The iconic Austrian motorcycle manufacturer, KTM, has entered a restructuring process to avoid bankruptcy.
The company and two subsidiaries reportedly owe a combined total of $2.8 billion (€2.5 billion), according to Motorcyclesports.com.
The financial crisis puts 3,623 jobs at risk.
Employees are guaranteed their November salaries through Austria’s insolvency fund, but actual payouts may be delayed by months. KTM is expected to lay off at least 500 workers before the year ends, with motorcycle production halted in January and February 2024.
Austria’s Minister of Economy, Martin Kocher, expressed concern over how KTM’s once-promising financial outlook deteriorated so rapidly, demanding transparency from the company.
The governor of Upper Austria, Thomas Stelzer, emphasized efforts to assist KTM, stating, “We are doing everything we can to save the factory and the jobs.” However, Stelzer acknowledged that EU state aid rules and insolvency laws limit what support can be provided.
The situation also raises questions about KTM owner Pierer Mobility’s licensing agreement with Husqvarna. Swedish manufacturer Husqvarna has stated it is too early to predict how the crisis will impact their partnership.
“We are closely monitoring developments and maintaining dialogue with Pierer Group,” said Henrik Sjöström, Husqvarna’s press spokesperson.
