Is KTM being flushed down the bog? Or can somebody roll up one sleeve and fish them back out of the U-bend like Ewan MacGregor in Trainspotting? Let’s investigate what’s going on with the Austrian brand.
– What’s happened?
The owners of KTM started acting like the people who buy their bikes. The management team got hugely into debt, made a lot of stupid purchases that they couldn’t afford, and filled the place with loads of bikes that would never be wheeled out of the garage. This has caused the company to file for “Self-Administration” which is one step away from bankruptcy.
– It can’t have been all their fault, can it?
Yes, it was pretty much all their fault. Of course, it didn’t help that manufacturing in the whole of Europe is being destroyed by energy prices that are soaring due to the ruling elite’s insistence on worshipping at the altar of the pig-tailed doom goblin. Austria is basically an offshoot of the German economy, which has suffered a windmill-induced off-throttle highside and is now plunging headfirst towards the tarmac.
– What next?
KTM bosses have to thrash out a deal with the banks that they owe an obscene amount of money to.
– Presumably the banks will just say OK, we’ll do what KTM wants because we’d rather have 30% of what we’re owed than end up with 0%? Kind of like a has-been motorcycle racer becoming a rider manager to ill-advised youngsters instead of falling back on his kindergarten level of education and ending up penniless?
What on earth makes you think that the creditors would get 0% if KTM went bankrupt? Factories in Austria are worth money, machine tools are worth money, designs and Intellectual Property are worth money, famous brand names are worth a ton of money. Plus KTM have around 100,000 unsold bikes worth over a billion Euros cluttering up the dealership floors.
– Wait, so the point of this Self-Administration isn’t to stop the banks walking away with 0% of what they’re owed, it’s to stop them walking away with maybe 20% by going all Gordon Gecko on the company: shuttering the factories, firing everyone and selling everything on AliExpress?
Ding-ding-ding! We have a winner!
– So this is a tad more serious than some of the wishful thinking that has been going around?
Hell, yeah.
– Where can we find out more about this?
We can’t. We’ll have to wait until the official agreement is reached with KTM’s investors. Or not. But you could read a book (lol!) and check out Tom Wolfe’s snarky novel “A Man In Full” which deals with an arrogant, rich geezer running his company into the ground. He thinks he can run rings around the bankers that he owes a ton of money to, then discovers that the specialist bankers who deal with potential bankruptcies are like sharks with piranhas for teeth.
(Unlike certain other news sites, MGPNews is happy to dispense reading recommendations. In the off-season, anyway. Hell, if that’s too highbrow for you then just read Hopper’s autobiography, it’s great).
– What does this mean for KTM in MotoGP?
KTM’s involvement in the premier class was always a ludicrous act of hubris. They’re a dirt bike company that sells smallish amounts of naked road bikes to adolescent hooligans of all ages. They don’t sell a single model that can be raced in World Superbike or even World Supersport. And partly thanks to Dorna’s catastrophic failure to control the MotoGP rule package, there’s virtually no technological relevance for the bikes that KTM actually sells. They hardly sell anything with a fairing, never mind frigging wings.
– How can KTM afford to race in MotoGP, then?
They can’t. But since it’s the head honcho’s vanity project, he might manage to pull off a deal that involves doing a MotoGP program on the cheap using their sickly sweet, highly caffeinated beverage sponsorship money and a strictly limited amount of KTM’s own resources.
– Would you agree to that if you were one of the people that KTM owes money?
Of course not, I’d tell them to sod off and stick to Dakar and MXGP. We’ll just have to hope that the specialist bankers dealing with this potential bankruptcy decide to act like a bunch of fluffy kittens.
– Jack Miller really got himself flung out of KTM at the right time, didn’t he?
Yeah, if he hadn’t chosen these exact two seasons to be absolutely rubbish, who knows what might have happened? Really makes you think.
