This bankruptcy filing came just four years after Recaro Automotive was sold to a private equity firm.
Renowned German car seat manufacturer Recaro Automotive GmbH has recently announced that it has filed for bankruptcy, with it having since obtained approval for self-administration by the Esslingen District Court on July 29th 2024.
Recaro Automotive has stated that it will be maintaining full production during the insolvency proceeding under the supervision of its appointed administrator, as the company continues to fulfil all existing orders and new customer inquiries. It has also noted that its employees were informed of the insolvency, with their wages and salaries secured through insolvency payments.
News of its bankruptcy nevertheless apparently came as a shock to its employees, with local reports suggesting that at least the 215 workers in the IG Metall trade union who work at its factory in Kircheim unter Teck were only informed after the insolvency was approved. The union has since called for transparency from Recaro’s management, and expects ‘all options to be exhausted in order to secure jobs and find a sustainable solution’ in this situation.
According to the seat supplier, its insolvency comes as a result of significant financial troubles faced from the extreme price hikes in recent years and the loss of a major contract. It also has blamed the effects of legacy products and business operations having impacted the company’s development of new product offerings, during a regional reduction in vehicle purchase spend.
The company initially began life as an automotive coachbuilder called Reuterr Carosserie (REutter and CAROsserie) in 1906, supplying car bodies for the likes of Porsche and Volkswagen until switching its focus to seats in the 1960s. Recaro’s sports seats have since been a common sight in various cars that span the gamete of Mercedes-Benz to Mitsubishi, with its also name commonly spotted on seats in racing cars at all levels of motorsport as well.
Among the innovations from Recaro over the past 60 years in seat making includes for it to have pioneered the first composite shell seat, with it then further becoming the first to make it both road-legal and FIA-homologated. The company was also responsible for an early seat with speakers integrated into the headrest, as well as the first seat with side airbags that was able to be retrofitted to older cars.
Now while the future of Recaro seats in cars are currently up in the air, it is worth highlighting here for this name to still be very much alive on seats in planes and trains. Such is as Recaro Holding, the parent company of the Recaro Group, had previously spun off Recaro Automotive and sold it to Johnson Controls back in 2011, before eventually landing in the portfolio of Detroit-based private equity firm Raven Acquisitions back in 2020.
And in other news of big aftermarket names going bust meanwhile, long-established wheel manufacturer BBS has also filed for insolvency proceedings at the Rottweil Local Court recently. The reason why this news is to perhaps be less surprising though is as this is to be the fifth time the company has made such a filing, with the company most recently doing so just last year.
