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Indeed. Not to mention the management and administration of each company.
I have heard the margins on the minis is bad
Thanks. I agree with Weege that it is a fair question in light of the silence from KTM NA. At the same time he said he talked to Roger D and John Hinz and those conversations were obviously on the record. I wonder why Weege hasn't put out a story instead of a quick reference on a podcast that it took me a while to find? lol
Same, I've heard several times over the years they sell them at a loss or close to it
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How can KTM North America claim they’re profitable so there’s no problem? Whatever funny money statistics a creative financial guy will twist can make that seem plausible but the parent company bears the brunt of development and liability costs. KTM NA isn’t paying raw material costs, production R&D, manufacturing costs, etc. KTM NA has arguably the easiest job within the company: Sell a popular, successful final product through an established dealer network and operate amateur/professional racing programs without blowing the budget.
This sounds like your kid running a small business out of your basement and claiming great profits while you pay the mortgage and utilities. What happens when the house goes in foreclosure?
Are you referring to the margins between KTM AG and KTM NA, or between KTM NA to the dealers?
I don’t think any of the moto reporters are educated in business enough to parse the info and come up with something concise and informative. It’s a job for a business reporter.
KTM AG and KTM NA.
Kinda like a loss leader at a grocery store. Take a slight loss on the kids bikes with the hope that it keeps dad riding full price orange bike.
I agree on the lost leader thing but I would guess the big payoff is replacement parts. They sell a ton of small bikes and those bikes famously eat parts like crazy.
They make up for it in clutch parts sales..😂
not on the electrics.
Ah the ink jet printer business model
I work for the NA division of an EU company. Our site pays fees back to the parent company for use of their technology. We do most of the development work here and pay for it out of NA sales. Those NA specific suspension settings that KTM and Husky use (Gasgas gets the EU settings) are probably developed by KTM NA by staff they pay for. KTM NA is not necessarily responsible for the financial issues affecting the parent company. To use your analogy: Imagine your kid's lemonade stand buys lemonade ingredients from you for more than you paid and then they still sell at a profit. It is not your kid's fault you blew too much money on a new car.
If the company that owns you goes under the courts can claw back what they see fit. It's not like KTM NA is an independent entity.
Yeah I’m confused since when did we make KTMs in NA? So if the factory goes under KTM NA could have a Honda team?
Technically it is, it's one of their many subsidiaries.
BP
Maybe I should have said independently owned entity..
If it true I do not know but I heard they have around 60.
I do understand that KTM NA probably has a bigger role than what I originally stated but no one can possibly believe that they’re insulated from this because their department is turning a profit. I worked at a few dealerships that had a profitable service department but sales and parts losses ultimately closed them down. Back to your lemonade stand analogy: The kid can be mad all he wants that his business was successful and it’s not fair but ultimately he has to move because his parents lost the house. I guess he could stay and try to negotiate with the new homeowners.
Pit Row
I don't know the number but that is not far fetched.
They did say in court that some of them are likely to also fall into insolvency.
IDK if they are just trying to keep broing down with everyone, but them acting like it's all fine because KTM NA is a "separate entity" was maybe one of the worst takes I've ever heard from them. I think their main goal is to not hurt their access to the team because clearly JT and Steve aren't dumb enough to think it's all gonna be just fine. (Or they are extremely ignorant of the facts)
KTM NA definitely has exposure to this up to whatever % the KTM AG owns. The saving grace could be that whoever the ultimate deciders end up being focuses on all the other underperforming subsidiaries/assets to fulfill the debt obligations because they don't want to kill the golden goose that can help get the company back to profitability as fast as possible.
KTM NA employed about 360 people in 2023, that's about 6% of PMG employees.
Is it wrong to assume that separate entities (like KTM NA, KTM racing department...) are unburdened by the debts of their parent company and not directly affected by the restructuring of the parent company?
Of course if PMG fails KTM NA or KTM racing have no object anymore but they could still be sold independently from the restructuring of the parent company (thinking about racing here)?
Pierer likes racing so much maybe he will buy them and keep going like The Terminator.
I wonder if right now they would prefer Sexton not winning and them saving the big payouts
How about ktm figure out if they are going to be paying contingency or not.
They’ve already announced they are
Outside of San Diego SX things are continuing to go down hill for the PMG. They are sending all their in house motorcycles to auction. Their Virginia warehouse is at full capacity and they have no space in the Ohio or California warehouse. If your into auctions you will probably be able to find a smoking deal as they are selling all the bikes as a packaged deal.
Can you buy individual bikes at auction or do you have to buy a certain quantity?
Are these bikes owned by KTM NA? Looking for short term funding to keep the doors open?
Post a reply to: KTM to file for Bankruptcy/ Self Restructuring on Friday