KTM-Bankruptcy: Employees Left Without Salaries and Christmas Bonus

The insolvent motorcycle manufacturer KTM in Mattighofen temporarily halted production last Friday. The interruption of operations was brought forward by extending the Christmas holiday by one week. Furthermore, the December wages and salaries will not be paid in advance, the company confirmed without comment. The Ried District Court is preparing for a large turnout at the first creditors' meeting on December 20th.

December Funds Will Not Be Paid to KTM Employees After All

Andreas Stangl, President of the Upper Austrian Chamber of Labour, expressed his disappointment with KTM's approach: "There simply is no more handshake quality." The wages and salaries for November and the Christmas bonus were not transferred either. Originally, it was said that a 90 percent advance of the December money would be paid out before Christmas. The Chamber of Labour will do everything "to ensure that the employees receive their outstanding claims from the Insolvency Compensation Fund as quickly as possible," said Stangl. The chairpersons of the PRO-GE and GPA unions, Reinhold Binder and Barbara Teiber, spoke of a "slap in the face for those affected. They are now paying the price for apparently misguided management decisions". FPÖ Secretary General Christian Hafenecker called on KTM CEO Stefan Pierer to provide the money. It is sad that these employees, "who are not to blame for the bankruptcy, are now not receiving any money shortly before Christmas," he said in a statement. "There was money available for the ÖVP," he referred to Pierer's party donations under Sebastian Kurz.

Only a 30-Hour Week from January

Production at the motorcycle manufacturer was also halted prematurely last Friday. The interruption of operations was brought forward by one week by extending the Christmas holiday. The affected employees took additional leave or reduced overtime. January and February will then see the already announced interruption of operations due to high inventory levels. During this time, a weekly working time of 30 hours with corresponding wage and salary cuts applies. The workers stay at home, while the employees have a four-day week.

As reported, KTM has about 130,000 motorcycles in stock, some of which are not expected to comply with the Euro5+ emission standard applicable from next year. There are exceptions for "discontinued series", but they must be specifically requested by the manufacturer and only cover very limited quantities, which can then still be registered as new until the end of 2026. The ARBÖ stated on Friday in response to an APA inquiry that each dealer can take 100 units (or 10 percent of the sales volume) per model unregistered into the new year. These bikes must be sold by the end of 2026. All other motorcycles would have to be registered this year and would then be so-called "day registrations".

Separate Entrance for KTM Creditors at Court

On November 29, KTM AG, KTM Components GmbH, and KTM F&E GmbH each filed their bankruptcy applications at the Ried District Court. The three companies have debts in the billions. 750 of the total 3,670 employees of the three companies will be laid off. Restructuring proceedings with self-administration have been opened. On December 20, the report day session will take place at the Ried District Court, together with the first creditors' meeting. Due to the expected high turnout, there will likely be a separate entrance for KTM creditors, the court announced in advance. The proceedings for the three companies, which take place at two-hour intervals, are only open to parties involved.

KTM Subsidiary Vöcklabrucker Metallgießerei in Bankruptcy

The KTM bankruptcy has now also dragged down a subsidiary of KTM Components, Vöcklabrucker Metallgießerei GmbH. A bankruptcy proceeding was opened on Friday at the Wels District Court at the company's own request. 134 employees lose their jobs, the liabilities have been estimated by the credit protection association KSV1870 at 3.5 million euros. The reason for the bankruptcy is the several-week production stop at KTM.

Only on September 1, KTM Components GmbH had taken over the foundry, half of the sales were attributable to the also insolvent KTM AG. After the motorcycle manufacturer temporarily suspends production until March, the metal foundry should also interrupt its production from December 13 to January 13 and reduce its general production plan by 50 percent. Due to the predicted massive drop in sales and the "fact that the cost structure does not allow a sufficiently rapid adjustment to this situation, a positive result for 2025 can now no longer be presented," is how the situation is described.

The management had assumed that KTM AG would provide the foundry with the necessary liquidity through appropriate advance payments to cover the ongoing costs during the phase of the planned production shutdown. This had also been promised by the boards of KTM AG, but did not happen due to the bankruptcy.

(APA/Red)

This article has been automatically translated, read the original article here.