What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2021-11-23 compared with 2020-11-30 · 67 added, 44 removed, 181 unchanged (38% of the section changed)

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Additionally, Adient has partially-owned affiliates in China, Asia, Europe and North America.

Through its global footprint, vertical integration and partnerships in China, Adient leverages its capabilities to drive growth in the automotive seating industry.

Through its global footprint and vertical integration, Adient leverages its capabilities to drive growth in the automotive seating industry.

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Adient's business model is focused on developing and maintaining long-term customer relationships, which allows Adient to successfully grow with leading global OEMs.

Adient and its engineers work closely with customers as vehicle platforms are developed, which results in close ties with key decision makers at OEM customers.

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Business Organization and Strategy

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By leveraging a network of subject matter technical experts, Adient efficiently implements best practices and improves product cost and quality.

Adient's product development practices also entail leveraging low cost country development centers in India, China and Slovakia.

Adient's product development practices also entail leveraging low cost country development centers in India, China, Czech Republic and Slovakia.

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Burscheid (Germany) Yokohama (Japan)

Solingen (Germany) Shanghai (China)

Kaiserslautern (Germany) Changchun (China)

Solingen (Germany) Chongqing (China)

Kaiserslautern (Germany) Ceska Lipa (Czech Republic)

Ansan (South Korea) Pune (India)

Leadership Position in China Adient has an advantaged position in China established through strategic partnerships it developed as an early market entrant.

Adient is a leading supplier of "just-in-time" seating in China.

It operates through 18 joint ventures with 86 manufacturing locations in 38 cities, which are supported by additional technical centers.

Leadership Position in China Adient is a leading supplier of "just-in-time" seating in China.

It operates through 9 joint ventures (nonconsolidated and consolidated) with 33 manufacturing locations in 21 cities, which are supported by additional technical centers.

Adient's strong position with European and American automakers is complemented by partnerships with all major auto groups in China, which has resulted in Adient's broad market penetration relative to seating competitors and market leadership in the industry's largest market.

Adient leverages its operating expertise and innovation capabilities developed worldwide to further support its growth in China.

Refer to Note 3, “Acquisitions and Divestitures,” in Part II, Item 8 of this Form 10-K for more information on recent transactions in China.

Platform for Global Growth Adient's current global platform creates multiple opportunities for growth, such as:

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• Regional growth opportunities.

Adient is able to leverage its position as the market leader in Europe, North America and through its joint ventures in China to grow in other markets, such as Southeast Asia.

Adient is able to leverage its position as the market leader in Europe, North America and China to grow in other markets, such as Southeast Asia.

• Vertical integration.

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Adient's technologies extend into virtually every area of automotive seating solutions including complete seating systems, frames, mechanisms, foam, head restraints, armrests and trim covers.

Adient is a supplier to all of the global OEMs and has longstanding relationships with premier automotive manufacturers, including BMW, Daimler AG, Fiat Chrysler Automobiles, Ford Motor Company, General Motors Company, Honda Motor Company, Hyundai Motor Company, Jaguar Land Rover, Kia Motor Company, Mazda Motor Company, Mitsubishi Motors, Nissan Motor Company, PSA Peugeot Citroen, Renault, Suzuki, Toyota Motor Corporation, Volkswagen AG and Volvo.

Adient also supplies most of the growing regional OEMs such as Ashok Leyland, BAIC Motor Co., Ltd., Brilliance Auto Group, Changan Automobile (Group) Co., Ltd., FAW Group Corporation, NIO, SAIC Motor Corporation Limited, Tata Motors Limited and Zhejiang Geely Holding Group Co., Ltd.

and newer auto manufacturers such as Tesla Motors, Inc.

Additionally, Adient has more than 18 joint venture partnerships with key OEMs, including SAIC Motor Corporation Limited, Beijing Automobile Works Co., Ltd.

Adient is a supplier to all of the global OEMs and has longstanding relationships with premier automotive manufacturers, including BMW, Daimler AG, Ford Motor Company, General Motors Company, Honda Motor Company, Hyundai Motor Company, Jaguar Land Rover, Kia Motor Company, Mazda Motor Company, Mitsubishi Motors, Nissan Motor Company, Renault, Subaru, Stellantis N.V., Suzuki Motor Corporation, Toyota Motor Corporation, Volkswagen AG and Volvo Car Corporation.

