More KTM trouble

Reading the article it seems to me that it might be actually a good thing for ktm. Sure the MotoGP team folding does not seem to be a good omen for racing but it is also the most remote form of advertising (no one can buy a MotoGP bike). Whereas the off-road racing section is a direct promotion of the bikes in the showroom. But maybe that will be reduced as well. If so, I would guess it is more likely to hit Europe than the US team(s). Because there is more ktm support in Europe than in the US. That is my perception at least.

I have to say I agree with the sentiment of cutting manager overhead. It’s never good to have too many fluffy people with vague job descriptions justifying their job. I experience this a lot in my industry (Pharma).

Wasn’t the MotoGP team already on the cutting-board in the near future? 

Cut/paste

Bajaj Auto has revealed plans to cut workforce by over 50% across several areas at KTM, including motorsport, as it inches closer to completing a takeover of the Austrian manufacturer.

Bajaj’s managing director Rajiv Bajaj stated in an interview that it intends to halve expenses across various departments in a move that will directly affect KTM and Tech3’s MotoGP teams.

“This is really low-hanging fruit. We observe an opportunity to reduce overheads by more than 50 per cent, including R&D, marketing (including racing), operations, and general administration,” Bajaj told CNBC TV18.

“The previous management has already reduced headcount from 6,000 to 4,000, which is still considered too high.

“Interestingly, of these 4,000, only about 1,000 are blue-collar; 3,000 are white-collar, which is perplexing because the blue-collar employees make the motorcycles.

“Future volume shifts will impact blue-collar employees relatively lightly; the issue will be with expensive white-collar headcount.

“It reminds me of Mark Zuckerberg's words about managers managing managers managing managers who manage the people who do the work. The management overhead and bureaucracy in this otherwise excellent organisation were astonishing.”

Rajiv Bajaj was outspoken in his criticism of KTM’s former management, though he stopped short of naming former majority shareholder Stefan Pierer, whom he largely holds responsible for the company’s financial collapse.

“We were all taken by surprise, most of the industry was quite shocked at how rapidly this developed,” he said. “My mind goes back almost 30 years to what my first management guru, Dr John Wallace, told me: the single biggest reason for corporate demise is corporate greed. I have really witnessed this play out at KTM over the last 12 months in particular.

“Broadly, I would say there were three types of greed.

“First, operational greed, best exemplified by what happened in the last couple of years when KTM Austria kept producing and overproducing, even though the spike in demand post-COVID had declined. As a result, KTM distributors and dealers worldwide were carrying over a year's worth of inventory, which was preposterous.

“Second, what I would call strategic greed. Companies often get into businesses they have no business getting into. In the case of KTM Austria, the best example was getting into the bicycle business, specifically the electric bicycle business.

“These two factors combined to take KTM to insolvency in a matter of months.

“Now, you might say that Bajaj was part of it, and I would concede that yes, we were also part of what went wrong, but as a minority partner, we could not prevent this.

“I can share that we did our best to resist it, so much so that it led eventually to the third kind of greed, which I may call governance greed, where certain decisions were taken either without our knowledge, without our information, or sometimes without following due process.”

Bajaj voiced confidence in KTM’s revamped management, as it charts its new course as a leaner and more efficient organisation.

“This is a problem not caused by 99% of KTM employees. This is a problem of the erstwhile top management of KTM, and most of them are gone,” he said.

“What we have now in place is a wonderful new team that I personally feel very confident about.

“The entire team is already in place, barring one vacancy, which will be filled in the coming months. It’s a combination of some of our older colleagues, who are still very passionate and committed to KTM, particularly in areas like product planning, R&D, and legal, and some outstanding new colleagues, led by our new CFO and new CHRO.”

From Kurt99s post and as I recall from several months ago…

Bajaj’s managing director Rajiv Bajaj stated in an interview that it intends to halve expenses across various departments in a move that will directly affect KTM and Tech3’s MotoGP teams.

“This is really low-hanging fruit. We observe an opportunity to reduce overheads by more than 50 per cent, including R&D, marketing (including racing), operations, and general administration,” Bajaj told CNBC TV18.

“The previous management has already reduced headcount from 6,000 to 4,000, which is still considered too high.

“Interestingly, of these 4,000, only about 1,000 are blue-collar; 3,000 are white-collar, which is perplexing because the blue-collar employees make the motorcycles.

While true, MotoGP is HUGE in the parts of the world that KTM sells all of their smaller bore street bikes. I agree that it's a good thing to cut and will save them a ton of money, but it does get their name and product in front of a lot of relevant eyeballs. 

to the OP, you should delete this thread as this is already known, called restructuring. Your behind the 8 ball. Oh, and Sexton is riding a Kawasaki next year encase you didn't know

Yeah I don't see anything wrong there, only good. There's a modern shortsighted trend where businesses refuse to leave sales on the table, because you can either scale your businesses to handle every sale possible in high times and risk going broke in low times, or you can scale your business to survive the low times and in doing so will be leaving sales on the table in high times. Because once you get to a certain size, lethargy sets in, and the ability to scale up and down with the market is lost. That's what happened to KTM, imo, they basically outgrew themselves and lost the early dynamism that was key to their success. Shrinking will put them in a much better place as far as sustainability is concerned, and from there hopefully they can build more thoughtfully. 

So, it appears that SP might have been large problem from the onset!  How about that! Many scoffed when that was brought up for discussion a year ago (or so) and the gang here battered incessantly those who thought SP was a concern. Life goes on………

I just bought a used 2015 KTM 500 XCW with only 90 hours on. I have owned more KTM’s and Husaberg’s than I care to count.

These are good changes for the company, especially the (perhaps)   …..”managers managing managers managing managers who manage the people who do the work.”…………… 

I really want an 890 Adventure R but I can't do it given the current uncertainty. I really hope they make a strong comeback.

I'd just buy it, but maybe buy a used one so that it opens up eBay as a potential parts source.