KTM Comes Up Short for Christmas!

KTM Is Unable To Pay Salaries and Christmas Bonuses To Its Employees. 

The situation just went from bad to a whole lot worse, and some 3,600 employees are in for a blue Christmas.

By: Enrico Punsalang

Dec 17, at 6:55am ET

KTM has found itself in a pretty rough place in recent weeks, with the company recently filing for insolvency. The brand somehow found itself 2.9 billion euros (around 3.03 billion USD) in debt, and obviously, this is by no means a good thing. Now, leading up to the announcement, there were quite a few telltale signs that things were looking bad for Team Orange.

For starters, KTM announced a “temporary closure” of its manufacturing facilities for two months in 2025 starting from January going through February. The decision was said to affect around 1,000 employees, who were told that they would not need to report to work once 2025 rolled around. All this came hot on the heels of some very poor sales figures and a massive drop in revenue.

With all that being said, it seems that KTM’s problems just keep getting worse, as now, less than two weeks away from Christmas, the company has apparently announced that it will not be able to pay its employees’ December salaries before Christmas.

Prior to the announcement, KTM promised that it would transfer 90 percent of December’s salaries to the employees. But now, for whatever reason, this will not happen. And so, more than 3,600 employees will celebrate Christmas feeling short-changed, possibly without enough food on the table, and with a gut-wrenching feeling of uncertainty.

It’s bad enough that KTM seems to be going under, but it’s even worse now that it seems as though they can’t be held to their word. Even the President of the Upper Austrian Chamber of Labor,

Andreas Stangl, was quick to condemn KTM’s actions, insinuating that the once-shining Austrian manufacturer is no longer worthy of trust. 

"The November salaries, as well as the Christmas bonuses, were not paid. And now, even before Christmas, this news! There is simply no quality in the handshake between KTM’s management. We, as the Chamber of Labor, will decisively do everything we can to ensure that the employees receive the amounts claimed from the insolvency fund as soon as possible.” - Andreas Stangl, President of the Upper Austrian Chamber of Labor

Meanwhile, Mattighofen mayor Daniel Lang described the situation as “devastating,” and the trade unions GPA and PRO-GE are also concerned, as they should be.

In a joint statement, the unions said: “The employees are now paying the price for obviously wrong management decisions. It will certainly be necessary to examine how such a dramatic situation could have happened and who is responsible for it. We will now do everything we can to ensure that the employees quickly receive what they claim from the insolvency fund, and we will support them during these difficult days and weeks.”

As for the thousands of unpaid workers, well, KTM says that although it won’t be able to transfer the salaries before Christmas, it will do so at the end of the month, as has been common practice in the past. A lack of liquidity on the part of the company has been cited as the cause for delayed payments for now.

As shitty as the situation is at the moment, I can’t help but hope that KTM seriously gets its act together. This whole debacle has become so much bigger than we anticipated, and it sucks that so many workers and employees will have to pay the price for the poor decision making skills of upper management. Let’s hope that KTM at the very least makes good on its promise of paying its workers its wages—at least before the year draws to a close.

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KTM...Is the Ship Sinking?

UPDATE: MV Agusta Seeks To Reassure Everyone That It's Doing Well,

Well, actually at a trade union meeting earlier this week, we got an unexpected twist that raised questions. Now MV answers.

[UPDATE, December 12, 2024: Seeking to answer what were undoubtedly a slew of questions about its future at once, MV Agusta Motors sought to clarify where it's been, where it currently stands, and where it's going in a press release. 

MV says that from 2023 to 2024, it's retained 60 percent of MV's management, as well as added new professionals and specialists to the mix. "This strategy has made MV Agusta completely independent in all its operations," it states in the plainest possible wording.

Furthermore, it adds that all design, prototyping, and production take place in Varese and nowhere else; the same, it says, is true of sales, after-sales, marketing, and customer service. So far in 2024, it says that it's sold 4,000 bikes, which it says represents a 116 percent increase over the previous year's sales.

It goes on to reiterate that while motorcycles and parts may have been stored in warehouses in Austria, all bikes and parts originate from and are produced exclusively in Varese. Not Austria. Additionally, warehouses that may store MV-produced parts and bikes are located in other geographic regions, which makes sense given that it's an international OEM.

I'll quote one other paragraph verbatim, so you can see MV's language here:

"The people who made these results possible will remain in Varese, and nothing will change regarding business operations, as the ownership has never interfered with them," it reads.

Instead, what's currently in play right now in negotiations with KTM is the shareholding structure of MV Agusta, as well as how that might affect the future corporate structure of the company. But overall, MV wants to tell people that it's doing well on its own, in Varese, and that it intends to continue growing right there, and nowhere else. It's proudly made in Italy, and that's where it plans to stay.]

