KTM, KTM, KTM. When will this all end for KTM? Honestly, that's super unclear, as it was recently discovered that the Austrian manufacturer wouldn't be able to pay back the 600 million euros in debts next month, a timeline a figure it had negotiated with its creditors when it restructured its business after nearly going insolvent. That in itself would be cause to further worry about the brand's future.
However, things go from bad to worse, as after restarting production at its Mattighofen factory just last month, but not telling the public which models it'd begin producing again, it's shutting down the whole place once again. Not only that, it's shutting down the factory until the end of July. Basically, the factory will have been closed for a whole year without producing motorcycles—which, honestly, might be good given how many they still have on dealership lots.
Well, that's not great.
The news comes directly from newly minted CEO Gottfried Neumeister who called the brand's factory employees and told them that the factory would be halting production. According to German outlet 1000PS, "The employees received the news on Thursday morning via video message from CEO Gottfried Neumeister: Due to serious supply chain problems, it is impossible to continue production as planned. The stocks were only enough for around 4,200 motorcycles, now there is a lack of essential components. Production in Mattighofen will therefore be suspended until 27. July suspended."
KTM has still yet to state what models those 4,200 motorcyles were.
However, according to the report, the issue is based around KTM not being able to source critical components for its motorcycles. Basically, when production stopped last year, no new parts orders were being made. And when production began again, those parts suppliers that KTM once worked with weren't really willing to trust that KTM could pay its bills, especially since its insolvency proceedings are still ongoing, as well as its restructuring.
Now, I'm not sure how that was overlooked at the time of production restart. It's a pretty simple math equation based on available parts, and parts suppliers saying, "Nah, bra, this doesn't feel right. Get your house in order and then we'll talk." I, personally, probably wouldn't have restarted production to the fanfare KTM put out, but that's just me.
There is a glimmer of hope however, for KTM's workers, as 1000PS states, "To avoid terminations, KTM is taking drastic measures: From 1. May to 31. A new company agreement applies from 1 July, which provides for a 30-hour week for around 3,000 employees in Austria. Wages are adjusted accordingly." That means layoffs are unlikely, at least for the time being.
KTM is also hoping production will resume in July, however, that's dependent on securing the requisite money to pay back creditors and finding enough money to entice parts suppliers once again. I will say, the fact that KTM states it can't come up with the requisite money to pay back those same folks is likely to continue to hurt its parts supplier relationships.
As with everything KTM, stay tuned to RideApart as we breakdown all the latest information coming from the listing ship.
