It’s déjà vu in Mattighofen, Austria, where KTM has once again shut down its production lines, this time until at least the end of July. The official reason? A lack of parts. But more specifically, there’s not enough cash to pay for parts.

Workers learned of the production shutdown last Thursday via a video message from KTM’s new CEO, Gottfried Neumeister, who attributed the halt to “serious supply chain problems.” 

And yes, in our most recent update in March, it looked like Pierer Mobility, KTM’s parent company, was back on solid footing and on track to return production to previous levels after months of idled production lines as the company worked through the fallout from its insolvency filing in December 2024.

The initial shutdown of production was part of a court-supervised restructuring procedure after KTM could not meet financial obligations totaling around €2.2 billion. Leadership changes were also part of the overhaul, with longtime CEO Stefan Pierer stepping down and Neumeister taking over in a move aimed at restoring stability and investor confidence. Around the same time, Pierer Mobility sold off its stake in MV Agusta, shedding a non-core asset to refocus resources and bolster liquidity as it fought to stay afloat.

After months of turmoil, an end-game vote was held in late February, during which KTM’s creditors approved a plan that gave Pierer some breathing room, agreeing to accept 30 percent repayment on qualified debts. 

Under the terms of the deal, Pierer then needed to raise €600 million by May 23rd in order to stay in compliance with the court-approved proposal, with plans  to raise the necessary capital through new shares and a loan-to-equity swap with major shareholder Bajaj.

With that plan of action in place, KTM was able to secure just enough liquidity — about €50 million — to restart production lines that had been sitting idle since late 2024, with ambitious plans to return to full single-shift production across four lines within three months.

However, due to KTM not being able to order new parts during the insolvency proceedings, the temporary restart in March led to the assembly of only about 4,200 motorcycles, using whatever parts inventory was left on hand. To make matters worse, some of the critical parts needed have delivery times of over 20 weeks.

One major sticking point appears to be a growing lack of supplier confidence. Many of KTM’s vendors, still wary after last year’s insolvency filing, are now demanding upfront payment before shipping any components. And with KTM still scrambling to raise fresh capital, the company simply doesn’t have the cash on hand to meet those demands. 

The next key step in Pierer’s recovery plan had been set to take place at an upcoming special shareholder meeting that was set for April 25th, where shareholders were to vote on two major funding proposals: a €150 million cash injection through new shares, and a €200 million debt-to-equity swap tied to a loan from Pierer Bajaj AG.

But in a last-minute twist, both measures were pulled from the agenda. “The measures…cannot be implemented under the conditions required by law and within the specified timeframe,” Pierer Mobility said in a statement. With the clock ticking toward the hard May 23rd deadline, the company is now scrambling to secure alternative financing, possibly by pledging shares as collateral for a loan.

The urgency is real. “Without the necessary liquidity, [the ability to continue operating normally] cannot be ensured,” Pierer warned in a restructuring update. Simply put, if Pierer can’t raise the required €600 million in time, bankruptcy could be back on the table.

The human cost of the crisis has already been significant. During the insolvency proceedings, KTM’s workforce was sharply reduced, with nearly 830 jobs lost across its main company and subsidiaries. That included about 486 layoffs at KTM AG alone, along with cuts at KTM Components and KTM’s research and development arm. Additional staffing reductions are still expected later this year if the company can’t stabilize.

In the meantime, KTM is trying to limit further damage by cutting back hours instead of resorting to more layoffs. Starting May 1st, about 3,000 employees in Austria will move to a 30-hour workweek, with pay adjusted accordingly. The company is also stepping away from distributing CFMoto and Zeeho models in Europe, a move aimed at narrowing its focus to core brands as it works through the ongoing crisis.

For KTM fans and the broader adventure community, it’s unsettling to watch one of the most dominant names in the motorcycle world wrestle with so much uncertainty. Whether the orange king finds its footing again or stalls out for good will depend on what happens over the next few critical weeks.

Author: Jamie Elvidge

Jamie has been a motorcycle journalist for more than 30 years, testing the entire range of bikes for the major print magazines and specializing in adventure-travel related stories. To date she’s written and supplied photography for articles describing what it’s like to ride in all 50 states and 43 foreign countries, receiving two Lowell Thomas Society of American Travel Writer’s Awards along the way. Her most-challenging adventure yet has been riding in the 2018 GS Trophy in Mongolia as Team AusAmerica’s embedded journalist.