Original piece follows.

The past few months have likely been a nightmare for KTM, and one that the company's higher-ups probably wish they could wake up from right about now. From camshaft woes to financial drama, it's been a deeply unfun roller coaster ride for the mega European manufacturer. 

And now, we have another loop-de-loop in this analogy, as it seems that MV Agusta is about to possibly get off the ride early.

On December 9, 2024, trade unions met with KTM representatives in the Confindustria Varese to discuss current concerns. At this meeting, the regional branch of the CV, CISL dei Laghi, reports that KTM reps stated that MV Agusta is "no longer considered a strategic asset." 

What does this mean? Apparently, it means that talks are already underway to return all of MV Agusta's production back to MV Agusta headquarters in Varese. Under the current agreement, this process should take around 90 days to complete. The current timeline sees final implementation around March 31, 2025.

During the first months of 2025, KTM plans to sell down the stock of MV Agustas that are currently sitting in Austria, but won't produce any more there. Once that's achieved, MV Agusta will have to rely on the bikes it can produce and sell from the factory in Varese, but not create additional stock in the warehouse in Austria. 

CISL goes on to say that the 13-month salary agreement for MV Agusta workers won't be affected and is not up for negotiation, and adds that if financial problems arise, "any cuts would start with management." Which is probably good, because management likely aren't the ones building the bikes.

Currently, around 2,000 MV Agusta motorcycles sit unsold, waiting for new owners. MV Agusta plans to begin its 2025 production run around mid-March, with plans to make around 3,000 motorcycles. Heavy emphasis is being placed on training and learning from past mistakes to move forward with accelerating the three-year MV Agusta development plan coordinated with KTM. 

There's also a tiny little line tucked in near the end of this announcement from CISL dei Laghi, saying that MV plans to manage redundancies in its workforce on a voluntary basis, but also adding that due to the current financial situation, there will be no money to sweeten the exit of anyone who leaves.

It's not clear how many redundancies are expected, and I would imagine I'm not the only one wondering how much further the workforce can be cut after KTM already applied the knife soon after acquiring its controlling interest in MV in the first place. 

Now, what follows is purely armchair thinking, so please acknowledge it as such. But let's say you've got two factories, and you decide more bikes are going to be made in one factory than the other. And let's say they're in two completely different locations, so it's not like you're shuttling workers from one to the other, like a roving band of expert wrenches who go where they're needed.

And let's say that plans change. So, for whatever reason you like, you end up shifting production away from Factory A and back to Factory B. Now more bikes are being made at Factory B than you initially had planned.

Assuming that you'd kept staffing at an appropriate level at both Factory A and Factory B throughout these processes, wouldn't that change imply that you'd need more workers at Factory B, not fewer? More highly technical production in a facility should equal more skilled hands on deck, right?

It's not at all clear what happens here, but here's hoping this gives MV Agusta the freedom it needs to keep fighting on its own terms. I mean, we're talking about a company that survived a fraught two-year acquisition by Harley in the early 2000s. This can't be how it goes out, can it?

We reached out to our contact at MV Agusta for further clarification and we'll update this post once we hear back.

Shimoda Hunting

Shimoda 'still searching' onboard 2025 CRF250RWE

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Section: Competition Post: Alex Gobert

Testing currently taking place in the lead-up to Anaheim.

Team Honda HRC Progressive and Jo Shimoda are ‘still searching’ for an initial direction on the new 2025 CRF250R Works Edition, early in the process of developing the factory race bike that he will race in 250SX West this season.

With teammate Chance Hymas still recovering from off-season knee surgery, Shimoda is preparing for Anaheim 1 and is set to continue in the western region of Monster Energy Supercross.

“I actually told the team I want to start from production bike,” the 22-year-old Japanese rider explained. “So the day I come back from Japan to here, I rode Pala on a full-stock bike and see what that feels like. And yeah, it’s a total different bike, I feel, than what I’ve been riding.”

For Shimoda, his comfort levels are yet to reach where he was at with the 2024 version, and with one month remaining until Supercross 2025, advancing that feeling is being prioritized to ensure he will be at one with the updated model come January 11 at Angel Stadium.

“Not yet,” he added. “So that’s why I was saying, like we’re still working…. just still kind of searching to be honest. Like really, the testing starts [this] week. The only thing I can guarantee you is that I’ll do everything and hoping it’s gonna work.

“You know, the engine is basically exactly the same, but the frame is a lot different, more rigid… The bike, it’s a lot more rigid feeling. In a way, it’s stable, but honestly, I’m still kind of working.

