The Tech3 team has been assured that KTM’s flagship MotoGP programme will remain ‘untouched’ despite the company facing a major financial crisis.
Earlier this week, Pierer Mobility Group revealed it is in discussions with both owner Pierer Bajaj AJ and existing creditors to secure bridge financing in the “three-digit million range”.
The company’s sales had dropped by 27% in the first half of 2024, while it has also been reported that the bike market would not perform as well as expected in the second part of the year.
In response, Pierer Mobility AG has reduced the number of people who sit on its board from six to two. There have been job cuts elsewhere as well, with 309 people laid off in Upper Austria in the first half of the year, and a further 200 people losing their jobs in August, mostly in Austria.
Now, just a few days after announcing the need for more funds, the Austrian marque has announced further cost-saving measures. Up to 300 further layoffs are planned, while production is to be stopped in January and February and working hours will be reduced.
In motorcycle assembly, the number of shifts will be reduced from two to one. The production lines will then be completely shut down at the beginning of 2025. Around 1,000 workers will stay at home for two months and receive a salary for a 30-hour week.
Measures have also been taken to reduce inventory as sales in Europe and the USA fell short of expectations. Sales figures in the electric bicycle segment were also a cause of worry, with warehouses reported as full. Production is scheduled to start again in a single-shift operation from March.
The company's net debt has soared from less than 300 million euros at the end of 2022 to as high as 1.5 billion euros in mid-2024. KTM’s share price has lost around 90 percent of its value since its peak in February 2022.
It remains to be seen how Pierer Mobility Group’s financial situation will impact its motorsport programmes. From a marketing perspective, the focus is back on its primary brand KTM, with GasGas and Husqvarna taking a back seat. For example, only three KTM drivers will compete in the 2025 Dakar Rally in January.
The MotoGP programme, the largest and most expensive of all for the company, is currently not at risk.
"It's never good news when you read something like that, of course," Tech3 team boss Herve Poncharal told Autosport's sister title Motorsport-Total.com.
"But if you look at the entire mobility industry, everyone is suffering. The German car brands have always been very strong and now we see what is happening at Volkswagen. This has never happened before. Everyone is suffering financially - the car industry and the motorcycle industry."
"I have great respect for [KTM chiefs] Stefan Pierer and Hubert Trunkenpolz.
"I spoke to Hubert a few days ago. He told me that the worst is over. They told me that they are confident that they have made the right decisions.
"Now they have to make painful decisions. This concerns the number of employees, the reduction of production capacity and price cuts in order to reduce inventory. These are the biggest difficulties at the moment."
“There are effects on racing, but they told me that they don't want to touch MotoGP. Because that would be a mistake because MotoGP is the flagship. Those are the words of Stefan and Hubert. They are the bosses.
"I prefer listening to them rather than reading an article in the newspaper. I ask the source. They assured me that I have nothing to worry about. Yes, they suffer and they have to make painful decisions, but that's part of running a company. Life has its ups and downs."
Next year, Tech3 will again represent the orange colours of KTM, having promoted the company’s GasGas brand in 2024.
At the beginning of 2021, KTM extended its contract with MotoGP promoter Dorna Sports to participate in the championship until the end of 2026.
