By fpena944 - Wed Jul 31, 2024 9:30 pm
- Wed Jul 31, 2024 9:30 pm
#274699
I haven't been following these two companies all that closely but was shocked to find that Recaro is filing for bankruptcy and BBS Germany is essentially insolvent. I mean these two are the big boys of their respective automotive niche. Really surprised to see the troubles they're having.
Here is an article I found that goes into details:
https://carbuzz.com/recaro-seats-bankru ... nsolvency/
Here is an article I found that goes into details:
https://carbuzz.com/recaro-seats-bankru ... nsolvency/
Text Snippet
Being an automotive supplier can prove to be a lucrative exercise, but just because you're one of the best in the world and have several contracts with OEMs does not guarantee your prolonged success. This is a lesson that both Recaro and BBS are learning after it was reported that the former has filed for bankruptcy while the latter is now insolvent, and not for the first time either.
Recaro Automotive Seating is a pioneer in car seat design. In 1953, it patented the hinge-adjustable backrest for a car seat, but it was only in 1963 when Porsche got involved with the company that things really took off. In 1965, its first sports seat was presented, and since then, it has always innovated with new materials and designs with seats like the Podium CF while maintaining classic models like the Pole Position, both of which are especially favored by track enthusiasts.
BBS Autotechnik GmbH is headquartered in Schiltach, Germany, and originally produced motorsport, OEM, and aftermarket wheels before selling off various parts of the business (under the same BBS name) to other entities. Often credited with spearheading three-piece wheel innovation, BBS is also beloved for its timeless designs, such as BBS LM and BBS E88, for their aesthetic beauty.
Recaro supplies seating to BMW, Volkswagen, Ford, Porsche, and Aston Martin, with the latter featuring Recaro Podium seats in the new Valiant. BBS also has several OEM supplier agreements, including with Honda, Mercedes, Bentley, and Audi. So what went wrong?
How Did Recaro Lose Its Seat At The Head Of The Table?
According to Autocar, Recaro's bankruptcy filing is news to workers within the company, who had not been informed that the company might take this path. Trade union IG Metall is calling for Recaro to provide transparency on the matter, as all we know is that the Esslingen District Court has approved a request for self-administration. Whatever the cause, this comes as a surprise since Recaro supplies not only the automotive sector but also provides seats for aircraft, sports stadiums, and other applications. It also makes some sexy office chairs.
While it's surprising that a company with such a rich history and so many supplier contracts is in financial trouble, it's even more astonishing that this is happening just four years after American company Adient sold Recaro Automotive to a private investment firm that promised to bring "shorter and faster decision-making processes" to the company's management. However, 2020 was a tough time for all industries, and it appears likely that what we're seeing here could be latent issues stemming from bad calls during the COVID-19 crisis. Ineos Automotive may also have had a role in the company's decline, as Recaro has a big supplier agreement with the automaker which has recently postponed its second model.
What About BBS?
Further clarity on the various branches of BBS and their current status/operations appears below, thanks to Craig Donnelly, President of BBS of America.
With a long history of excellence in the field of auto racing, BBS is the exclusive supplier for Formula 1, so an announcement of insolvency, made just last week, is also a bit shocking. However, that BBS is owned by BBS Japan, not Germany, as clarified in an email to CarBuzz:
"After the second insolvency, BBS Japan negotiated with the insolvency administrator to purchase the motorsports department and also to own the forged side of the BBS business. Later, the cast part of the business was sold to another investor. BBS Japan is a completely different group, [owning] the motorsport side of the business [...] BBS of America is owned by KW Automotive and not part of the insolvency filed last Friday in Germany."
- Craig Donnelly, President of BBS of America
According to Automobilwoche, BBS (we're talking about the German company again here) filed for insolvency after failing to pay some of its 270 employees. This is nothing new for the company, which has declared itself insolvent on four previous occasions, including in 2020, with the most recent such event in September 2023.