Adient also supplies most of the growing regional OEMs such as BAIC Motor Co., Ltd., Changan Automobile (Group) Co., Ltd., Chery Automobile Co.

Ltd., FAW Group Corporation, Tata Motors Limited and Zhejiang Geely Holding Group Co., Ltd.

and newer auto manufacturers such as Tesla Motors, Inc., NIO and Xpeng Motors.

Additionally, Adient has more than 8 joint venture partnerships with key OEMs, including Guangzhou Automobile Group Co., Ltd., Beijing Automobile Works Co., Ltd.

and FAW Group Corporation.

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The components for these complete seat assemblies such as seating foam, metal structures, fabrics, seat covers and seat mechanisms are shipped to Adient or competitor seating assembly plants.

Adient is a global leader in complete seat assembly and one of the

Adient is a global leader in complete seat assembly and one of the largest in all major seating components, operating manufacturing plants that produce seating foam, metal structures, seat covers and seat mechanisms.

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largest in all major seating components, operating manufacturing plants that produce seating foam, metal structures, seat covers and seat mechanisms.

Demand for automotive parts in the OEM market is generally a function of the number of new vehicles produced, which is primarily driven by macro-economic factors such as credit availability, interest rates, fuel prices, consumer confidence, employment and other trends.

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Sourcing Patterns by OEMs Most OEMs have adopted global vehicle platforms to increase standardization, reduce per unit cost and increase capital efficiency and profitability.

In seating, three sourcing patterns have emerged over the past five years:

In seating, three sourcing patterns have emerged:

Core seat structures :

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Suppliers with strong technologies, robust global engineering and development capabilities will be best positioned to meet OEM demands for rapid innovation.

Electric Vehicles The adoption of electric vehicles (EVs) is accelerating in the global automotive industry driven by numerous product offerings from legacy manufacturers and new entrants, government incentives and overall consumer acceptance.

While seating systems are not largely impacted by the shift to EVs, key attributes of seat design are evolving as the market pivots toward EVs.

This movement provides Adient with unique opportunities to provide value added solutions through Adient’s Evolution of Seating Systems Sustainability (“ES 3 ”) and to capture market share through new entrants based on Adient’s existing leading market position.

Autonomous Driving As the industry moves towards autonomous driving and alternative usage models such as car sharing and urban mobility, Adient has developed an interiors concept for autonomous driving which addresses major seating and other interior trends that are expected to drive the automotive industry of the future.

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Raw Materials

Raw materials used by Adient in connection with its operations, including steel, aluminum, polyurethane chemicals, fabrics, leather, vinyl and polypropylene, were available during fiscal 2020, and Adient expects such availability to continue.

During fiscal 2021, commodity prices could fluctuate throughout the year and significantly affect Adient's results of operations.

Raw materials used by Adient in connection with its operations include steel, aluminum, polyurethane chemicals, fabrics, leather, vinyl and polypropylene.

During fiscal 2021, the automotive industry has seen a period of sustained price increases for commodities, primarily related to steel, and to a lesser extent petrochemicals.

These price increases may continue into the future

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as demand increases and supply may remain constrained, which has resulted in, and may continue to result in, increased costs for Adient that may not be, or may only be partially, offset.

During fiscal 2022, commodity prices and availability could fluctuate throughout the year and significantly affect Adient's results of operations.

Refer to Item 1A.

Risk Factors section for additional information.

Intellectual Property

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Adient values character and integrity as much as qualifications and fosters an empowerment culture where employees have ownership in business outcomes.

Adient’s Chief Human Resources Officer (CHRO), reporting directly to Chief Executive Officer (CEO), oversees its global talent processes to attract, develop and retain the most valuable asset – its employees.

The highest levels of Adient’s management drive these practices with the alignment and support of all levels within the organization.

Our Executive Vice President, Chief Legal and Human Resources Officer, and Corporate Secretary reporting directly to Chief Executive Officer (CEO), oversees its global talent processes to attract, develop and retain the most valuable asset - its employees.

