Sometimes, bad news beats the pace at which BDN can deliver such troubling information through your letterbox. Our December issue carried a litany of excuses from Europe’s largest motorcycle manufacturer, KTM parent Pierer Mobility. It had not only failed to produce third-quarter financial results but had also cancelled all previous guidance issued for full-year 2024 prospects and stripped its executive boardroom of extraneous senior management.
The legion of excuses spanned everything from painful macro-economic trading conditions, the stagnating European economy, a collapse in US motorcycle consumer purchasing power and absence of imminent recovery.
De-stocking excess dealer inventories across a range of markets had become urgently imperative. Commitments to support both dealers and suppliers had eaten into working capital and pushed up both net debt and the associated interest expense burden.
Pierer admitted to falling short of expectations in terms of revenue and earnings. The company had already sacked its chief financial officer Viktor Sigl, and four more executive directors were shown the door in October, leaving only supremo Stefan Pierer and recently recruited Gottfried Neumeister as joint chief executives sharing the otherwise empty boardroom.
A full review of circumstances was due to be carried out by the end of the year. But that promise became obsolete before December’s BDN reached your desk. During the final week of November, Stefan Pierer and his co-CEO Gottfried Neumeister declared that Pierer Mobility and, therefore, its wholly owned KTM subsidiary were effectively insolvent, and they had applied for judicial restructuring proceedings through a 90-day administration period.
Pierer’s corporate implosion didn’t stop there, though. On 12 December, the company also announced that it was aborting a nine-month relationship in control of MV Agusta because the premium Italian brand no longer fits into the Austrian parent’s “long-term strategy” if such a thing actually exists now.
This will apparently involve shipping about 2000 unsold MV Agusta models built in Austria to MV’s Varese plant in Italy for disposal. Management will presumably revert to erstwhile Russian Sardarov family ownership, leaving them to cope with inevitable financial cut-backs, distribution collapse and redundancies to stay afloat.