is KTM going to the gallows?

[p6x]

Stellantis is jettisoning its CEO Carlos Tavares.

In case you did not know, Stellantis owns all the following brands:

-Abarth, Alfa Romeo, Chrysler, Citroën, Dodge, DS, Fiat, Jeep, Lancia, Maserati, Opel, Peugeot, Ram Trucks, and Vauxhall. Some of these brands are not exported from Europe.

Things are not going too well in the mobility departments in Europe.

The EEC leaders have maybe contributed to the crisis in enforcing laws to make ICE cars obsolete, when the customers are not ready to move on.

NorthVolt, the Suedish company Europe's was betting on to move away from Chinese made batteries has declared bankrupcy, and will also go through a restructuration program.

It seems like the entire mobility industry, 2 wheels, 4 wheels is going through changes with unpredictable future.

Meanwhile, our V11s are still going strong!

[HRC_V4]

On 12/1/2024 at 2:10 AM, Lucky Phil said:

You know when I started my aviation career the managers were all people that worked their way up in the organisation, knew the detail of everything and when they got to management level they managed to avoid chaos and catastrophes. Then came along "professional manager" you know people with MBA's and business degrees and it all went to hell as they made short term decisions aimed at looking good on their resume. They often had a "throw the deck of cards into the air and see what lands" philosophy because then they could all get together in their MBA club and "crisis manage" the situation they had in fact created. It was truly pathetic to observe. My original managers managed to AVOID a crisis and the new ones managed to help create them so they could look like the guy that rides in and takes charge and "sorts it out". 

Phil   

I saw the same thing at the company I retired from. We had this one old time engineer that knew almost everything about one of the businesses I worked for. I enjoyed working with him, learned a lot from him. He could tell you what it would take to fix a line and how much it would cost from the top of his head. I watched all the MBA managers stab him in the back and go over his head because he kept disagreeing with them and proving them wrong.  They finally forced him out in a RIF (reduction in force). I retired not long after that.  Also, the CEO is a one trick pony, every time the company was going to miss numbers, he would announce another RIF and a bigger stock repurchase, his only concern is Earnings per Share, a total BS measurement...

Edited December 2 by HRC_V4
Spell

[GuzziMoto]

14 hours ago, p6x said:

Stellantis is jettisoning its CEO Carlos Tavares.

In case you did not know, Stellantis owns all the following brands:

-Abarth, Alfa Romeo, Chrysler, Citroën, Dodge, DS, Fiat, Jeep, Lancia, Maserati, Opel, Peugeot, Ram Trucks, and Vauxhall. Some of these brands are not exported from Europe.

Things are not going too well in the mobility departments in Europe.

The EEC leaders have maybe contributed to the crisis in enforcing laws to make ICE cars obsolete, when the customers are not ready to move on.

NorthVolt, the Suedish company Europe's was betting on to move away from Chinese made batteries has declared bankrupcy, and will also go through a restructuration program.

It seems like the entire mobility industry, 2 wheels, 4 wheels is going through changes with unpredictable future.

Meanwhile, our V11s are still going strong!

Surely none of us were in the room, but it sounds like he quit. As I understand it, Tavares main stick was cost cutting. Cost cutting can be needed, but often it hurts more then it helps. This could be a good thing for Stellantis in the long run. Tavares was driving Stellantis into a ditch.

[p6x]

2 hours ago, GuzziMoto said:

Surely none of us were in the room, but it sounds like he quit. As I understand it, Tavares main stick was cost cutting. Cost cutting can be needed, but often it hurts more then it helps. This could be a good thing for Stellantis in the long run. Tavares was driving Stellantis into a ditch.

I think the "he quit" was a diplomatic way to comment on his departure. In any case, he knew already his mandate would finish on january 2026 without any possibility of reconduction.

Carlos Tavares was very successful as PSA CEO. He turned the company around, and with his strategy of cost cutting and price increases, he did pretty well.

He continued to be extremely successful with Stellantis throughout 2023.

The big reckonning came in 2024. Especially in the US, where the Chrysler, Jeep, Dodge prices increased so much the vehicles remained unsold. But the debacle was not only limited to the US market, but everywhere else.

