Volume Up Slowly

Every day, Recaro GmbH & Co. KG does a delicate dance with the notion of “volume” manufacturing.

The specialty seat producer needs incremental volume growth for survival, but in closely measured doses. Too much of a good thing could diminish the brand's image in a marketplace where enthusiasts covet Recaro seats. Not enough, and the company faces the threat of stagnation.

Recaro is not a high-volume producer, nor does it intend to become one. It has only three automotive seat plants, including one that opened six years ago in Auburn Hills, MI, and a second plant in Yohkaichi City in the Shiga prefecture of Japan.

At its only European automotive seat plant at the company headquarters in Kirchheim, Germany, Recaro has produced 640,000 seats over the past six years.

Sounds like a respectable number until compared with Lear Corp., which produces seats for 1.2 million vehicles every month.

How can a supplier survive at such low volumes? By building custom seats for auto makers catering to customers who are willing to pay hundreds or thousands of dollars extra to have the name “Recaro” pressed against their backs.

In 2005, the Kirchheim plant manufactured 100,000 seats — 80% for OEMs and 20% for the aftermarket. Two dozen auto maker customers require 8,000 variants of the 80,000 OEM seats produced annually. Each variant could have a special fabric or a particular feature, such as heating or cooling or lumbar support.

Recaro seats are made by hand — big, burly hands that must be strong enough to pull the fabric taut over polyurethane foam placed on the seat and the backrest.

The craftsman then glides a heat gun along the surface, causing the foam to expand and pull the fabric even tighter, contributing to a firm and comfortable seating experience.

Depending on the program, as few as two workers and as many as eight are involved in assembling every seat.

Each seat cover is hand sewn by up to five people. There is very little automation in the Kirchheim plant.

Some seats are made in batches of one, such as specialty racing shells and commercial vehicle seats. The cycle time to produce a seat here is anywhere between 35 minutes and 3.5 hours, which includes cutting, sewing and assembly. Production is scheduled one week at a time.

The plant devotes a separate cell to each customer. In one section, the compact cells are situated in a long row: Aston Martin, Ferrari, Porsche and Audi, all side by side.

Nearby, a section of the plant is devoted to the “volume” programs for the Ford Focus ST and high-performance versions of the Opel Vectra, Zafira and Mariva. Together, the models represent about 68,000 seats for this year.

Here, workers “Recaro-ize” base seat structures produced by high-volume manufacturers by adding foam and Recaro fabric or leather.

After three straight years of producing about 100,000 seats annually, the Kirchheim facility plans to manufacture 120,000 seats this year and 150,000 next year — a 50% jump in two years.

Likewise, Recaro sales worldwide are up, from €135 million ($172 million) in 2005 to an anticipated €176 million ($225 million) this year.

The Kirchheim plant has 250 employees devoted to cutting, sewing, assembly and logistics. Across the entire company, Recaro has 632 employees.

Before he became president and CEO of Recaro, Horst Kespohl managed a high-volume seat plant for French supplier Faurecia SA. That one plant employed more people (850) than Recaro has in the entire company. “It's a completely different world,” Kespohl says when comparing the two companies.

Indeed, Recaro is small enough for a number of high-volume seat producers to gobble up. Martin Putsch, who owns 98% as chairman of Putsch GmbH & Co. KG (which owns the Keiper Recaro Group), confirms offers to acquire Recaro are frequent. But he says Recaro intends to remain an independent, highly focused niche producer.