“It’s a whole new bike, so I have to start from learning the bike, building the bike, and then finding that this is what I need. It just takes a long time, you know? Like, and this is the part, like it’s hard for people to understand, because only the person who rides know that feel, you know?”

Entering his second year with Honda and following in the footsteps of the Lawrence brothers after their title success within the manufacturer’s factory 250 program, Shimoda is continuing to find his way, the direction required to consistently perform – even on the previous generation, title-winning bike.

“I mean, last year the plan was, I just told myself it was a winning bike,” he reflected. “In the beginning of the season, I’m like, ‘I’m going to adjust myself into the bike instead of bike adjusting to me’. Because it’s been proven, trying to do that, and then like I said, something mismatched, didn’t work, and I had to make some changes again.”

Supercross preparations paused for Kawasaki signing Prado

Incident during the 2025 pre-season confirmed by MXGP champion.

A pre-season crash has paused Jorge Prado’s 2025 Monster Energy Supercross preparations, ruling the high-profile Kawasaki signing out of the team’s official photoshoot and annual SMX Media Days in Anaheim this week.

Scheduled to appear on Wednesday at Angel Stadium in a series of media sessions, MXGP world champion Prado was a late absentee from the two-day event, immediately casting doubt over his health status.

The Spaniard was also unable to attend Saturday night’s FIM Awards ceremony in Palma – the capital city of Spanish island Majorca – and a video message confirmed that he is currently recovering from a recent incident while training for Anaheim 1 in Southern California.

“I’m very sad not being able to be with all of you guys celebrating this world championship in Majorca, especially in my home country,” Prado explained. “I had a crash last week, I hit my head and my arm, so I couldn’t fly over – I’m pretty sad, not being able to be there.”

While the extent of Prado’s apparent injuries are not entirely clear, it’s still expected that he will be fit to debut with Monster Energy Kawasaki at the SuperMotocross World Championship (SMX) season-opener on Saturday, January 11. He’s been in the US since directly following the Motocross of Nations (MXoN) in October.

Corker Leaves Star Yamaha for Triumph

Team Manager Jeremy Coker Moving from Yamaha Star Racing to Triumph

Jason WeigandtEditorial Director

Our Steve Matthes reported late last night that Jeremy Coker, the 450 Team Manager for Monster Energy Yamaha Star Racing, is leaving the team to take a new roll with Triumph Racing. Triumph had a spot to fill after it parted ways with Team Principal Bobby Hewitt, which was announced on November 20.

We would expect that Coker will work alongside current Triumph Team Manager "Scuba" Steve Westfall. Coker was part of a long line of success for the Star Racing squad, from 250-class domination and then 450 Championships and race wins with the likes of Dylan Ferrandis, Eli Tomac, and Cooper Webb. Coker's half-brother Christian Craig, who scored a 250 West Region Supercross Championship with Yamaha and Star three years ago, recently returned to the squad. With Star still so well set up into the future, including the recent announcement of three new amateur riders to the program (Kayden Minear, Carson Wood, and Caden Dudney) it's surprising to see such a significant management change at the top. Such a move certainly reaffirms Triumph's commitment to being a top player in SMX competition.

2025 Supercross is Coming Soon

A storm is brewing!

Where Does KTM Go?

So, what happens now?

The future of KTM AG will be decided over the next three months. Already, the company is reducing headcount and announced plans to pause production in January and February, but there’s no way to know whether these, and any other measures, will be enough to keep the company afloat.

Other than that, it’s been business as usual, with KTM announcing several new and updated models over the last few months, plus the adoption of new technologies such as  automatic manual transmissions

 radar-backed safety aids and tablet-sized infotainment screens (having 21% of your workforce working in R&D will do that). Whether these innovations will pay off will play a role in KTM’s fate.

 

ktm ag enters self administration to restructure debt

Things can turn around quickly if KTM manages to find a new investor. As of Oct. 11, Pierer Mobility ownership consisted of 25.0% in free flat shares and 74.9% controlled by Pierer Bajaj, which in turn is owned by Pierer Industrie (50.1%) and Bajaj (49.9%). Bajaj is an obvious candidate to step in with a larger investment, but if that was easily achievable, it probably would have happened already.

 

Photo by Rob Gray (Polarity Photos).

Red Bull has been a longtime partner in KTM’s motorsports programs, leading to speculation last week that the energy drink company’s owner, Mark Mateschitz may step in. Pierer Mobility was quick to shut that rumor down, releasing a statement on Friday denying any discussions with Mateschitz about acquiring a stake.

