What changed in this filing

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Item 1. Business

2022-11-22 compared with 2021-11-23 · 74 added, 42 removed, 206 unchanged (36% of the section changed)

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Adient designs, manufactures and markets a full range of seating systems and components for passenger cars, commercial vehicles and light trucks, including vans, pick-up trucks and sport/crossover utility vehicles.

Adient operates in 208 wholly- and majority-owned manufacturing or assembly facilities, with operations in 33 countries.

Adient operates more than 200 wholly- and majority-owned manufacturing or assembly facilities, with operations in 31 countries.

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

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Global Manufacturing Footprint Adient is a global leader in automotive seating.

With 75,000 employees operating in 208 manufacturing and assembly plants in 33 countries worldwide, Adient produces and delivers automotive seating for all vehicle classes and all major OEMs.

With 75,000 employees operating in more than 200 manufacturing and assembly plants in 31 countries worldwide, Adient produces and delivers automotive seating for all vehicle classes and all major OEMs.

From complete seating systems to individual components, Adient’s manufacturing capabilities span every aspect of the automotive seat-making process.

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

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.

Ltd., FAW Group Corporation, Proton Holdings Berhad, Ashok Leyland, Tata Motors Limited and Zhejiang Geely Holding Group Co., Ltd.

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

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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:

In seating, three sourcing patterns exist:

Core seat structures :

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Some OEMs are conducting the design and engineering internally and are selecting suppliers that have the capability to manufacture products on a worldwide basis and adapt to regional variations.

As a supplier with global scale and strong design, engineering and lean manufacturing capabilities in both complete seat systems and components Adient is well-positioned to accommodate each of these three sourcing pattern developments.

Shorter Product Development Cycles As a result of new safety and environmental regulations, as well as a trend of more rapid customer preference changes, OEMs are requiring suppliers to respond faster with new designs and product innovations.

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Independent suppliers that represent the principal competitors of Adient include Lear Corporation, Toyota Boshoku Corporation, Faurecia SA and Magna International Inc.

Adient's deep vertical integration, global footprint and broad product offering make it well positioned to compete against the traditional global Tier-1's and component specialists.

Adient's deep vertical integration, global footprint and broad product offering make it well positioned to compete against the traditional global Tier-1 suppliers and component specialists.

Raw Materials

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

Continuing into fiscal 2022, the automotive industry has experienced a period of significant volatility in commodity prices.

This price volatility may continue into the future as demand increases and/or supply remains

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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.

Price volatility has resulted in an overall increase of input costs for Adient that may not be, or may only be partially, offset through customer negotiations.

During fiscal 2023, commodity prices and availability could fluctuate throughout the year and significantly affect Adient's results of operations.

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Adient, from time to time, grants licenses under its patents and technology and receives licenses under patents and technology of others.

Adient's trademarks, certain of which are material to its business, are registered or otherwise legally protected in the United States and many non-U.S.

Adient's trademarks are registered or otherwise legally protected in the United States and many non-U.S.

countries where products and services of Adient are sold.

Adient, from time to time, becomes involved in trademark licensing transactions.

Most works of authorship produced for Adient, such as computer programs, catalogs and sales literature, carry appropriate notices indicating Adient's claim to copyright protection under U.S.

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, National Highway Traffic Safety Administration), its customers and its suppliers to proactively engage in federal, state and international public policy processes.

Environmental, Health, Safety and Legal Matters

Legal Matters

Adient is involved in various lawsuits, claims and proceedings incident to the operation of its businesses, including those pertaining to product liability, environmental, safety and health, intellectual property, employment, commercial and contractual matters, and various other matters.

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Further details regarding Adient's commitments and contingencies is provided in Part II, Item 8 of this Form 10-K in Note 19, "Commitments and Contingencies," of the notes to consolidated financial statements.

Environmental, Social and Governance

At Adient, we recognize robust and responsible environmental, social and governance (ESG) policies and practices are essential to the long-term success of our business and the well-being of our stakeholders, including our investors, employees, suppliers, customers and communities.

