Bike manufacturer in distress

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Stefan Pierer has shaped the KTM brand over the last 30 years - now all eyes are on him to see if the motorcycle manufacturer can be restructured.

(Bild: Krone KREATIV/Manfred Fesl, Markus Wenzel)

No money to pay the advance on the December salary for the more than 3000 employees; and with VMG Metall, another company from the company network that has slipped into insolvency - the plight of motorcycle manufacturer KTM is getting worse and worse. Many are puzzling: How bad is the situation really for the company that has become a restructuring case?

"We are now making a pit stop for the future," said Stefan Pierer on November 26, when Pierer Mobility AG announced that three days later, three companies of motorcycle manufacturer KTM would be filing for insolvency proceedings. Since November 29, KTM AG, KTM Forschungs & Entwicklungs GmbH and KTM Components GmbH have thus been cases of restructuring. 90 days remain until the restructuring plan is to be voted on February 25. However, doubts are growing as to whether the Mattighofen-based company will really make it until then.

Not only is the mountain of debt at the company from Mattighofen (Upper Austria) enormous at around two billion euros, but the extent of the damage at the pit stop is becoming ever greater.

After the more than 3,600 employees affected had been promised that they would receive a 90 percent advance on their December salary a few days after the opening of insolvency proceedings, they were then put off until "before Christmas". It is now clear that they do not have the liquidity to make such transfers. The December salary is not due until the end of the month, as is usually the case.

Only a small fraction was transferred
This is a blow for the employees - because they are already missing their November salary and most of their Christmas bonus. Both will be covered by the insolvency compensation fund. In the meantime, KTM has only transferred a small fraction - namely the salary for November 30 and the December portion of the Christmas bonus.

In addition to suppliers, customers, financial institutions, banks, the tax office and health insurance fund, the workforce is suffering the most: 250 employees have already been made redundant and a further 500 will also be sent to the AMS in January. Will that be enough? Will it even be possible to continue? The rumor mill has been churning since Friday morning, when it was announced that there is no money for the December advance payments: it is a mixture of concern and fear. Fear that KTM might not be able to make it and that the planned restructuring might fall through.

Hearing at the regional court in Ried on December 20
On Friday, December 20, the regional court in Ried im Innkreis will hold the first hearing in the insolvency proceedings. It will then become clearer what course the company will take. It is not yet clear how the coming days will develop. The insolvency of a subsidiary of KTM Components GmbH is an additional cause for concern. "It is somehow impossible to assess the situation," says Wolfgang Gerstmayer from the GPA trade union in Upper Austria.