The largest share holder of the holding, representing the Agnelli (FIAT) familly, was in open conflict with Tavares on the strategy. I think the cost cutting works when there is an obvious surplus, like with PSA. But when you completely gut your company, then you may affect the profitability.

Carlos Tavares was a bit like Elon Musk in his management psychology. I watched some testimonies from the leaders that got fired. One said he got fired just because he reported disappointing sales figures.

Edited December 2 by p6x

[GuzziMoto]

28 minutes ago, p6x said:

I think the "he quit" was a diplomatic way to comment on his departure. In any case, he knew already his mandate would finish on january 2026 without any possibility of reconduction.

Carlos Tavares was very successful as PSA CEO. He turned the company around, and with his strategy of cost cutting and price increases, he did pretty well.

He continued to be extremely successful with Stellantis throughout 2023.

The big reckonning came in 2024. Especially in the US, where the Chrysler, Jeep, Dodge prices increased so much the vehicles remained unsold. But the debacle was not only limited to the US market, but everywhere else.

The largest share holder of the holding, representing the Agnelli (FIAT) familly, was in open conflict with Tavares on the strategy. I think the cost cutting works when there is an obvious surplus, like with PSA. But when you completely gut your company, then you may affect the profitability.

Carlos Tavares was a bit like Elon Musk in his management psychology. I watched some testimonies from the leaders that got fired. One said he got fired just because he reported disappointing sales figures.

He was already heading towards the door, his stint was for a designated time. But he decided to leave before he was supposed to, it sounds like he said screw this. As to his time there, he has led Stellantis downward. Things during his time there have been getting worse, with even solid brands like Jeep showing serious signs of struggle. While from a numbers point of view he was successful until recently, from a car company point of view Stellantis has been having issues for a while. A quick search would no doubt find plenty of other people with skin in the game that are saying good riddance to him.

He is a classic example of a CEO who thinks he doesn't need to understand the business he is CEO of. He seems to lack real car knowledge and is instead a numbers guy. He doesn't seem to know cars, he knows numbers. He is not alone, many current CEO's of car companies don't seem to know cars. They instead focus on the numbers, trying to drive up profitability. Instead, they should be focused on the product, on the cars. Make better cars and profits will come. Focus on profits and the quality of the cars tends to suffer. That leads to long term issues with profits that initially may have gone up, with profits declining down the road. He has likely stuck around at Stellantis too long already, most guys like him leave before the longer term negatives of their business decisions come to fruition. He is not the only CEO like that. But he does seem to be like that.

[Lucky Phil]

Here's a thought. Modern CEO's and boards are focused on value to the shareholder and fight the employees over every 2 cents and benefits to reduce costs. When times and business gets tough as it inevitable will for long term companies the first group to jump ship and leave are the shareholders and who's needed the most in those times? The Employees that's who. There's zero loyalty from 99% of shareholders. Value your people for it's them the business will need in the long term to ride out the peaks and troughs should be the mantra for modern executive management.

[guzzler]

7 minutes ago, Lucky Phil said:

Here's a thought. Modern CEO's and boards are focused on value to the shareholder and fight the employees over every 2 cents and benefits to reduce costs. When times and business gets tough as it inevitable will for long term companies the first group to jump ship and leave are the shareholders and who's needed the most in those times? The Employees that's who. There's zero loyalty from 99% of shareholders. Value your people for it's them the business will need in the long term to ride out the peaks and troughs should be the mantra for modern executive management.

That's it in a nutshell....

[gstallons]

I wish I had something good to say......

[audiomick]

On 12/1/2024 at 2:18 PM, gstallons said:

70% of all lawyers on Earth live on the N American continent !

Way off topic, I know, but....

I heard some years ago that about 60% of the literature in the entire world about tax laws deals with German tax laws.

There have been some attempts to simplifiy the tax laws, but there is a profession called "Steuerberater" (tax advisor) which is very well organised, and doesn't want the laws to get simpler.

 

[p6x]

I found an interesting article that explains it with facts; here's the link: https://motomatters.com/analysis/2024/12/02/ktm_insolvency_and_motogp_what_we_know.html

If the information below is correct, KTM owes a total of 2.9 Billion Euros. This is astronomical!

