Double Trouble: Recaro and BBS File for Bankruptcy
Update 7/31/24: Recaro Automotive GmbH released a statement about the insolvency proceedings late yesterday. We’ve updated the story below to include portions of their statement that help to shed more light on the situation.
The future is looking grim for two mainstay suppliers in the OEM and aftermarket automotive space.
Well-known seat manufacturer Recaro Automotive has filed for bankruptcy, according to Autocar. The German outfit supplies chairs to BMW, Ford, and Volkswagen, among others, and was approved on Monday for self-administration (the European form of bankruptcy) by the Esslingen District Court.
Autocar says that according to local reports, workers at the company had not been informed of the plans to file for bankruptcy. The IG Metall Trade Union, which represents the workers at the factory in Kircheim unter Teck, has stated that the future of said workers is now unclear, and has called for transparency from Recaro’s management.
In a statement released late yesterday, Recaro Automotive GmbH confirmed that it had indeed filed for insolvency. “The company encountered significant financial difficulties due to extreme price increases in recent crisis years and the loss of a major contract,” the statement said as reasons for the decision.
“Insolvency payments will secure employees’ wages and salaries,” the statement continued. Recaro plans to maintain full production during the insolvency proceedings to fulfill all existing orders and new customer inquiries.
At the close of the statement, there seemed to be a glimmer of hope for what lay on the other side of this proceeding: “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.”
Recaro also builds seats for the aviation and gaming industries, in addition to other sectors. As of now, the self-administration filing applies solely to the automotive branch of the conglomerate. Four years ago, American supplier Adient sold off Recaro Automotive to a private investment firm called Raven Acquisitions.
The name “Recaro” first appeared in 1963, when German firm Reuterr Carosserie melded its two words into one. But even before the arrival of the catchy name, the seatmaker had already enjoyed a long, prosperous relationship with Porsche that stretched back more than a decade earlier.
Since Recaro’s formation in the ’60s, the firm has become a mainstay in the automotive space. Recently, it has built chairs for high-performance vehicles such as the Aston Martin Valkyrie and plenty of track-hunting Porsches as well as for grand tourers like the Audi R8 and sports cars like the Mustang Shelby GT350, among many others. Recaro is also a trusted name in the racing industry. Sadly, it isn’t alone in its financial trouble.
Legendary wheel manufacturer BBS has also filed for insolvency proceedings at the Rottweil Local Court, according to Motor1. This isn’t the first time the beloved wheel manufacturer has found itself in turbulent straits—or even the second: BBS has faced financial crises four other times since 2000.
Update 8/2/24: After this story was published, Hagerty had a chance to speak with Craig Donnelly, president of BBS America who offered some clarifications on the situation. As it turns out, things aren’t quite as dire as they first seemed. You can read our story detailing the latest on this situation here.
The company’s latest owner, ISH Management Services, acquired BBS Automotive GmbH in June of this year, before the latest insolvency filing. Just like with the Recaro saga, the IG Metall trade union was reportedly blindsided by this move.
Founded in 1970 by Heinrich Baumgartner and Klaus Brand in Schiltach, a small German village to the south of Stuttgart, BBS began as a plastic parts supplier but soon turned its attention to wheel design, aiming to reduce unsprung mass and increase vehicle performance. In 1983, the firm introduced its iconic BBS RS three-piece wheel, which today is one of the most recognizable and sought-after aftermarket designs. For a full history of the company, check out this story we ran in 2020.
BBS also has a star-studded list of clients, including Porsche, BMW, and Ferrari. Additionally, the company has long been a trusted name in the racing wheel space, supplying many of the world’s top motorsports teams as well as those in several lower-tier series.
We’ve reached out to both firms for comment and will update this story when we hear back.
The future is uncertain for either of these celebrated brands, but we trust you’ll join us in hoping for decent resolutions that enable both Recaro and BBS to continue adding that little bit of extra flair to automobiles old and new.
These companies have fallen victims to investment companies that buy, demand higher profits then they are sold or close as the pay the investors and stop developing products.
Too often after this the name gets sold and often is found on inferior products.
I have a long history with BBS. I worked with their wheels while still in high school. They have made some of the best wheels ever made. Easy to repair 3 piece wheels and light/strong.
You may have had some of their wheels and not known it. Even for a while the Lincoln Continental wheels were from BBS.
As for Recaro never was much a fan. Lear has owned the segment for OE but even they have struggled.
These are just the first of more issues with the path of the economy and the auto industry.
My Lexus comes with BBS wheels. I love them, though I wish they were another color other than black.
Investment firms only care about ever increasing profits so they often hurt what was the soul of a once interesting or profitable company.
Jim Hall regrets not getting intellectual property protection on the design of the Chaparral’s cast spoke aluminum wheels, which BBS pretty much copied, at least the aesthetics.
If I recall it was a Chevy design and used on the prototype GM Corvette rear engine car first as well some Corvair models.
Must of Jims cars were GM designs. They worked through him since they could not do a corporate racing program due to company restrictions.
Chevrolet Racing? is a great book about how GM engineers hit their racing in the 60’s. Jim. Roger Penskie Micky Thompson and Smokey did much of the on track stuff with GM’s help and engineering support that was hidden under other titles and other budgets.
Natalie Knight from Stellaantis could lend a hand lol. Another example of corporate heads that care nothing about the company or its products.
Private equity firms are the worst. They have destroyed many specialist enthusiast brands over the years. BBS wheel prices have gone astronomical since 2020. They may blame that on inflation but in truth it’s mostly greed. In turn, enthusiasts (and probably some OEs) probably said “no thanks” and so starts the downward spiral.
The private equity company that bought Recaro on 31 Dec 2019 was itself formed on 31 Oct 2019. When Raven Acquisition bought Recaro it specifically took possession of the license to the name. I learned this with a couple of hours of searching corporate records. Raven had no other business prior to the acquisition. Now that Raven owns the name and is jettisoning the manufacturing (and associated costs including for personnel) it can license out the name and brand to other manufacturers anywhere, with any level of quality, for maximum profit.
As usual, another excellent article from Haggerty! Thanks for the update on BBS.
Correction: Hagerty… Voice to text can really be a pain…
“Four years ago, American supplier Adient sold off Recaro Automotive to a private investment firm called Raven Acquisitions.”
Yep. (As previosly mentioned.)