We are weaving sustainability into our company’s DNA by integrating ESG principles into our product development initiatives, manufacturing processes, procurement practices, corporate governance activities and other key business areas.

Our Board of Directors and senior managers ensure we operate our business ethically and in accordance with applicable laws and regulations, and, as appropriate, they oversee and implement our ESG policies and strategies with input from a cross-functional team of subject matter experts across our organization.

We regularly communicate our ESG targets and

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related actions to our stakeholders through our SEC filings, media releases, quarterly earnings reports and our annual corporate sustainability report.

Production Processes

Adient remains committed to improving sustainability in its global operations and to utilize standardized processes to reduce energy consumption, conserve water and generate less waste and emissions at our facilities globally.

In fiscal year 2021, Adient set a goal of reducing its scope 1 and 2 greenhouse gas emissions 75% by 2030 (with 2019 as our base year), and continues to make progress toward that goal.

Some recent examples of how Adient is reducing emissions and improving sustainability in its operations include:

• Investing in more efficient equipment such as variable-speed air compressors and higher-efficiency HVAC units

• Replacing inefficient lighting with LED lighting

• Conducting hunts for sustainability opportunities at the facility level

• Purchasing ultrasonic air leak detectors to find and repair leaks on the production line

• Reconfiguring shipping racks and packaging to optimize transportation logistics and save fuel

In addition, several of Adient’s facilities generate renewable electricity on-site via solar panel installations, and more than 40 of its locations now attribute 100% of their electricity consumption to renewable sources.

Sustainability has been an inherent part of product development and innovation at Adient for more than three decades, and customers’ sustainability targets are closely tracked to ensure its efforts align with the needs and goals of its customers.

More recently, vehicle electrification and a general move toward increasingly efficient transportation have emphasized the need for automotive seating products that are lighter, slimmer and contain more environmentally friendly materials than traditional seating products.

To help meet this need, Adient has developed products such as the Soft Back Panel, which integrates 70% recycled PET (polyethylene terephthalate) while improving knee clearance and reducing the weight of each seat by as much as 2 kg.

Through Adient’s Evolution of Seating Systems Sustainability (ES 3 ) approach to product design, Adient is continuously identifying and integrating materials and manufacturing methods that minimize environmental impact and promote a circular economy.

Adient also recognizes the importance of its supply chain’s environmental risks and impacts and are working with its suppliers to reduce scope 3 (value chain) emissions 35% by 2030 (with 2019 as the base year).

In 2022, Adient began mapping its complex supply chain, and in fiscal year 2023, Adient plans to implement a supplier due diligence tool — which, in part, calculates greenhouse gas emissions per commodity based on its supplier spend — to assess ESG risks within the supply chain and fine-tune the roadmap for reaching its scope 3 emissions-reduction goal.

As noted in Adient’s recently published Deforestation Policy, the Company is also committed to procuring its forest commodities from more sustainable sources in order to reduce the impact on deforestation and protect natural habitats globally.

Adient continues to work to protect the human rights and well-being of its employees, suppliers, customers and communities in which Adient operates globally.

To those ends, Adient recently published a Human Rights Policy Statement, which outlines its commitment and defines the policies and procedures the Company has in place for respecting human rights, and a Diversity, Equity and Inclusion (DE&I) Commitment Statement, which illustrates why and how Adient is creating a safe, respectful, diverse and inclusive work culture.

Additionally, Adient is proud to support women-, minority- and veteran-owned businesses by spending more than $1 billion with diverse suppliers every year.

Human Capital Resources

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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.

Our Executive Vice President, Chief Legal and Human Resources Officer, and Corporate Secretary, reporting directly to the Chief Executive Officer (CEO), oversees Adient’s 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.

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

Adient’s workforce composition (including employees at consolidated joint ventures), as of September 30, 2022, consists of approximately:

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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.

Adient also provides and encourages many forms of corporate communication such as town hall meetings, open-door policy and an 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 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.

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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 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 implemented and maintains a health and safety management system that is certified to the ISO 45001 Occupational Health and Safety standard.

