benefit applications. We don't have more staff because of this, but we are now pooling our resources in the same way as during the coronavirus period, when we had to cope with short-time working and the increase in unemployment benefits. Securing the livelihood of those affected has top priority. People already have enough uncertainty.

We now simply need the troubleshooter company to a certain extent, which we can also relocate at any time when it comes to registering for unemployment and registering for job searches.

Iris Schmidt, Geschäftsführerin des Arbeitsmarktservice OÖ

A lot of things are also uncertain for the AMS.
We don't know exactly when people will come to us. But when they do arrive, we have to be prepared so that we can support people as well as possible from day one. That's what we're doing right now. We are already in contact with other federal states, such as Lower Austria, so that they can calculate these applications if necessary. However, registration must take place locally. This means that we are preparing to have teams based in Braunau.

However, they are not only focused on the Braunau region.
We know of many other companies that are downsizing. We also have other regions where people are temporarily laid off. And we have to look after them too. We simply have to be equipped in such a way that we can be on site where the heat is on or have the necessary capacities in the background to calculate the applications. For now, that has priority.

The seven largest company insolvencies in Upper Austria in 2024: KTM is by far the most indebted.

(Bild: Krone KREATIV/stock.adobe.com)

Away from KTM, many companies have problems. Wage cuts, reduced working hours and job losses are the order of the day.
We now know that this is a structural problem in the industry. And unlike in previous crises, when it was relatively easy to place people in other companies because things were going well there, the difficulties are now being felt across the board. This will take longer. Now we have to find ways of dealing with it.

Next week there will be a round table with the state of Upper Austria, the AMS, the Chamber of Labor and the Chamber of Commerce.
There needs to be very close coordination between the social partners, the state and the AMS because we now have to think about foundation models. We now have to use the time to train people and make them fit for the transformation and the new jobs. We will probably need ideas from the federal government, but these are only flanking measures that will not solve the structural problems. We are doing damage limitation. But it would be important to look in advance at how we can support the business location so that not so many jobs are lost now.