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KTM crisis: "MotoGP is not in danger". Or at least one hopes

Hubert Trunkenpolz doesn't question the project in MotoGP, but it costs 40 million euros and the wind tunnel test was canceled

MotoGP: KTM crisis:

After the unpleasant news of the last few days and weeks in connection with the economic decline of the Pierer Group - with the motorcycle brands KTM, Husqvarna, GASGAS and a 50.1 percent share in MV Agusta Motor - a new piece of bad news was announced today. Yesterday, insolvency had already been admitted and a “high three-digit million amount” is missing to meet all the claims. Insolvency must therefore now be filed for. It was already known that 300 more employees would lose their jobs and that production in Mattighofen would be shut down in January and February in order to reduce stocks. The company is now to be thoroughly restructured, but around 4000 more employees could be fearing for their jobs. 

But company boss Stefan Pierer emphasizes: “The KTM brand is my life's work, and I am fighting for it.Smug Chamber of Labor officials in Upper Austria are now accusing Pierer of management errors. The management under Mr. Pierer cannot be put beyond dispute either, otherwise there would have been no need to file for insolvency, they criticized on ORF television. 

Employees are now hoping to receive their wages and salaries for November and December as well as their Christmas bonus, which in Austria is equivalent to a whole month's pay. The Insolvency Compensation Fund will step in to help with this blow, but it could be several months before payment is made. However, KTM plans to bring forward the wages and salaries for November and December and pay them out after the opening of insolvency proceedings next week. After that, wages and salaries will be paid as normal, a KTM spokesperson explained. 

Many GP fans are now asking themselves whether the Austrian manufacturer will be able to meet its obligations in motorcycle GP sport as planned, from the Red Bull Rookies Cup to Moto3 and Moto2 and the two MotoGP teams. At the Austrian GP in August, CEO Stefan Pierer informed Dorna CEO Carmelo Ezpeleta that serious cost-cutting measures and a serious restructuring program had been decided at Pierer Mobility due to the sharp drop in demand and the slump in sales in the motorcycle business as a result of the adverse global conditions (inflation, high interest rates, impending recession). It not only includes significant job cuts, but also the withdrawal of Husqvarna and GASGAS from cost-intensive GP road racing and other series after the 2024 season. 

The GP teams and Dorna have been assured that the focus will return to the core KTM brand in future and that the other two brands will be repositioned. GASGAS is to be given a youthful touch, while Husqvarna is to be positioned primarily in motocross and enduro.

The entry of GASGAS into GP racing was hastily decided at the 2022 Mugello GP, although the number of units sold at the time did not actually justify such a 10 million euro commitment. But with the slogan “GET ON THE GAS”, sales figures were to be boosted in a short space of time. At the same time, it was announced that the Spanish off-road manufacturer GASGAS would bring a full range of road bikes to dealers in 2024. However, this plan never materialized. As a reminder, only 31,651 GASGAS motorcycles were sold in 2022. One year later, sales fell to 29,532 GASGAS machines. The picture was similar at Husqvarna: 67,462 Huskys were delivered in 2023, compared to 75,266 in 2022. At this point, the alarm bells must have started ringing in Mattighofen. Sales of the two newly acquired brands fell short of expectations. 

When the Japanese factories used aggressive marketing campaigns in the highly competitive US offroad market in the current 2024 financial year to sharply reduce the market shares of KTM, Husqvarna and GASGAS, a valuable part of the revenue was lost. And KTM's core offroad business will not become any easier in the future due to the market entry of strong new competitors such as Ducati, Triumph and Fantic. 

Looking back, it is difficult to understand why the Pierer Group was still vehemently trying to get two additional MotoGP slots from Dorna for the Red Bull Ajo team in the summer of 2023, who would have preferred to compete with the Spanish MotoGP Red Bull Dream Team Marc Márquez and Pedro Acosta in 2024. The Pierer managers also turned down requests from Gresini and RNF to take over two slots last year. Gresini remained with Ducati, RNF was later taken over by Trackhouse Aprilia.

To date, the Pierer Group continues to plan all racing events for 2025, with the Dakar Rally starting with three KTM factory riders in around five weeks' time. The Sepang MotoGP test is also being prepared as planned, but there are also quiet warning signals. A MotoGP wind tunnel test planned for this week in Cologne has been canceled.

