What happens if KTM goes bust?
- Thread starter Trackday
- Start date
So they may still be hosed. They need to come up with almost 600M USD in three months and many of the suppliers they used to have that just got 30% of their A/R paid with almost zero hope for more will probably tell KTM to f off and expect no more shipments. Especially when KTM seems to have done nothing to address the immense fundamental problems. Giving them any credit would be good money after bad. COD only (or maybe even work down from a retainer) and KTM has no money to do COD.
Yeah if I was a KTM supplier I'd be ******, but...
KTM also has them in a position, where they can say (without saying it), "Well, if you keep supplying us, in the future we can pay it back... but if you don't keep supplying us we definitely won't be around to pay you back." So... bit of a rock and a hard place for the suppliers unless they're willing to walk away from that kind of money out of sheer principle.
And if they're a corporation trying to maximize shareholder value, do the suppliers care more about principles or do they care more about what's best for business?
KTM also has them in a position, where they can say (without saying it), "Well, if you keep supplying us, in the future we can pay it back... but if you don't keep supplying us we definitely won't be around to pay you back." So... bit of a rock and a hard place for the suppliers unless they're willing to walk away from that kind of money out of sheer principle.
And if they're a corporation trying to maximize shareholder value, do the suppliers care more about principles or do they care more about what's best for business?
If they can't pay me COD, I'd be out. I'm not throwing more money at them in the hopes I get a little bit of past money back. Sending them more stuff that costs me money and they don't bother paying for would not be happening. PS, there was inflation while you were out of commission, prices are now 10% higher for you.
This same crap happens every time any company goes through administration (or restructuring or whatever you want to call it). Creditors and suppliers eat some of the losses and what happens next, varies. Some companies may be captive suppliers, organised as a separate corporation but with KTM as their sole customer, or maybe they have other customer channels (e.g. WP Suspension, which is a KTM supplier, but you can buy their products outside of KTM). If they're tied to KTM for most or all of their production volume, that's going to severely limit how much they can tell the mother ship to eff off. They just have to eat the debt and factor that into how they price their future captive sales to KTM. (Makes KTM's costs go up)
Went through this a few times through my career - in which a bankrupt company that was still operating under administration still wanted something done. If they went bust owing us money, we had to eat that (unsecured creditor). Our existence wasn't tied to their continued operation, so those jobs got quoted and then sent over to accounting for them to figure out and let me know when we could proceed (i.e. they paid us up front). Although we weren't allowed to recover unsecured debts, suffice it to say that any quotes for jobs they needed done under administration (cash up front) were priced out "adequately". If someone else wanted to do it cheaper (or not demand cash up front) ... they could have it. Having worked for free already, I wasn't going to do it any further.
Went through this a few times through my career - in which a bankrupt company that was still operating under administration still wanted something done. If they went bust owing us money, we had to eat that (unsecured creditor). Our existence wasn't tied to their continued operation, so those jobs got quoted and then sent over to accounting for them to figure out and let me know when we could proceed (i.e. they paid us up front). Although we weren't allowed to recover unsecured debts, suffice it to say that any quotes for jobs they needed done under administration (cash up front) were priced out "adequately". If someone else wanted to do it cheaper (or not demand cash up front) ... they could have it. Having worked for free already, I wasn't going to do it any further.
Relax
Well-known member
I'd be more interested in how current Victory owners feel about keeping their bikes and their experience with parts availability. If KTM was in fact going bankrupt and it was the end of the line for the LC8 models, I'd probably snap one up based on my experience with my own 990 LC8 as well as all of my other discontinued bikes with limited parts availability. Where there's a will, there's a way!
First, I think there is still value in KTM, and someone is going to keep it going in some form.
If BMW buys it it will be for the off road models, particularly the dual sports and the 690. Everything else will drop.
The new 390's built by Bajaj will come to market, I saw GP Bikes has the new 390 ADV on their website for around 8K as a pre-order. The off road bikes and the DS 350/500 are certainties I think along with the big single, though production quantities probably will be ratchetted down.
The question is street bikes. They don't (and NEVER did) need 790 and 890 versions of the same basic platform. Given the the cam failures of that platform do/should they continue with it or just sell it off to CF Moto? Do they sell enough of the Super Duke range to keep it? I know they work well, but they have to be the ugliest think on 2 wheels this side of a Suzuki Madura.
The Lc8 v-twin is a well sorted motor and has proven to be reliable, and the ADV platform is well done so do they continue with the ADV bikes?
I think their plan coming out of restructuring will be:
Spin off Gas Gas trials bikes and discontinue other production.
Husqvarna will continue with the dual sports, and the inline twin models. (I would have discontinued all Husky)
KTM will keep the off road models relatively untouched, but may stop with the special editions and the models that cannibalize sales from each other. All parallel twins with be discontinued, maybe offered only as Husky. The 1390 Super Duke and Adventure will continue without the SDGT and the street focused Adventure. Depending on government subsidies and requirements the battery electric dual sport will continue.
And the Super Dukes will continue to be Super Ugly.
If BMW buys it it will be for the off road models, particularly the dual sports and the 690. Everything else will drop.
The new 390's built by Bajaj will come to market, I saw GP Bikes has the new 390 ADV on their website for around 8K as a pre-order. The off road bikes and the DS 350/500 are certainties I think along with the big single, though production quantities probably will be ratchetted down.
The question is street bikes. They don't (and NEVER did) need 790 and 890 versions of the same basic platform. Given the the cam failures of that platform do/should they continue with it or just sell it off to CF Moto? Do they sell enough of the Super Duke range to keep it? I know they work well, but they have to be the ugliest think on 2 wheels this side of a Suzuki Madura.
The Lc8 v-twin is a well sorted motor and has proven to be reliable, and the ADV platform is well done so do they continue with the ADV bikes?
I think their plan coming out of restructuring will be:
Spin off Gas Gas trials bikes and discontinue other production.
Husqvarna will continue with the dual sports, and the inline twin models. (I would have discontinued all Husky)
KTM will keep the off road models relatively untouched, but may stop with the special editions and the models that cannibalize sales from each other. All parallel twins with be discontinued, maybe offered only as Husky. The 1390 Super Duke and Adventure will continue without the SDGT and the street focused Adventure. Depending on government subsidies and requirements the battery electric dual sport will continue.
And the Super Dukes will continue to be Super Ugly.
Agree with most of this, except for the 890.
Maybe it's where I'm living right now, but that 890 ADVR seems to be the most popular bike KTM is selling. Everyone and their stepbrother has one and it's the Golden Child/Second Coming according to the motorcycle press, even despite the cam issues. If there's one bike KTM will want to keep it will be that. Second to that is the 690 Enduro.
Ryan is on top of it.
