KTM has once again ceased production at its Austrian facility due to a shortage of essential components and parts required to continue manufacturing. Employees were informed of the decision on Thursday by the company’s new CEO, Gottfried Neumeister. They were also told about a 30-hour workweek with a wage cut.
- KTM halted production again after building only 4,200 bikes
- The shortage stems from the ongoing insolvency proceedings
- KTM will implement a reduced 30-hour workweek with pay cuts.
KTM halts production again within six months
The brand is suffering from a shortage of capital and components
Earlier this month, we reported that KTM had recently resumed production at its Mattighofen plant in Austria. However, after managing to produce just 4,200 motorcycles, the brand has once again ceased production, effective April 28. This is due to supply chain disruptions resulting in a shortage of essential components needed to continue manufacturing.
The shortage stems from the ongoing insolvency proceedings initiated by the company in November. As a result, KTM employees have not been authorised to place orders for components from external suppliers. Some suppliers have stopped producing KTM components, anticipating a complete collapse of the brand. Others are facing financial difficulties themselves, partially due to their reliance on KTM.
KTM’s supply chain spans dozens of countries – from Eastern Europe to China. Delivery times in Asia have also been significantly delayed since the COVID crisis, sometimes taking up to a year after an order is placed.
In addition to halting production, KTM’s CEO announced that the company will implement a 30-hour workweek from May 1 to July 31, accompanied by a wage cut. This measure is intended to avoid further layoffs.
Source: GPOne.com
Hormazd Sorabjee
Anurag Chaturvedi