Adient has approximately 75,000 employees worldwide who represent a wide variety of backgrounds.

Forty-three percent work in the Americas, 51% work in EMEA and 6% work in our Asia-Pacific region.

Forty percent of the total workforce is female.

Adient’s workforce composition, as of September 30, 2021, includes:

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• 44% work in the Americas, 49% work in EMEA and 7% work in our Asia-Pacific region

• 41% of the global workforce is female

• 42% of employees in the U.S.

have identified themselves as ethnically diverse

Adient ensures its people are engaged and working collaboratively to achieve company goals through positive employee relations activities that focus on supporting employees and their families.

Adient also provides and encourages many forms of corporate communication such as town hall meetings, open-door policy, and ethics Integrity Helpline so that employees can hear directly from Adient leadership and have the opportunity to ask questions, make suggestions, and provide input.

Because retention of the employee base is significant to its business strategy, executive management provides frequent updates on turnover metrics to the board of directors.

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Occupational Health and Safety

Adient continuously works to improve its “Total Safety Culture” that ensures the well-being of Adient’s people.

Because the attraction, development and retention of the employee base is significant to its business strategy, executive management provides frequent updates on these metrics to the board of directors.

Health and Safety

We are committed to protecting the safety and well-being of our colleagues, customers, suppliers and people using our premises by providing and maintaining a safe working environment that protects both physical and mental wellbeing.

Adient requires protective equipment, enforces comprehensive safety policies and procedures, and encourages employees and leaders to look regularly for ways to improve workplace safety.

Adient has implemented and maintains a health and safety management system that is certified to the OHSAS 18001 or ISO 45001 standard;

64% of the locations are certified to this standard, with cyclical auditing to compliance by a third party.

In fiscal 2020, the injury rate was 0.49 (per 100 employees) and the loss time injury rate (per 100 employees, U.S.

only) was 0.71.

Adient has implemented and maintains a health and safety management system that is certified to the ISO 45001 standard;

48% of the locations are certified to this standard and the remainder are compliant with cyclical auditing to compliance by a third party.

Adient has achieved a year-over-year decrease in our global injury rate over the last several years.

We work together across the globe, sharing best practice ideas, procedures, and information regarding accidents and injuries.

At Adient, every new machine, operation, building or work-station change requires a safety risk assessment.

When our employees come to work, they can know that where they work has undergone an extensive review of associated risks of injury or illness and that those risks are eliminated and/or minimized through robust controls.

Adient provides monthly updates on health and safety to the board of directors, which during fiscal 2021, included regular updates on the return-to-work health and safety protocols in various geographies as a result of COVID-19.

Diversity and Inclusion

Diversity, Equity and Inclusion

Adient strives to build a culture of diversity and inclusion through its purchasing and human resource practices and policies and works to eliminate discrimination and harassment in all of its forms, including that related to color, race, gender, sexual orientation and gender identity, age, pregnancy, caste, disability, union membership, ethnicity, national origin or religious beliefs.

Its CEO signed the “CEO Action for Diversity & Inclusion” pledge promulgated by the CEO Action for Diversity & Inclusion, and Adient is a member of the Center for Automotive Diversity, Inclusion & Advancement.

Adient develops and tracks annual diversity and inclusion goals and its CHRO provides quarterly updates to the executive team and board of directors.

Additionally, Adient supports a strong Women’s Resource Network (WRN), which is an employee-led, volunteer group open to all employees with the goal to improve attraction, retention, inclusion, and engagement of a diverse and global workforce.

Business Resource Groups at Adient, like the WRN, are organized by employees, undergo an official chartering process and must develop programming and initiatives focused in four areas:

Career, Commerce, Culture and Community.

Adient is working to expand the number of Resource Groups to include other under-represented groups.

Its CEO signed the "CEO Action for Diversity & Inclusion" pledge promulgated by the CEO Action for Diversity & Inclusion, the largest CEO-driven business commitment to advance diversity and inclusion in the workplace.

In addition, Adient is a member of the Center for Automotive Diversity, Inclusion and Advancement (CADIA).

Adient developed and tracks human capital metrics regarding diversity and inclusion, which the Chief Legal and Human Resources Officer reviews bi-annually with the board of directors.

