What’s one way to tell if your company makes an incredible product?

One surefire way to know is if it appears in the lyrics of a rap song.

How about multiple rap songs?

A common thread inside all of those Bentleys and Lamborghinis is Recaro seats. They aren’t the only high-end maker of seats, but they’ve been at it forever. Obviously they’ve developed a reputation over the years – not just with rappers, but with anyone who appreciates a well-made, supportive, great  looking car seat.

They don’t just come standard on expensive vehicles either. You could probably get a set for your old Toyota Tercel, assuming the rest of the car hasn’t yet disintegrated around you.

Recaro made seats that could be used to upgrade a whole host of different vehicles. They were designed to provide a combination of comfort and support, so if you decided to drive your car like Mario Andretti, your butt would be planted firmly in the seat. They also made seats for brand-new cars. You could brag to your friends if your new VW rocked some Recaros.

But the old saying – “all things must come to an end”   is sadly true when it comes to Recaro. Sadly, they have filed for bankruptcy.

Does this mean they will be gone for good? Read on and see.

The History

Recaro has been in business since 1906. That’s two years before the Model T Ford began production! Recaro was in the business of seats before the average middle-class worker  could even afford a car.

Nobody alive today was even around when the company began. The oldest living human was born one year after Recaro began business.

The same year Recaro started, Corn Flakes were invented. Essentialy, bland, flavorless cereal has been eaten as long as Recaro has been supporting backsides.

Let’s think about how the world has changed after Recaro was born.

The helicopter first flew in 1908. We have to wonder if the seat in the first helicopter was made by Recaro? It’s sad to think that the helicopter still exists, but Recaro might not.

Caffeinated water (also known as instant coffee), was invented in 1909. People so desperate for caffeine that they are willing to settle for this beverage must have been thrilled when it was introduced to the public. Maybe they  quickly learned that by adding enough sugar and cream, they could turn it into a palatable beverage.

Lifesavers and the first military tank were created in 1912. Let’s appreciate the duality of these simultaneous inventions.  It’s sort of a war and peace kind of thing. Obviously the military tank is a mechanism of war. And it would be hard not to feel at peace while sucking on a peppermint Lifesaver.

In 1913, the least practical, mental exercise ever created (also known as the crossword puzzle), was born. The bra was also invented the same year. This means Recaro was supporting bottoms before adequate support was available for tops.

Stainless steel wasn’t invented until 1916. We have to assume that’s why George Washington’s braces were known for being perpetually rusty.  I guess you won’t see any rust-free parts on those old, Recaro seats.
In 1920, the Band-Aid was invented. It’s hard to know exactly what it was that people did when they injured themselves before this indispensable product was created. Maybe they just taped some paper towels over their injuries. By the way, paper towels weren’t invented until 1907 – one year after Recaro. At least tape has been around since the 1700’s.

The first traffic signal wasn’t invented until 1923. We had the Model T for almost a couple of decades before we had the traffic signal. There must have been some serious stop-and-go traffic in big cities with all those four-way-stop intersections. At least those who had Recaro seats could stop and go in comfort.

Frozen food was invented in 1923 as well. Farmers markets everywhere began to die a slow death, only to be gradually resurrected as a cultural phenomenon decades later.

Of  course, this is just the tip of the iceberg when it comes to technological innovation. We didn’t even address groundbreaking changes in medicine, the space program, and computing.

When a company has been around as long as Recaro, we have the tendency to get complacent – we just assume it’s here to say. If you think of the history of all the major car makers across the globe – Ford, Fiat, Toyota, Mercedes, Citroen, etc. – they’ve all been around forever, and we would all be shocked if any one of them closed. But time does not respect any man – or company apparently.

Recaro On The Brink?

It has been widely reported that Recaro has blamed rising costs and the loss of a major contract as reasons for its bankruptcy. Rising costs have definitely been a factor in every facet of economics as of late. But to be fair, the costs have been passed on to the consumer. This has slowed economic growth, but for the most part the automotive industry has weathered this storm well.

What makes Recaro different?

This “loss of a major contract” has to be another, crippling factor for sure. This is a pattern we often see prior to bankruptcy. A business has a tenuous hold on its existence, and then the final nail in the coffin gets driven in by an unanticipated, economic hit. Just as a tree with only one root blows over in a gale, so does a company when it is economically tied to a limited number of business contracts.

Recaro has not stated who exactly this contract is with. Likely this is due to contract restrictions. Speculation on the internet suggests that it could be with Volkswagen. Apparently Recaro has been supplying a lot of seats for their vehicles, and no longer is doing so. It stands to reason that this is the lost contract. But it matters not. LIke Cher told us, we cannot turn back time, just as Recaro can’t unfile for bankruptcy.

I Guess This Means Goodbye, Doesn’t It?

So where does filing for bankruptcy leave Recaro? Is it like the end of a classic western, where the cowboy rides off into the sunset? Or is it more like a stereotypical Rom Com where the couple says goodbye at the airport, only to have the boyfriend change his mind and come running back to her – with the camera closing in on their romantic embrace?

There’s no easy answer. It could be either of these scenarios.

Contrary to popular belief, when a large corporation files for bankruptcy, it doesn’t necessarily mean it’s going out of business. These large-scale bankruptcies usually entail the reorganization of a company and its assets, rather than the outright closure of total business operations.

What does all that gibberish mean for Recaro?

Well… it depends. There are a lot of players when it comes to a corporate bankruptcy, and the input of all involved is considered by the court. Even the court itself is one of the major players in a corporate bankruptcy.

In addition to the bankruptcy court, there are attorneys for Recaro, attorneys who represent creditors of Recaro, and attorneys for the court itself. Also involved are those who make decisions for Recaro itself, (such as a board of directors), and whoever makes those decisions for Recaro’s creditors.

This is where the two roads diverge in a yellow wood.

One road is the road to survival. On this path, the Recaro survives the bankruptcy. Underperforming parts of the company may be closed. The company itself may be sold to new owners. Creditors will have to settle with Recaro to receive some, but not all of what they are owed.

At the end of this road, a new, more streamlined version of Recaro continues to do business. Everyone who loves those firm yet comfortable seats is happy. Even the creditors who have to take a loss are at least somewhat pleased, because they are paid at least a portion of what they are owed. This is something which would not be the case if the second road is the one by which Recaro travels.

At  the end of that road, Recaro closes its doors for good. Creditors are unhappy. Shareholders are unhappy. The attorneys are probably happy, since they get paid either way. But saddest of all is our posteriors – because tragically – there’s one less way to get comfortable behind the wheel.