Update—Recaro and BBS America have provided the following statements to Motor1:
Recaro Automotive GmbH, headquartered in Kirchheim unter Teck, has filed for insolvency with the Local Court of Esslingen. The company encountered significant financial difficulties due to extreme price increases in recent crisis years and the loss of a major contract. The effects of legacy products and business operations impacted the development of new product offerings during a regional reduction in vehicle purchase spend. On July 29, 2024, the court approved preliminary self-administration and appointed attorney Holger Blümle from the law firm Schultze & Braun as the preliminary custodian. The international consulting firm Baker Tilly is providing legal advice throughout the process.
Insolvency payments will secure employees' wages and salaries. The employees were informed as of Tuesday morning in a townhall meeting together with the trade union, the works council and local politicians. The company plans to maintain full production during the insolvency proceedings to continue fulfilling all existing orders and new customer inquiries. The shareholders have emphasized the importance of the organization in the region for the group and have pledged their support for the restructuring efforts.
The insolvency proceedings are limited to Recaro Automotive GmbH and do not affect any other group companies. The financially distressed, traditional Swabian company intends to strengthen its position both locally and globally through this process, under judicial supervision and with the support of Baker Tilly.
By working together as a team with our employees, suppliers, and customers through the possibility of an insolvency plan under the German Law we expect to stand on solid ground again in a timely manner.
With regards to the BBS situation, BBS America President Craig Donnelly told Motor1 the insolvency news came as a surprise but assured us that the American side, which is under different ownership from its German counterpart, isn't going anywhere.
"We are independent of that whole situation," he explained. "But it’s a bad situation for everyone overall, because we don’t know what's going to happen at this point."
Whether in a car, on an airplane, or possibly at your desk, everyone has probably sat in a Recaro seat at some point. Now Recaro Automotive has filed for bankruptcy.
According to Automobilwoche, the famous seat company's filing came as a surprise to employees as well as IG Metall, a major trade union. The news surfaced July 29 in Germany through the Esslingen District Court.
“What this means for the 215 employees of Recaro Automotive GmbH in Kirchheim is unclear,” said the union, according to Automobilwoche. “We expect all options to be exhausted in order to secure jobs and find a sustainable solution.”
The works council also expressed its disappointment, as the workforce had helped to keep the company economically stable by waiving and deferring wages. “We are disappointed and feel let down by the management,” said works council chairman Frank Bokowits.
At this time, the bankruptcy filing only applies to Recaro Automotive. That means aircraft, office chairs, gaming chairs, and baby seats are unaffected for now.
Recaro Automotive isn't the only auto-related brand reporting financial issues right now. Long-established wheel manufacturer BBS has also filed for insolvency proceedings at the Rottweil Local Court. The company had reportedly stopped paying wages for May and June.
BBS has been in trouble several times over the last decade or so, specifically in 2007, 2010, 2020, and 2023. ISH Management Services acquired BBS Automotive GmbH prior to this filing, which declared in a statement: “We will never let down the people who have walked this path with us. We will never give up on the BBS brand, which for us is one of the biggest German global brands. We have a plan and we are determined to implement it.”
According to Auto Motor Sport, an agreement to transfer the brand and distribution rights was completed in June 2024. Here too, the IG Metall trade union was completely surprised and is reportedly puzzled by the management's behavior.
In addition to its aftermarket offerings, BBS has supplied wheels to numerous automakers over the years including Porsche, BMW, Mercedes-Benz, and others.
