On November 29th, 2024, KTM AG (in Mattighofen,) and its two subsidiaries, KTM Components GmbH (in Munderfing) and KTM Forschungs- und Entwicklungs-GmbH (Research & Development, in Mattighofen) had to file for insolvency proceedings on November 29th, 2024, after liabilities of between 1.8 and 2 billion Euros had accumulated. This dilemma was also due to the fact that the inventory had increased to 130,000 unsold motorcycles and production had not been reduced in time despite the gloomy outlook.
Recently, further bad news has come to light in connection with Europe's largest motorcycle manufacturer. While they admitted in October that there was an urgent financial need in the hundreds of millions, the profit warnings and losses became increasingly dramatic and threatening on a weekly basis in the days that followed. At lunchtime on Friday, December 13th, they had to admit that, besides the wages for November and the Christmas bonuses (which corresponds to a whole month's wages), the wages for December could not be paid either. Shortly before that, they had announced that 750 jobs in Upper Austria would be terminated, but Pierer had at least made a binding promise to the workforce that the December wages would be paid.
As recently as 2023, KTM was still considered an Austrian model company, and the head of the company, Stefan Pierer, was celebrated as an exemplary successful entrepreneur. After all, he had taken over the bankrupt KTM factory before 1992, with an annual production of 6,000 bikes and 150 employees, and sold a record number of 381,555 motorcycles in the 2023 financial year with the brands KTM, Husqvarna, GASGAS, and MV Agusta.
KTM management initiated the restructuring and cost-cutting measures too late, because the 2023 annual report already sent out clear warning signals. Profits had collapsed and after, around twelve years of mostly double-digit growth rates, the number of units sold only increased by 1.6%, despite extensive investments in motorsports and in the new brands acquired.
Now, Pierer Mobility board members, Stefan Pierer and Gottfried Neumeister, both of whom have made a name for themselves in the past as "restructuring experts", are facing additional problems. The Austrian Financial Market Authority (FMA) is examining whether the listed parent company, Pierer Mobility, complied with the disclosure regulations before the Innvi motorcycle manufacturer, KTM, went bankrupt.
The FMA confirmed a relevant report of the nachrichten.at on-line portal with the Austrian Press Agency (APA) yesterday. Specifically, it involves the period from May to November 2025 during which the guidance - namely, the forecast of business figures - was adjusted and a change in the board of directors was announced.
Listed companies, such as the Pierer Group, must publish insider information immediately, in order to make it available to as many market participants as possible at the same time. If these rules are violated, penalties could be imposed.
The financial holding company, Pierer Mobility, was asked to make a statement. No further details have been disclosed, so far. And estimating how long this FMA review will take is not possible.
The first creditors meeting will take place on December 20th. By February 25th, the insolvency proceedings will determine whether KTM's bankruptcy can be prevented and whether the numerous creditors (including approximately 1.3 billion Euros KTM owes to 180 banks) will be satisfied with a quota of 30% and the hope that KTM can make a successful new start when restructuring after 2025, with the sale of 250,000 motorcycles and a reduction in workforce of 3,700 employees.
Numerous motorsport fans around the world are also eagerly awaiting the decision as to whether or not, and to what extent, the Pierer Group can continue to manage motorsports in 2025.
The costs for GP Racing (Red Bull Rookies Cup, Moto3, Moto2, and MotoGP) are estimated at around 40 million Euros, with an additional 30 million estimated for off-road events (Dakar Rally, Motocross World Championship, US Supercross, US Outdoor Cross, and Enduro).
So far, preparations for the Dakar and MotoGP World Championship with the two teams, Red Bull KTM Factory Racing (with Binder and Acosta) and Red Bull KTM Tech3 (with Bastianini and Viñales), are continuing as planned, although cuts are being made in all areas and all expenses in terms of personnel, travel costs, and materials.
The Husqvarna and GASGAS brands will no longer be seen in the GP paddock and at the Dakar Rally in 2025. GASGAS will also no longer compete in motocross events, and Husqvarna - as a traditional off-road brand, with an impressive 130 world championship title wins - will only be involved in the MX scene.
The catchy slogan, "Ready to Race", is inextricably linked to KTM's success. No fewer than 348 World Championships have been won to date,:13 in 2024 alone.
Decades of sporting activities have contributed significantly to the fact that the motocross and enduro motorcycles from Austria are still considered the "benchmark" in motocross, enduro, and rally racing worldwide, but Ducati and Triumph, as new competitors, now want a big piece of the pie.
At Red Bull in Salzburg, they have been watched with excitement as to whether KTM can continue its race to catch up with Ducati in the premier class for the upcoming season with the strongest quartet of riders in the company's history, after two second places in the 2023 and 2024 Constructors World Championship.
Red Bull managers still remember 2004, when head of Red Bull, Didi Mateschitz, took over the Jaguar Formula 1 racing team for a bargain price from Bill Ford Jr. in November 2004. Ford had to lay off 4,000 employees at its engine plant in Dagenham (England) and, therefore, could not justify managing the F1 team, which swallowed up more than 100 million Pounds and, in any case, did not get beyond a 7th place in the Constructors Championship.
The continued existence of KTM's two MotoGP teams, and also restarting its core business, will depend on the restructuring plan presented by Pierer, on the concessions of the creditors, on the question of whether or not the 48%-major shareholder in Inda, Bajaj Auto, will contribute fresh capital, and on whether or not entrepreneur Stefan Pierer will raise a three-digit million Euros sum from his own funds to save his life's work.
When KTM, with Brad Binder (2 wins) and Miguel Oliveira (5 MotoGP wins), was initially ridiculed as a hopeless off-road specialist in the premier class because of its steel frames and WP suspension, it really gave renowned MotoGP factories a hard time from its third year onwards. KTM manufacturers had, more than once, stated that Stefan Pierer was, at first, not impressed by the MotoGP plans of his advisors Hubert Trunkenpolz, Pit Beirer, and Heinz Kinigadner, and brusquely rejected them.
Stefan Pierer recalled that KTM had already gone into bankruptcy before 1992 and, therefore, decided not to take on the giants from Japan in the MotoGP, even though the street models from Upper Austria were selling well.
But Pierer had already thwarted KTM's first MotoGP experiment with 990 cc V4 engines in July 2003 because of the impending costs of approximately 25 million Euros per year. The Roberts team secured these engines in 2004, up until the Brno GP in August. There, on the Thursday before the first training session, due to financial discrepancies between Mattighofen and the Roberts team, they were quickly loaded into a van and brought back to Austria.
But, during his business trips, especially to Asia and America, KTM board member Hubert Trunkenpolz noticed that KTM's Moto3 successes were not attracting any attention, despite 27 GP victories in row against Honda and the title wins by Sandro Cortese and Maverick Viñales in 2012 and 2013.
That is why Trunkenpolz, Beirer, and Kinigadner drank a glass of wine before the 2014 season, giving themselves some courage to, once again, convince Stefan Pierer of the MotoGP plans.
This time, Stefan Pierer agreed.
Motorsport Director Pit Beirer began to put out feelers for technicians and managers for these ambitious plans at the 2014 Mugello GP, and drew up a timetable and a concrete budget.
The first roll-out of the KTM RC16 took place in Spielberg in October 2015. Mika Kallio made KTM's first wild card appearance in Valencia in November 2016, while 2017 saw the start of the first full season with Pol Espargaró and Bradley Smith, both poached from the Yamaha Tech3 team of today's KTM partner, Hervé Poncharal.