Quote

On Friday, Pierer Mobility Group, the parent company of KTM, filed bankruptcy protection procedures (under Austrian law, judicial restructuring proceedings with self-administration) for three of its subsidiaries:

• KTM AG, the motorcycle division comprising the brands KTM, GASGAS, Husqvarna, and MV Agusta
• KTM F&E GmbH, a separate company which houses KTM's R&D department
• KTM Components GmbH, another separate company which produces a range of parts for KTM.

KTM AG had a turnover of €1.96 billion in 2023, with a profit of €108.9 million. In the insolvency filing, the company is listed as having 2380 employees, assets of € 316,872,061, and debts of €2,739,654,000, owed to 1,624 individual creditors.

KTM F&E had a turnover of €164.8 million in 2023 and made a loss of €9.3 million. It had 1320 employees in 2023. It had debts of €105,450,000 with 566 creditors, and assets of €14,959,625.

KTM Components had a turnover of €235.4 million and profits of €7.5 million in 2023, and employed 530 people. The company had assets of €15,963,047 and debts of €79,123,000 owed to 332 creditors.

Just under half of the debts of those three companies, totaling over €2.9 billion are owed to Austrian banks, around €1.3 billion, according to Motorsport Total Another €365 million is owed to suppliers.

Edited December 3 by p6x

[gstallons]

11 hours ago, audiomick said:

Way off topic, I know, but....

I heard some years ago that about 60% of the literature in the entire world about tax laws deals with German tax laws.

There have been some attempts to simplifiy the tax laws, but there is a profession called "Steuerberater" (tax advisor) which is very well organised, and doesn't want the laws to get simpler.

 

Buddy , that is why there will never be a simple form of income tax .

[Chuck]

Quote

Value your people for it's them the business will need in the long term to ride out the peaks and troughs should be the mantra for modern executive management.

"A world become one of salads and sun
Only a fool would say that"

Steely Dan

[GuzziMoto]

12 hours ago, p6x said:

I found an interesting article that explains it with facts; here's the link: https://motomatters.com/analysis/2024/12/02/ktm_insolvency_and_motogp_what_we_know.html

If the information below is correct, KTM owes a total of 2.9 Billion Euros. This is astronomical!

That is a lot of debt. But consider they have near 2 billion dollars in revenue each year it is probably not that bad in the scheme of things.

One thing KTM have that other companies like Stellantis don't have is a CEO who actually cares about the company. Sure, the CEO has arguably made some serious mistakes of late. But I have always been under the impression that Stefan Pierer is a KTM guy who cares about the long term future of the brand.

Edited December 3 by GuzziMoto

[p6x]

2 minutes ago, GuzziMoto said:

One thing KTM have that other companies like Stellantis don't have is a CEO who actually cares about the company.

That is the impression he gave in that "clumsy" video he made. I think this was the message he wanted to pass along. That he was going to do everything in his power to get KTM back on rails.

If I understood well, they made too many bikes with regards to customer demand. They are probably going to have to lower the price on many of the models to get them out of the door. It actually is sort of happening. I checked the KTM dealership's website.

They also did something that was not well received by their customers. Having features that require subscription to work. Not all the bikes, but the popular one. You would purchase the bike, and all the features would be activated for the initial 1500km or 900 miles. Then you would need to pay a monthly subscription if you continue to use said features. I am not certain what those feature were, but there was mention of quick shifter and cruise control and some other driving assistance.

I am aware the subscription business model would be general if companies could make it stick.

[LowRyter]

I've never understood either KTM or Red Bull.  I assume that both companies are somehow wrapped up into some Austrian deep money pockets.  Neither company seems have the sales outreach to match their respective marketing budget and international presence, particularly Red Bull. 

Maybe I don't know "what" Red Bull actually is?   But if it's a soft drink company I don't see that many customers.  If it's somehow a "life style" business and all of these marketing ventures are money making, different story (I guess).   F1, MotoGP, Rallying, all kinds of sports and entrainment sponsorship from kayaking to stunt airplanes, I don't how it adds up.  Perhaps the mystery was some of the appeal?