Stefan Pierer leaves KTM: A new beginning after bankruptcy!

Stefan Pierer leaves KTM: A new beginning after bankruptcy!

Stefan Pierer, who has shaped the Austrian company KTM since 1992, gives the lead and will leave the board of KTM AG. This is done in the middle of a difficult renovation process after the insolvent KTM AG had to register bankruptcy again, which is the second bankruptcy in the company's history. Pierer described the KTM brand as his "life's work" and now withdraws as a shareholder after the renovation plan was accepted at the end of February. In this turbulent time, Pierer Gottfried Neumeister determined as the successor while leaving the business.

ktm was founded in 1953 as a crown-tire-drunk Mattighofen and celebrated its first motorcycle production in 1992 under Pierer's lead. After a first bankruptcy in 1991, in which the company was divided into four companies, Pierer's vision KTM led to the stock exchange and relied on innovative products. From 2001 to 2019, the company was able to drive in numerous victories at the Dakar Rally and expanded its portfolio significantly through strategic takeover such as the Husqvarna brand in 2013. During his term in office, Pierer also laid subsidies, including 4.5 million euros for the KTM Motohall, which was controversial.

change of power at KTM

Now the Indian Bajaj Group takes over the complete control over Pierer Bajaj GmbH, subject to regulatory permits. This step is significant, since Pierer Bajaj GmbH is currently holding 74.18 % at Pierer Mobility AG, the parent company of KTM. Bajaj has been a silent minority shareholder since 2007 and is now becoming a strategic main shareholder. The company provides KTM AG a loan of 450 million euros, while a further 150 million euros from Pierer Mobility AG benefit for payments to the KTM companies.

These financial means are necessary to stabilize the company after bankruptcy and to enable restructuring. Verena Schneglberger-Grossmann will enter the team under CEO Gottfried Neumeister as a new member of the board and thus support the withdrawal of Pierer from the board.

The challenges of bankruptcy

kTM has increased debts in billions in billions, which have increased through massive investments, internal management problems and current economic challenges, such as global inflation and disturbed supply chains due to covid-19. This has led to a decline in demand, especially in Europe and the USA. In order to survive this crisis, savings are required, which could probably lead to the deletion of around 1,500 of the 4,000 jobs. The model portfolio is also tightened, with a focus on more profitable models.

The bankruptcy represents a turning point in the history of KTM and has far -reaching consequences for the entire motorcycle industry. However, experts believe in opportunities for KTM if the company is strategically restructured and suitable investors can be obtained. The signal to other manufacturers could be clear: it is time to check business models and face the current challenges.

The business change at KTM and the associated decisions will undoubtedly influence the entire industry, while Pierer, who has played a crucial role in the history of KTM, withdraws from active business.