As you saw in the last video, news is coming in thick and fast about KTM and the future of the Pierer Mobility Group. I got the shock announcement about them going into administration just as I was publishing the last video so couldn’t include all the details and as before there has been more revelations since.
We got a bizarre joint statements from chief executive Stefan Pierer and CEO Gottfried Neumeister via youtube addressing their company’s workforce of more 5000 employees,
Can you imagine your thoughts as a KTM employee, hearing the company was going into administration via a youtube video?
Does the arrogance of Steffan Pierer know no bounds?
They announced that the business was to enter administration on 26 November, and that this will be part of “a comprehensive plan to navigate current financial challenges” and ensure “a robust future” for KTM.
Pierer said: “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. Now we are taking a pit stop for the future. The KTM brand is my life’s work, and I will fight for it.”
He continued.
“KTM is now facing significant hurdles and to address these, KTM has begun a legal restructuring proceeding with self-administration. The application will be submitted on Friday 29 November, with the goal of concluding the process within 90 days.”
Pierer then went on to introduce his new yes man and managerial partner Gottfried Neumeister, saying,
More Corporate Waffle
“Since September 2024, Gottfried Neumeister has joined the executive board as co-CEO. He 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.”
So lets get this straight, with all the experienced staff who know the KTM company inside out, he called in an outsider with no experience of the company, who only he knows, to make sure he could push through any decision he wanted with no opposition.
Neumeister added
“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.”
wait a minute, if “our employees are our most important competitive advantage” then why are they being thrown to the wolves while you still pay yourselves dividends?
And as to “ We build our motorcycles reliably and robustly” I can tell you there are a lot of 790,890 and Norden owners who would refute that. What about them?
Anyway,
Pierer and Neumeister just continued with more corporate waffle telling us how they were the people to take KTM into the future, even though it was Pierer who has dragged them into the depths they now face.
The background of these developments was news that Pierer Mobility Group’s revised full-year 2024 financial results would reveal an operating loss of considerably more than €200 million Euro figure they had previously published. And it would therefore be seeking an urgent injection of fresh capital.
So, The what they were hiding question I asked in the previous video, was that the financial figures would be much worse than anyone already knew or expected.
Shortly after there was another article on the 29th of November and Enduro 21 wrote
No Consequences For Customers?
KTM update: “No consequences for customers”
and this has obviously come from a statement sent to the dealer network.
It read,
“KTM customers have no need to fear any negative impacts following the announcement earlier this week”
And that Pierer Mobility, the parent company of KTM AG, are in a period of self-administration beginning Friday November 29, 2024.
It continued that,
“Nothing will change for our customers,” and “We guarantee that we will continue to deliver motorcycles, spare parts and accessories under the usual conditions. There will be no irregularities, either in the flow of goods or in customer service.”
Remember what I said before about if Steffan Pierer, If he says it, it probably isn’t true?
And there was a new bombshell, that amid huge losses. The unsecured claims were now estimated to amount to 2.3 billion Euros which, is a figure that is massive when compared to the value of the company assets.
This was where we got the news that Pierer Mobility Group had also filed an application for insolvency proceedings for its subsidiary KTM AG at a regional court on Friday, November 29.
KTM is applying to the court for self-administration restructuring proceedings.
Then we got the announcement that read,
“All of this also does not affect the rolling out of new models in 2025”, “That includes new bikes such as the 125 and 390 Enduro R, and the 390 Adventure models.”
“These models will be delivered in the first quarter of 2025 as planned”
But, they make no mention of the MX bikes, 990, 1390 or Freeride E.
In fact, all the bikes they do mention are actually bikes built by Bajaj group.
Through all the recent activity and statements from Pierer Mobility there has been no mention of the other brands under the KTM AG umbrella, ie, Husqvarna, GAS GAS and MV Agusta, but I do have some news on that later.
Are You Reassured?
Enduro 21 added,
“it is reassuring to know the dealers and parts will be unaffected for those of us riding the orange, red and white bikes.”
Are you reassured? I know that i’ve heard enough of PMG’s corporate nonsense to know as I have said before, if Steffan Pierer has said it, it probably isn’t true.
There will be some decisions or changes to come during or shortly after this 90-day period of administration, can we assume that all the brands will be affected equally and that “KTM” really means all the brands within the Pierer Mobility Group?
Despite statements saying that racing remains a priority for KTM we have already seen changes during the latter half of 2024.
Husqvarna and GASGAS Factory Racing teams have evaporated in MotoGP and Rally and there are remarkably few statements about Dakar so far.
Undoubtedly there will be more changes to come.
We did get a slightly different angle from the German financial press.
You can see in the slide the headline from Die Presse.
Massive Debts
The headline reads, KTM Insolvency, Almost 4 billion Euros in Liabilities, What Happens Now”
So, despite the official PMG press releases talking about a debt in the hundreds of millions, then the statement about The unsecured claims estimated to amount to 2.3 billion Euros we can now reveal that the debt is well over 3 billion Euros.
Let us be clear here, that means that all along, Steffan Pierer has been lying to everyone about the size of the financial black hole that he has created.
Perhaps that revelation is the reason Bajaj Group and Mark Mateschitz the Red Bull heir walked out of discussions with him?
Rumors says Bajaj offered to take over KTM AG, but that the offer was rejected, but they are just rumours.
Interestingly, this article specifies that KTM AG and 2 subsidiaries have applied to the regional courts for insolvency proceedings, so we have to surmise that is Husqvarna and Gas Gas as well as KTM.
So we do finally get some news on the subsidiaries. Does this mean MV Agusta are escaping for now?
The article is also specific about the hundreds of employees who will be laid off before the end of the year.
Another headline in Kronen Zietung states that it is in fact KTM AG who have been seeking further financial backing, but that all efforts failed in raising the 650 million Euros that would have been needed to avoid filing the administration order at PMG and the insolvency paperwork for KTM, Husky and GasGas.
So the pit gets deeper and the news darker with every video it seems.
I take no pleasure in being right about my thoughts on the PMG groups activities, and I hope that some sort of rescue is still possible, but day by day that seems ever more unlikely.
All I can say is I hope we get some better news soon.
I will keep you posted when I know more.
will it be Husky or MV Agusta who have avoided the chopping block for now at least?
Thanks for the support and as always I look forward to hearing your comments.
Ride Free everyone.