KTM closes factory for 3 months because subcontractor has stopped deliveries. The new Indian owner is also withholding promised money.
KTM is once again facing possible bankruptcy. The motorcycle manufacturer's factory must close for three months.
Subcontractors have stopped deliveries of vital parts. Indian investor Bajaj has not yet met its investment ceiling.
The future of the Swedish brand Husqvarna, which KTM manufactures under license, is therefore also uncertain.
The factory closure is a reality. It is due to a lack of parts from subcontractors. They have apparently lost patience with KTM's financial situation.
The uncertain situation is hitting the employees hard. They are now forced to go home without work for three months. This is the second time in a short time that they have to realize that their positions are hanging by a thread.
At the same time, the employees who are still at the factory only work 30 hours a week. This is happening at a time of generally rising prices.
This puts further pressure on employees' private finances.
The announcement of the closure came on Thursday last week. Managing Director Gottfried Neumeister delivered the news himself, which was given to employees via a video call.
This is what the Krone Zeitung writes.
KTM's management and economic pressure
The mood among employees reportedly became depressed. Hope for a secure future was replaced by despair. This happened only a month after a rescue plan otherwise seemed to be in place.
Wolfgang Gerstmayer is the chairman of the GPA union at KTM. He has already commented on the serious situation.
– We need to have an investor in place by May 23, he told the newspaper Kronen Zeitung.
Just a month ago, many believed that KTM had been saved. Former CEO Stefan Pierer had been ousted from the management and Gottfried Neumeister had been appointed to the position.
Neumeister managed to reach an agreement with the creditors at the last minute, partly because the Indian motorcycle giant Bajaj promised to invest as a new co-owner. But the promised money has not yet arrived in Austria.
Despite the gloomy situation, Gerstmayer still has some optimism and confidence in the new management. He believes that they are at least doing better than their predecessors.
The future of KTM and Husqvarna
"The new management has been much better than the previous one," says Wolfgang Gerstmayer.
– Stefan Pierer never tried to get the employees on board and run the business together.
"- I think the new board with Neumeister shows a completely different attitude," the union chairman continues. They want us to do this together.
Now KTM's hopes rest heavily on its Indian owners. Bajaj must come up with the promised funds, otherwise the motorcycle brand will have turned the key for the last time.
Six billion Danish kroner of KTM's total debt must be paid as early as May. The money must be paid to creditors to avoid further legal action.
If payment is not made, the creditors have every right to declare the entire company bankrupt, which will have major consequences for the brand and its employees.
KTM also produces the famous Swedish Husqvarna motorcycles under license. Any KTM bankruptcy would therefore directly and significantly affect Husqvarna.
What exactly will happen to the classic Swedish motorcycle brand in the event of bankruptcy is unknown. If no one wants to take over production, Husqvarna also risks disappearing from the market. motorcycle industry in general.
Boosted is following the situation at the KTM Group closely. You can read more about how it all got to the point where the business is now at risk of collapsing completely for the second time here .
