Ford Supplier Recaro Will Resume Production Amid Insolvency

Earlier this week, Recaro Automotive – a rather well-known company that has produced seats for many Ford models over the years – filed for bankruptcy in what amounted to a surprise, not just for consumers, but also, the company’s employees and the union that represents them, it seems. However, the company was adamant that it would exhaust every option to right the financial ship and continue on as it has for years, and this decision doesn’t impact Recaro Group, which makes things like child safety seats, aircraft seats, and gaming chairs.

Now, Recaro Automotive has announced that it will resume production after filing for insolvency with the Local Court of Esslingen. The company notes that it encountered “significant financial difficulties” due to extreme price increases in recent years, along with the loss of a major contract. Subsequently, this made it difficult for Recaro to invest in developing new products, too.

Recaro also announced that its insolvency payments will continue to cover its employees’ wages, and those workers have been informed of the situation, along with the union that represents them. Recaro plans to continue to produce seats during insolvency proceedings, and will fulfill its existing orders and new inquiries.

“The insolvency proceedings are limited to Recaro Automotive GmbH and do not affect any other group companies,” the company said in a statement. “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.”

We’ll have more on the future of Recaro soon, so be sure and subscribe to Ford Authority for non-stop Ford news coverage.