Recaro Automotive has announced it has filed for bankruptcy with the Local Court of Esslingen. According to the German seat supplier, its insolvency was a result of significant financial difficulties due to extreme price increases in recent crisis years and the loss of a major contract. Additionally, the effects of legacy products and business operations impacted the company’s development of new product offerings during a regional reduction in vehicle purchase spend.
In an official release, it was stated that the court approved preliminary self-administration on July 29, 2024 and appointed attorney Holger Blümle from the law firm Schultze & Braun as the preliminary custodian of the company. Meanwhile, international consulting firm Baker Tilly is providing legal advice throughout the process.
The company’s employees were informed of the insolvency on Tuesday and will have their wages and salaries secured through insolvency payments. Full production will be maintained during the insolvency proceeding as the company continues to fulfill all existing orders and new customer inquiries.
Autocar reports the company’s employees were unaware of the impending bankruptcy, with the IG Metall trade union, which represents 215 workers at Recaro’s factory in Kircheim unter Teck, Germany, demanding transparency from the company’s management.
It’s important to note that the insolvency proceedings are limited to Recaro Automotive and do not affect any other group companies. The Recaro Group has several business areas besides automotive, including aircraft seating, gaming, child safety seating, rail and special applications.
Recaro’s history dates back to 1906 when master saddler Wilhelm Reutter began designing and building car bodies and interior fittings. The foundation of today’s brand was laid in 1963 when Reutter rebranded (REutter and CAROsserie), with the new company specialising in the manufacture of seats and seat components. The first Recaro sports seat was launched in 1965, which was followed by company’s first road-legal full shell seat in 1967.
Recaro Automotive hasn’t been a part of Recaro Holding, the parent company of Recaro Group, for over 10 years. In fact, Recaro Automotive has changed hands a number of times over recent years, with the company being sold to United States automotive supplier Johnson Controls in 2011.
In 2016, Recaro Automotive evolved to ownership under automotive supplier Adient following the spin-off from Johnson Controls. Later in 2020, the company was sold to Raven Acquisitions, a privately-owned investment firm based in Detroit, Michigan, which continued to licence the Recaro name from Recaro Holding.
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