Since success in this area requires listening to diverse voices, Adient also formed Diversity, Equity and Inclusion (DE&I) Councils in 2021 in each of its three business regions — the Americas, EMEA (Europe, the Middle East and Africa) and APAC (Asia Pacific).

The Councils drive strategic and tactical actions in the areas of talent acquisition and retention, communications and employee feedback, training and education, metrics and key performance indicators, as well as support Adient’s diverse Business Resource Groups.

This year Adient also launched two Business Resource Groups in the Americas - the African Ancestry and the True Colors Network, in addition to growing the existing Women’s Resource Network.

Additionally, Adient launched a global online training to all salaried employees that covered topics of respect in the workplace, diversity, and overcoming unconscious bias.

Succession and Talent Development

At Adient, we believe that attracting, developing, motivating and retaining employees is key to our sustainable and profitable growth.

We understand that, like customers, our employees and potential employees have choices of where to work, and we must compete for the best talent.

Adient supports employee development in multiple ways.

Adient has a global performance management process through which employees provide a self-assessment and managers provide evaluation and feedback on annual performance.

Adient has a global performance management process through which employees provide a self-assessment and managers provide evaluation and feedback on performance.

This process informs employee development goals.

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LTR is designed to be an inclusive process that promotes visibility of talent, increases the validity of succession plans, and ensures development efforts are applied efficiently.

Talent potential assessments and succession plans are calibrated with broader groups of leaders to drive

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consistency, awareness and alignment on decisions and development actions.

Adient's executive leadership provides annual updates on succession and talent development to the board of directors.

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The following table sets forth certain information with respect to Adient's executive officers as of the date of this filing:

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Name Age Position(s) Held Year Appointed to Present Position

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Stafeil 51 Executive Vice President and Chief Financial Officer 2016

Tiltmann 48 Senior Vice President, General Counsel and Secretary 2020

Tiltmann 49 Executive Vice President, Chief Legal and Human Resources Officer, and Corporate Secretary 2021

Berthelin is the Executive Vice President, EMEA of Adient.

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Del Grosso was the President and Chief Executive Officer of Chassix Holdings, Inc.

from 2016 to 2018.

(a supplier of chassis, brake and powertrain components) from 2016 to 2018.

He also served as President and Chief Executive Officer of Henniges Automotive, Inc.

from 2012 to 2015.

(a provider of sealing systems, anti-vibration components and encapsulated glass systems) from 2012 to 2015.

Del Grosso previously served as Vice President and General Manager of TRW Automotive (a supplier of automotive systems, modules and components) and, prior to that, as President and Chief Operating Officer of Lear Corporation (a manufacturer of automotive seating and electrical distribution systems).

Del Grosso has served as a Director and member of the Audit Committee of Cabot Corporation since April 2020.

He previously served on the Board of Directors of Lincoln Educational Services Corporation from 2014 to 2015.

Del Grosso is also a member of the Board of Directors of the National Association of Manufacturers.

Del Grosso is also a member of the Board of Directors of the trade association, National Association of Manufacturers.

Dorlack is the Executive Vice President, Americas of Adient.

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Prior to that, Mr.

Dorlack served as Executive Vice President – Global Procurement of ZF Friedrichshafen from 2015 to 2016, and Vice President, Global Purchasing, Supplier Development and Logistics of ZF Friedrichshafen from 2013 to 2015.

Dorlack served

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as Executive Vice President – Global Procurement of ZF Friedrichshafen from 2015 to 2016, and Vice President, Global Purchasing, Supplier Development and Logistics of ZF Friedrichshafen from 2013 to 2015.

Huang is the Executive Vice President, Asia of Adient.

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Stafeil previously served on the Board of Directors, and as Audit Committee Chairman, of each of Mentor Graphics Corporation and Metaldyne Performance Group.

Tiltmann has served as Senior Vice President, General Counsel and Secretary of Adient since 2020.

Tiltmann is the Executive Vice President, Chief Legal and Human Resources Officer, and Corporate Secretary of Adient.

Tiltmann served as Senior Vice President, General Counsel and Secretary of Adient from 2020 to 2021.

Prior to that, Ms.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business