KTM halts motorcycle production due to lack of parts

Despite an approved restructuring plan, motorcycle maker has halted production. This is due to a lack of critical parts for its range of motorcycles, reports German portal 1000PS.

From the report, KTM will only resume production till after July 27. KTM has been unable to source production parts and no orders were placed for new parts during a three month period during its ongoing financial crisis.

During the first production halt, KTM entered self administration to avoid bankruptcy proceedings, while employees were laid off and some racing activities were stopped. News of the production stoppage came during a video call where KTM CEO Gottfried Neumeister told employees, “due to serious supply chain problems, it is impossible to continue production as planned. Stocks were only sufficient for around 4,200 motorcycles, and now there is a shortage of essential components. Production in Mattighofen will therefore be suspended until 27 July.”

KTM’s attempts to restart production last month were met with caution from some suppliers, with some reported to have halted further production for KTM altogether, as reported by rideapart.com. KTM’s parent company, Pierer Mobility, currently faces a financing shortfall of around six hundred million euros (RM2.95 billion), which comes due in May.

In the video conference, Neumeister also said, “to avoid terminations, KTM is taking drastic measures. From May 1 to 31, a new company agreement applies from 1 July, which provides for a 30-hour week for around 3,000 employees in Austria. Wages are adjusted accordingly.”