Where does this leave cars like the Mazda MX-5 Miata, which can be had with a package offering Recaro seats, BBS wheels, and Brembo brakes? The wheels on that come from BBS Japan. BBS Germany may yet be rescued, but it remains to be seen who will be willing to risk working with a company that is constantly facing financial management struggles. As for Recaro, it intends to work with employees, customers, and suppliers to improve processes and expects to "soon be back on solid economic footing." Production will continue as normal. Basically, don't panic - this is nothing we haven't seen before.
Recaro Automotive Seating is a pioneer in car seat design. In 1953, it patented the hinge-adjustable backrest for a car seat, but it was only in 1963 when Porsche got involved with the company that things really took off. In 1965, its first sports seat was presented, and since then, it has always innovated with new materials and designs with seats like the Podium CF while maintaining classic models like the Pole Position, both of which are especially favored by track enthusiasts.
BBS Autotechnik GmbH is headquartered in Schiltach, Germany, and originally produced motorsport, OEM, and aftermarket wheels before selling off various parts of the business (under the same BBS name) to other entities. Often credited with spearheading three-piece wheel innovation, BBS is also beloved for its timeless designs, such as BBS LM and BBS E88, for their aesthetic beauty.
Recaro supplies seating to BMW, Volkswagen, Ford, Porsche, and Aston Martin, with the latter featuring Recaro Podium seats in the new Valiant. BBS also has several OEM supplier agreements, including with Honda, Mercedes, Bentley, and Audi. So what went wrong?
How Did Recaro Lose Its Seat At The Head Of The Table?
According to Autocar, Recaro's bankruptcy filing is news to workers within the company, who had not been informed that the company might take this path. Trade union IG Metall is calling for Recaro to provide transparency on the matter, as all we know is that the Esslingen District Court has approved a request for self-administration. Whatever the cause, this comes as a surprise since Recaro supplies not only the automotive sector but also provides seats for aircraft, sports stadiums, and other applications. It also makes some sexy office chairs.
While it's surprising that a company with such a rich history and so many supplier contracts is in financial trouble, it's even more astonishing that this is happening just four years after American company Adient sold Recaro Automotive to a private investment firm that promised to bring "shorter and faster decision-making processes" to the company's management. However, 2020 was a tough time for all industries, and it appears likely that what we're seeing here could be latent issues stemming from bad calls during the COVID-19 crisis. Ineos Automotive may also have had a role in the company's decline, as Recaro has a big supplier agreement with the automaker which has recently postponed its second model.
What About BBS?
Further clarity on the various branches of BBS and their current status/operations appears below, thanks to Craig Donnelly, President of BBS of America.
With a long history of excellence in the field of auto racing, BBS is the exclusive supplier for Formula 1, so an announcement of insolvency, made just last week, is also a bit shocking. However, that BBS is owned by BBS Japan, not Germany, as clarified in an email to CarBuzz:
"After the second insolvency, BBS Japan negotiated with the insolvency administrator to purchase the motorsports department and also to own the forged side of the BBS business. Later, the cast part of the business was sold to another investor. BBS Japan is a completely different group, [owning] the motorsport side of the business [...] BBS of America is owned by KW Automotive and not part of the insolvency filed last Friday in Germany."
- Craig Donnelly, President of BBS of America
According to Automobilwoche, BBS (we're talking about the German company again here) filed for insolvency after failing to pay some of its 270 employees. This is nothing new for the company, which has declared itself insolvent on four previous occasions, including in 2020, with the most recent such event in September 2023.
Where does this leave cars like the Mazda MX-5 Miata, which can be had with a package offering Recaro seats, BBS wheels, and Brembo brakes? The wheels on that come from BBS Japan. BBS Germany may yet be rescued, but it remains to be seen who will be willing to risk working with a company that is constantly facing financial management struggles. As for Recaro, it intends to work with employees, customers, and suppliers to improve processes and expects to "soon be back on solid economic footing." Production will continue as normal. Basically, don't panic - this is nothing we haven't seen before.
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