Incidentally, the majority of Pierer's racing activities are handled by the Swiss-based KTM Racing AG.  The expenditure in motorsport has taken on enormous proportions: In 2024, Pierer Mobility AG still employed more than 60 works riders and more than 500 team members for the four brands (including CFMOTO). In 2024, 13 more world championship titles were won, and KTM has now clinched 348 world championships.

Despite the announced cost-cutting measures, 16 KTM riders from eight teams are still on the entry list for the 2025 Moto3 World Championship, while Honda equips ten riders. However, the costs in the Moto3 class are largely covered by the teams and sponsors. In Moto2, Pierer is relying on the successful Aspar Martinez and Red Bull Ajo KTM teams in 2025. They will be using Kalex motorcycles.

In total, the Pierer Group's financial expenditure in GP racing is estimated at 40 million euros, with energy drink giant Red Bull reliably contributing between 10 and 15 million. At the presentation of the MotoGP customer team Tech3 in February 2019, Stefan Pierer put the annual costs at a total of 30 million euros. 

Can the two teams (Red Bull Factory with Binder and Acosta, Red Bull Tech3 with Viñales and Bastianini) still compete in the MotoGP class in 2025 with the planned expenditure? And at the same time KTM must develop the new 850 cc engines for 2027 plus complete the task of running 100 percent synthetic fuel.

This intention was last announced to all those involved at the World Championship finale in Barcelona (November 15-17) and has been reaffirmed time and again since then. The slogan “Ready to Race” conveys the DNA of KTM, and this strategy will not be changed.  KTM board member Hubert Trunkenpolz, who also acts as CEO of MV Agusta, answered the question from gpone.com at lunchtime today as to whether the MotoGP plans can be continued without significant financial cutbacks with a succinct “yes”. 

Dorna CEO Carmelo Ezpeleta also has full confidence in the commitments of the long-term partners from Austria and is convinced that he will be able to continue to provide the usual spectacle with eleven MotoGP teams and 22 riders in 2025. The rival factories from Ducati and Aprilia to Yamaha are also keeping their fingers crossed for the Austrian competitor. 

After Suzuki's withdrawal at the end of 2022, there are only five MotoGP manufacturers left. The same number is involved in the Superbike World Championship, where Ducati, Honda, Yamaha, Kawasaki and BMW compete, but manufacturers such as Suzuki, MV Agusta, Aprilia, Bimota and Benelli have withdrawn. It is undisputed that the booming MotoGP World Championship does not need a scenario like 2010 and 2011, when Suzuki, Aprilia and KTM were absent and only 17 regular riders competed on Yamaha, Honda and Ducati before the starting grids had to be filled with inexpensive rolling chassis from companies such as Suter, ART, FTR and Ioda with significantly inferior superbike racing engines during the claiming rule era in 2012.

In the Innviertel region in Upper Austria, there is confidence that the stocks of around 70,000 to 100,000 unsold motorcycles (most of which are 2025 models) can be reduced by the production stop in January and February. There are also 80,000 bikes in stock. 

As a “restructuring expert”, Stefan Pierer has already proven several times that he can steer a company back into calm waters in stormy external conditions such as the 2008/2009 banking crisis and during coronavirus. And his new co-CEO Gottfried Neumeister proved his worth during the Covid crisis at the globally successful Viennese catering company Do&Co, when he skillfully led the group, which was on the verge of bankruptcy, back to prosperity after 2020. He came on board at Pierer Mobility in September 2024 and, together with Stefan Pierer, is now trying to avoid the worst in negotiations with banks, partners such as Bajaj, creditors and authorities. By March, Pierer will have a financial requirement “in the high three-digit range”. There is talk of 500 million euros. 

Pierer Mobility AG intends to use the insolvency proceedings to agree a restructuring plan with its creditors within 90 days. “Redimensioning the group should not only secure the continued existence of the KTM Group, but also create the basis for emerging stronger from the proceedings,” says Pierer Mobility, which sold 381,555 motorcycles in 2023. 

Stefan Pierer: “Gottfried Neumeister has brought impressive experience and a breath of fresh air and has made a significant contribution to addressing the current situation. I am convinced that together we will get the company back on track for success.

Gottfried Neumeister, Co-CEO of KTM AG: “The enthusiasm of our employees is our most important competitive advantage. 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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