Opinion on Mobilisation of the European Globalisation Adjustment Fund for Displaced Workers following an application from Austria - EGF/2025/005 AT/KTM

25.2.2026

Mr Johan Van Overtveldt

Chair

Committee on Budgets

BRUSSELS

Subject: Opinion on Mobilisation of the European Globalisation Adjustment Fund for Displaced Workers following an application from Austria - EGF/2025/005 AT/KTM (2026/0037(BUD))

Dear Mr Chair,

Under the procedure referred to above, the Committee on Employment and Social Affairs has been asked to submit an opinion to your committee and decided to send the opinion in the form of a letter.

The Committee on Employment and Social Affairs considered the matter at its meeting of 25 February 2026. At that meeting, it decided to submit the opinion set out below to the Committee on Budgets, as the committee responsible.

Yours sincerely,

Li Andersson

OPINION

A. Whereas, on 15 September 2025, Austria submitted an application EGF/2025/005 AT/KTM for a financial contribution from the European Globalisation Adjustment Fund for Displaced Workers (EGF), following displacements in KTM Gruppe (KTM) in Austria, operating in the economic sector classified under the NACE Revision 2 division 30 (Manufacture of other transport equipment), where the redundancies made by the enterprise are located in the NUTS 2 region of Upper Austria (AT31);

B. Whereas Austria submitted the application under the intervention criteria of Article 4(2), point (a) of Regulation (EU) 2021/691, which requires the cessation of activity of at least 200 displaced workers over a reference period of four months (in this case from 25 February 2025 to 25 June 2025) in an enterprise in a Member State, including workers displaced in suppliers and downstream producers and / or self-employed persons whose activity has ceased; whereas, following its assessment of this application, the Commission has concluded, in accordance with all applicable provisions of the EGF Regulation, that the conditions for awarding a financial contribution from the EGF are met;

C. Whereas there were 233 displaced workers in KTM during the reference period; whereas in addition to the workers already referred to, the eligible beneficiaries include 1 255 displaced workers whose activity ceased before or after the reference period of four months; whereas all these workers ceased their activity within the six months before the start of the reference period on 25 February 2025 and/or between the end of the reference period and the day before the adoption of this proposal, as required by the EGF Regulation; whereas the total number of eligible beneficiaries is 1 488;

D. Whereas on 6 February 2026, the Commission adopted a proposal for a decision on the mobilisation of the EGF in favour of Austria to support the reintegration in the labour market of the displaced workers;

E. Whereas the events giving rise to these displacements are the insolvency proceedings of KTM Gruppe; whereas KTM was the largest subsidiary of Pierer Mobility AG (90 % of Pierer’s turnover); whereas as a motorcycle producer, KTM developed into being the largest motorcycle producer in the European Union (since 2012); whereas KTM is headquartered in Mattighofen in the district of Braunau in Upper Austria; whereas in December 2023, Pierer announced the offshoring of production to China and India, leading to a first wave of dismissals cutting 300 jobs at the Mattighofen plant; whereas this was primarily due to the far lower labour costs in these countries, with other factors being the proximity to growth markets, as demand in Europe was dwindling, as well as less stringent labour restrictions; whereas during 2024, the company slid into a major crisis, where sales dropped by 29,4 %, resulting in excessive inventory (265 000 motorcycles in stock) and a loss of EUR 1,1 billion and KTM’s debt reaching EUR 1,642 billion; whereas KTM began massive cost reductions, including laying off over 500 employees; whereas despite efforts to relocate production to India, insolvency proceedings were inevitable; whereas restructuring proceedings began for Pierer, with a restructuring plan drafted for KTM and its affiliates; whereas on 29 November 2024, KTM filed for insolvency; whereas KTM had its first production shutdown from December 2024 to March 2025; whereas over 750 additional employees were made redundant; whereas on 25 February 2025, creditors approved a restructuring plan that offered them a quota of 30% of what was owed; whereas however, an investor was needed to take over KTM and to pay the quota; whereas at the time of the creditors’ meeting, the KTM Group insolvency proceedings were the largest ever in Upper Austria; whereas a new investor, Bajaj Auto International Holdings B.V., provided the necessary resources to ensure the continuation of KTM on 22 May 2025; whereas the payment of the agreed quota to the creditors warded off the threat of KTM’s bankruptcy and the risk of the company being closed for good; whereas production could resume on 28 July 2025, while continuing austerity measures and focusing on cost-efficiency;

F. Whereas, the insolvency of KTM hit the region around the Mattighofen headquarters hard; whereas employing over 4 000 staff directly in Upper Austria, KTM Gruppe is not only a significant employer, but also the economic backbone of many suppliers and service providers; whereas the insolvency hit the regional economy hard and caused serious disruption; whereas, consequently, unemployment in the Braunau district rose by 39.8% in October 2024 and by 37.1% in November 2024, compared to the same months of the previous year; whereas in March 2025, this led to an all-time high unemployment in the Braunau district which represented the highest unemployment level of all labour market districts in Austria;

G. Whereas the estimated number of displaced workers expected to participate in the measures is 420;

H. Whereas Austria has indicated that the co-ordinated package of personalised services has been drawn up in consultation with the social partners, in compliance with Article 7(4) of the EGF Regulation;

I. Whereas the EGF shall not exceed a maximum annual amount of EUR 30 million (in 2018 prices), as laid down in Article 8 of Council Regulation (EU, Euratom) No 2020/2093 of 17 December 2020 laying down the multiannual financial framework for the years 2021 to 2027;

Therefore, the Committee on Employment and Social Affairs calls on the Committee on Budgets, as the committee responsible, to integrate the following suggestions in its motion for a resolution:

1. Recalls that the objective of the EGF is to demonstrate solidarity with, and provide support to beneficiaries; considers that financial contributions from the EGF should be primarily directed at active labour market policy measures and personalised services that aim to reintegrate beneficiaries rapidly into decent and sustainable employment within or outside their initial sector of activity; stresses the importance of preparing and supporting workers for the urgently needed green and digital transitions of the European economy and society; reiterates in this context the important role the Union plays, including through the EGF, in contributing to the financing of necessary qualifications for the just transition in line with the European Green Deal;

2. Agrees with the Commission that the conditions set out in Article 4(2), point (a), of the EGF Regulation are met and that Austria is entitled to a financial contribution of EUR 1 806 624 under that Regulation, which represents 60 % of the total cost of EUR 3 011 040;

3. Notes the fact that Austria has provided all necessary assurances that the requirements laid down in national and EU legislation concerning collective redundancies have been complied with and that the principles of equality of treatment and non-discrimination will be respected in access to the proposed measures and their implementation;

4. Stresses that Austria has confirmed that the measures supported by the EGF will not receive any financial contributions from other Union financial instruments;

5. Notes the personalised coordinated package to be provided to displaced workers consists of the following measures: (a) case management, (b) career guidance – career orientation, (c) training and retraining, (d) pro-active job-search, and (e) training allowance – training-related subsidy; welcomes in the context of career guidance, the attention drawn to the career prospects in green jobs, and emphasis put in digital skills in the individual action plans;

6. Stresses in particular the importance of Article 7.2 of the EGF Regulation, which requires the coordinated package to anticipate future labour market perspectives and required skills, which are compatible with the shift towards a resource-efficient and sustainable economy and with a particular focus on the dissemination of skills required in the digital industrial age;

7. Recalls the possibility for special time-limited measures within the coordinated package including, inter alia, to pay childcare allowances, as provided in Article 7.2 b of the EGF regulation to facilitate job seekers’ participation in the activities proposed.