Munich, July 30, 2024 – Recaro Automotive GmbH, a well-known manufacturer of automotive seating, has announced the commencement of insolvency proceedings. Headquartered in Kirchheim unter Teck, Germany, the company filed for insolvency with the Local Court of Esslingen on July 30, 2024, marking a significant development for the automotive supplier industry. This Recaro Bankruptcy filing comes as the company grapples with substantial financial headwinds stemming from recent global economic challenges.
Several factors contributed to this difficult decision. According to the official statement, Recaro Automotive GmbH faced immense pressure from extreme price increases experienced over the past few crisis years. Compounding these issues was the loss of a major contract, which further strained the company’s financial stability. Additionally, legacy product lines and existing business operations reportedly hindered the development and introduction of new product offerings. This occurred against a backdrop of reduced vehicle purchasing in the region, exacerbating the company’s financial woes and ultimately leading to the Recaro bankruptcy filing.
The Esslingen court has approved preliminary self-administration for Recaro Automotive GmbH. This process allows the company to manage the insolvency proceedings internally while under the supervision of the court. Attorney Holger Blümle from Schultze & Braun has been appointed as the preliminary custodian to oversee the process. Furthermore, the international consulting firm Baker Tilly is providing legal and strategic advice to Recaro Automotive GmbH throughout this restructuring period.
A key priority during the Recaro bankruptcy proceedings is securing employee wages and salaries. The company has confirmed that insolvency payments will cover these obligations, providing reassurance to its approximately 200 employees. Employees were informed of the situation at a town hall meeting on Tuesday morning, which included representatives from the trade union, works council, and local political figures.
Despite the financial challenges, Recaro Automotive GmbH intends to maintain full production operations. The company aims to continue fulfilling all existing orders and is open to new customer inquiries. Shareholders have voiced strong support for the restructuring efforts and emphasized the importance of Recaro Automotive GmbH within the region for the broader group.
It is crucial to note that these insolvency proceedings are specifically limited to Recaro Automotive GmbH. Other entities within the Recaro Group are not affected by this filing and remain financially sound. Recaro Automotive GmbH, a company with a long-standing tradition in the Swabian region of Germany, views this Recaro bankruptcy process as an opportunity to strengthen its market position both domestically and internationally. The company aims to emerge from insolvency under judicial supervision and with the expert guidance of Baker Tilly, ultimately securing a more robust future.
The management of Recaro Automotive GmbH expressed optimism about the future, stating, “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.” This collaborative approach is central to Recaro’s strategy for navigating the Recaro bankruptcy and achieving a successful turnaround.
About RECARO Automotive GmbH:
RECARO Automotive GmbH is recognized as a global innovator and supplier of high-quality automotive seating solutions. Based in Kirchheim unter Teck, Germany, the company operates as a licensee of RECARO Holding GmbH. Further information about Recaro Automotive and its products can be found at https://www.recaro-automotive.com/us/recaro.
Advisors:
Baker Tilly: A global consulting firm with 41,000 employees across 145 countries, Baker Tilly offers a wide range of services, including auditing, legal, tax, and management consulting. They provide tailored solutions to meet the unique needs of their clients worldwide.
Schultze & Braun: A leading interdisciplinary German firm of lawyers and tax advisors with over 500 specialists in more than 30 European locations. Schultze & Braun offers comprehensive legal and tax expertise in insolvency and restructuring.
Press Contact:
Marketing Communications RECARO Automotive
Phone: [email protected]
