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No, the banks will find other ways to make their money back, equity in the business, of higher interest rates on future loans.
What do we expect to find out on Jan 20th?
If the debtors agree to the plan for restructuring Pierer Mobility, and continue trading or if Pierer Mobility ceases trading and goes into bankruptcy, selling assets to the highest bidder.
I think it's that they find out if they get 2/3rds of their creditors to accept the 30% of what's owed them deal or they go the insolvency route
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I wonder how KTM is going to carry producing bikes in Austria if a metal foundry who has supplied parts for them is gone? It's going to take some time and money to transfer molds to a another factory and get them set up ready for producing parts again
You're right, no specific mentions of motocross, they've focused on MotoGP (+Moto2+Moto3) which represents roughly half the cost of PMG total racing program.
Sorry, first I thought they needed the agreement of creditors owning 2/3 of the debt, then I saw on the Austrian gov website they just mention creditors owning majority of the debt so over 50% it is.
Second court hearing is on January 24th for PMG to present their restructuring plan, then PMG will have an extraordinary general assembly on January 27th to put said plan into motion and 3rd and final hearing will be on February 25th when creditors get their final vote.
It takes 2 weeks to get molds made in China, all they need are the drawings.
Pierer Mobility and dealers have enough stock to last 12 months, they don't need to hurry to restart assembling bikes.
Those molds are crazy expensive even in China. New molds require a lot of machining time and design resources to make sure that the part dimensions are correct after cooling. Nobody makes them in two weeks. The usual lead time is around 6-8 weeks and cost could be several hundred thousands a piece depending on the part size and complexity. But what do I know because I only have been working as a design engineer for past 16 years...
And by the way no manufacturing company is carrying 12 months stock these days. Newer heard of JIT and LEAN manufacturing that everybody is using these days? Google if you don't know
Edit: Looks like one part which WMG is manufacturing one piece casted KTM swingarms which are marvelous piece of engineering art. The swingarms are made by die cavity casting technique and would imagine tooling for those is extremely expensive due large size and size and complexity. https://www.vmg-metall.at/
Selling the foundry is a bad omen my friends. It's like a dairy farmer selling the cows.
How much experience do you have sourcing molds manufactured in China? You will be surprised at the lead time and price with some suppliers.
If you haven't been following the news, Pierer Mobility's demand went down, but they keep producing, they may run JIT or LEAN manufacturing for parts internally, but not for bikes produced, they manufactured to a budget target, not market demand, they are significantly overstocked, that's what go them in this mess!
I have been taking part of several molded parts design and sourcing process and it has newer been under six weeks from China even with most simplest parts. There are quality processes with must be passes before approving the mold for serial production which includes sample patch testing and measuring and these are common industry practices which everyone uses here in Europe and I think KTM is not any different in that aspect.
And what comes to over stocking parts should be nearly impossible because in the first place there's no physical room for that big parts inventory and the purchasing process is tightly controled by ERP system which won't allow you purchase any more parts when the certain level is reached in the parts inventory.
Well atleast the swingarm isn’t a crucial piece 😂
KTM uses SAP as their production controlling system which is monitoring their parts inventory and sending inputs to purchasers to buy more parts when their inventory minimum has been reached which is usually just few weeks worth of parts. https://www.all-for-one.com/en/company/news-press/detail/index_3523.html
Rider safety related components like the swingarm must pass a series of test and complete PPAP process before the par supplier can be changed.
I said it before, you pay your employees first...nothing comes before this. This is the #1 rule of any business that relies on labor to build your product or service the company. I have lost any respect I had for this company that puts funding a race team, wherever the funds come from, before paying the people who build the product that is being raced. Oh, you can't buy groceries or pay your mortgage...because, we need to go race. Oh, don't be late for work BTW.
The employees are being paid
The ones that were laid off this week won't be for long, unfortunately.
Pit Row
I'm no expert on parts procurement (and it sounds like you are), but won't it be hard to find new vendors if they just got done stiffing their current ones?
Yeah it's not a quick task and can easily take up to six months before the supplier change process is fully completed.
I may have this wrong but didn't some court fund or someone pay their Nov/Dec incomes that KTM couldn't pay? They will sit at home in Jan and Feb and now March I read somewhere with what is a 30 hour paycheck? I don't think they gonna go hungry but I get your point.
I know a lot of them are losing their job entirely due to the reduction of an entire shift. That said, I would love to sit at home and not work for 3 months and receive a 30 hour check. That is better than most any u.s. state pays for unemployment. I hope the best for these people, I lost my job back in 2007 after 18 years service. Our company had fallen so low that trough it all and the sell off I got one week of severance and then good old Alabama Unemployment at $220 a week. I was married with two teenage sons. Its a scary time when you don't know your future. It eventually gave me a much better future but 17 years ago it scared the shit out of me.
I'm hoping the company sticks around but I'm moving away from the company. They make good stuff but their parts are high as shit and are already difficult to get at times. I bough a new 25 CRF250 for my grandson for Christmas. I'll be selling my Austrian stuff (23 gg 250f, 23 gg 125).
To me, their shits harder to work on anyway. What tf is' up with those freaking circlips? Jesus Christ they had my fingers sore for 3 days? lol
This is correct. Your laying off the people who help sell bikes. But are putting the racing teams first. Mean while you have managers and people working on the race teams making 6 figures plus. This people need to be cut back or let go. Racing should be cut back to save the people who move the bikes at the dealerships.
They have stopped production for a minimum of 2 months. When they'll (hopefully) restart they'll go from 2 to 1 shifts. As a consequence, they've fired hundreds of workers.
They have massively overproduced, they need to reduce production, unfortunately they need less workers on the production lines. Nothing in this would change if they were to fire hundreds more workers from the racing department.
As gharmon says, the remaining production guys are actually compensated by the equivalent of 30 hours per week contract to stay at home for 2 months.
So race team employees don't count? They are relying on a paycheck with families to support as well
Race teams don't exist unless someone builds the bikes.
Bikes would not sell without advertising and success in racing is the best advertisement for selling dirt bikes. KTM has a problem with unsold bikes so they have get them sold before they can start to worry about producing new ones. That's not a good news for factory workers but that's how the situation currently is and there's no way around it.
. . . and those bikes that get built don't sell unless you market and promote them.
Again, dirt bike racing barely leaves a mark on KTM's finances but plays a huge role in their sales. They need sales reeaaalllyyyy badly right now.
But it's interesting that they only took ownership of the 60-year old company in September, when PMG was already deep in financial straights. I wonder what the story behind that is.
Bikes aren't selling anyway. Plus, you are putting the cart before the horse. You have to have/produce the product before you can sell or race the product.
They sold a bunch of bikes last month here. Zero factory racing going on.
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