The crisis at Austrian motorbike manufacturer KTM is worsening, with the company unable to pay its 6,000 employees the previously promised November and December salaries.
The situation was disclosed by the Austrian Chamber of Labour on December 13.
KTM had originally vowed to pay its workers a 90 per cent advance on their December salaries before Christmas. The November salaries and the Christmas bonus, amounting to another month’s salary, have similarly not been paid, said Andreas Stangl, president of the Chamber of Labour.
The motorcycle manufacturer had not commented on the situation at the time of writing.
The company has also stopped production of new motorbikes as of December 13 – earlier than originally planned. The production lines will remain at a standstill at least until March as KTM tries to sell off its inventory of 130,000 bikes – almost a year’s worth of production.
Employees have also been told they must take pay cuts of more than 20 per cent during that time.
KTM is Europe’s biggest producer of motorbikes but has faced headwinds since 2023, as the continent’s continuous economic malaise has erased demand for its products.
At the same time energy and labour costs have soared. Consequently, the company has amassed €1.8 billion in debt, according to creditor protection agency KSV.
On November 26, KTM declared it was facing insolvency and applied for restructuring at the commercial court in Linz.
The downfall of Europe’s major motorcycle maker has caused anger and despair around Mattighofen in Upper Austria where KTM’s main plant is located. At least 750 of the 3,600 employees there are to be let go.
The crisis has affected other companies in the area. On December 13, KTM supplier VMG Metall, a producer of cast metal parts employing 134 staff, declared insolvency.