Of course, that leads us to the question of whether KTM’s racing efforts will go under the knife. GasGas is already ending its MXGP and MX2 and MotoGP factory programs, while both GasGas and Husqvarna are pulling out of rally racing. The KTM brand itself will continue in MotoGP and rally racing, Red Bull continue to provide sponsorship support, without any indication it intends to do more.

Barring a savior suddenly entering the picture, we’ll have to wait and see what Pierer and Neumeister can do to avoid bankruptcy.

Latest on KTM $$$

Near-Bankrupt KTM Owes $3 Billion, 'Pauses' MotoGP Program

Bradley Brownell

Mon, December 2, 2024

 

Photo: KTM

Austrian motorcycle giant and maker of the X-Bow sports car KTM is on the verge of bankruptcy and will begin a “self-administration” restructuring process to avoid dissolution. A big part of the company’s big money-saving efforts will see the MotoGP effort on the chopping block. KTM, which also owns motorcycle manufacturer Husqvarna and has a majority share ownership in MV Agusta and GasGas, says it will continue to race in MotoGP in 2025, simply tightening the purse strings and pausing race bike development, though there are concerns within the MotoGP paddock that the four-bike team will not show up next season.

Owing three billion dollars is a big hurdle to overcome for the motorcycle manufacturer and race team. How did it come to this? Well, across the first half of 2024 the company saw a huge 27 percent dip in sales and revenue. It does not seem that sales have improved for the brand over the second half of 2024, still in progress.

“Over the past three decades, we have grown to become Europe’s largest motorcycle manufacturer. We inspire millions of motorcycle riders around the world with our products,” says Stefan Pierer, chief executive officer of KTM AG. “Now we are taking a pit stop for the future. The KTM brand is my life’s work, and I will fight for it.”

“The enthusiasm of our employees is our most important competitive advantage,” says Gottfried Neumeister, co-CEO. “Their passion is the reason why KTM is globally synonymous with peak performance. We build our motorcycles reliably and robustly for every race, for every terrain. Now it’s about making the company robust. Robust for the future. So that we can quickly focus again on what we do best: building the coolest motorcycles in the world.”

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KTM posted record sales and profits across 2023, shifting 381,555 units worldwide and grossing $2.73B. The company had just signed a historic distribution and manufacturing deal with China’s CFMoto, and purchased most of MV Agusta. KTM expected continued growth in 2024, but interest rates remained higher than expected for longer than expected resulting in huge sales drops across the U.S. and Europe. Dealer inventory stacked up as KTM’s huge growth plan imploded around it, resulting in big discounts and longer payment terms driving down revenue. KTM’s sales decline is expected to continue while operating costs continue to rise.

Pierer Mobility, KTM’s parent company, has begun implementing a plan for the motorcycle and bicycle brands to continue without bankruptcy. By Austrian law the company has 90 days from the moment of announcement to come to an agreement with its lenders or face a forced restructuring. There are four key things KTM can act upon between now and February to keep itself in business: lay off a bunch of employees, reduce production by 25 percent to clear dealer inventory, streamline motorcycle R&D, and re-evaluate its bicycle division.

It isn’t just KTM’s racing efforts under the microscope, of course. Spanish brand GasGas is ending its MXGP, MX2, and MotoGP factory programs, and both GasGas and Husqvarna are pulling out of cross-country rally racing. KTM’s racing program, supported by Red Bull, will allegedly continue to exist, but for how long, and at what level?

Eli Tomac Adds Another Championship!

Tomac Tops Abu Dhabi WSX

Race One: The first race was madness. It was Vince Friese who got the holeshot and leading on the first lap. It was all going on behind him. Roczen was on the move but then was too impatient and hit the side of Friese. Savatgy was a bit more patient and got into the lead but then crashed. Tomac got a bad start but all of a sudden was ahead of Roczen but then the German passed him on the last lap. Friese held on to take an impressive win!

Race Two: It was Savatgy who took the holeshot with Friese sat in second. He had Roczen and Tomac right behind him but this time Friese had nothing for them as the pair quickly got into second and third. Savatgy had another crash – that was twice he has crashed out the lead. Roczen rode well to keep Tomac behind him at a track that’s very hard to pass on.

Race Three: It was Roczen with the holeshot but he had Savatgy and Tomac for close company. Savatgy was riding really well but just couldn’t quite get close enough to try and make a pass for the lead. With a lap to go on the final corner, Savatgy went straight on and went off the track. He can’t seem to have a race without any error but he is riding well – his mistake dropped him to third with Tomac up to second.  Breece had a great ride for fourth.

Superfinal: Tomac got the holeshot and cleared off at the front to clinch the WSX title in style. Savatgy was second before Roczen made a nice pass but by the time he got into second, Tomac was gone at the front. Roczen did enough to win the overall at the finale round.