Bajaj set to cut more jobs at KTM
These are tough times for KTM, with its majority shareholder, Bajaj, making some painful decisions to keep the brand afloat.
If you’re a KTM employee right now you may want to think twice about getting your kids any really expensive presents for Christmas. Things are moving very fast as the brand’s majority shareholders are pushing for big changes and big cuts.
To bring you up to speed, just in the last few weeks we’ve learned that KTM’s production schedule is all out of whack, that it has killed GasGas’ motorcycle production in Spain, that the name of its parent company has changed from Pierer Mobility AG to Bajaj Mobility AG, and the head of Bajaj – KTM’s majority shareholder – thinks that “European manufacturing is dead.”
Amid all this, we’re now hearing that Bajaj is eager to cut costs by upward of 50 percent at KTM – largely by showing KTM management the door.
“So far what we observe is that there is an opportunity to reduce the overheads by more than 50 percent,” Bajaj Managing Director Rajiv Bajaj told India’s CNBC-TV18 recently. “That covers R&D, that covers all marketing areas including racing. That covers all the operational areas.”
Bajaj had harsh words for KTM’s corporate culture and places most of the blame for its difficulty on them.
“This is a problem that isn’t caused by 98 per cent or 99 per cent of the KTM employees,” he said, “This is a problem of the top management of KTM.”
To that end, Bajaj says that his team have spent the last few months taking the axe to KTM management, but that the number of management positions is “still too much.”
He says that staff numbers have dropped from about 6,000 people to 4,000, but “In this 4,000 people, only about 1,000 people are blue-collar… That’s really perplexing, because it’s the blue-collar that make the motorcycles.”
Bajaj argues that the company needs to be dramatically streamlined, and seems to suggest that most of the managerial roles should move away from KTM’s home of Mattighofen, Austria to “India or otherwise.”
Certainly it’s true that KTM got itself into a mess. Before Bajaj arrived earlier this year with a rescue deal rumoured to be worth €800 million (roughly £704 million), the company was a financial disaster, with some 265,000 unsold bikes in its inventory.
There are signs that it plans to push forward – for example, rumours abound of a Brabus 1400 set to arrive at EICMA – but clearly KTM is not out of the woods yet. It will be interesting to see what KTM looks like when the dust finally settles.
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Chris Cope is a fourth-generation journalist, originally from Texas. He has lived in the UK for roughly two decades and has been writing about motorcycles for most of that time. He has written for dozens of publications and websites in the UK, US, Canada, and Australia.