Globally, 100% of Adient’s facilities are internally audited and compliant, and 60% are also third-party audited and certified.

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

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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.

Adient provides monthly updates on health and safety to its board of directors, which during fiscal 2022, included updates on the return-to-work health and safety protocols in various geographies as a result of COVID-19.

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, the largest CEO-driven business commitment to advance diversity and inclusion in the workplace.

Its CEO signed the "CEO Action for Diversity & Inclusion" pledge promulgated by the CEO Action for Diversity & Inclusion initiative, 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).

In September 2022 Adient published two new documents - a Human Rights Policy Statement and a Diversity, Equity & Inclusion (DE&I) Commitment Statement - each of which emphasizes the Company's commitment to protecting the safety, well-being and human rights of our people while driving a diverse and inclusive work culture.

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

Since success in this area requires listening to diverse voices, Adient established Diversity, Equity and Inclusion (DE&I) Councils 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.

While the three councils primarily work within their regions, they also communicate and collaborate across regions to ensure alignment and progress toward enterprise-wide DE&I goals.

Additionally, Adient has an annual global online training to all salaried employees focused on DE&I.

In 2022, Adient launched one Business Resource Group (BRG) in the Americas - the Hispanic Origins Latino Ancestry group (HOLA!) - in addition to growing the existing African Ancestry BRG, True Colors Network, and Women’s Resource Network.

We continue to develop and refine our diversity initiatives to achieve our DE&I vision of being a premier employer that champions an inclusive and equitable work culture enriched by our diversity, where all employees are valued and respected.

Succession and Talent Development

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This process informs employee development goals.

Adient's Leadership Talent Review (LTR) is its annual process for identifying and evaluating talent for the purposes of aligning individual aspirations and development plans with the organization's needs and building a diverse pipeline of leaders to mitigate leadership vacancy risk.

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

Adient's Leadership Talent Review (LTR) is its annual

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consistency, awareness and alignment on decisions and development actions.

process for identifying and evaluating talent for the purposes of aligning individual aspirations and development plans with the organization's needs and building a diverse pipeline of leaders to mitigate leadership vacancy risk.

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 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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James Huang 61 Executive Vice President, Asia 2019

Smith 53 Vice President and Chief Accounting Officer 2019

Smith 54 Senior Vice President and Chief Accounting Officer 2019

Stafeil 52 Executive Vice President and Chief Financial Officer 2016

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Del Grosso is the President and Chief Executive Officer and a Director of Adient.

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

(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.

(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 trade association, National Association of Manufacturers.

Del Grosso joined Adient in October 2018 from automotive supplier Chassix, where he served as president and CEO.

From 2012 to 2015, he served as president and CEO at Henniges Automotive.

Del Grosso held leadership roles at TRW Automotive from 2007 to 2012, where he last served as vice president and general manager for the company’s global braking and suspension operations.

Prior to joining TRW Automotive, Mr.

Del Grosso spent more than 20 years at Lear Corporation in a variety of engineering and operational roles, the last being president and chief operating officer (COO).

Del Grosso holds a Master of Business Administration (MBA) from the Eli Broad College of Business at Michigan State University, as well as a Bachelor of Science degree in mechanical engineering from Lawrence Technological University.

He serves as a director and member of the Safety, Health, Environment and Sustainability Committee at Cabot Corp., and as a trustee of The Committee for Economic Development of The Conference Board (CED).

His CED activities include co-chairing the CED Trade and Economic Globalization Committee, being a member of the Education Committee and serving as a member of the CED Task Force on Climate, The Environment, and Energy.

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Dorlack is the Executive Vice President, Americas of Adient.

In October 2022, the Company announced that Mr.

Dorlack will be appointed as Executive Vice President and Chief Financial Officer effective December 1, 2022.

Dorlack served as Vice President and Chief Purchasing Officer of Adient from 2018 to 2019.

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Prior to that, Mr.

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.

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.

Huang is the Executive Vice President, Asia of Adient.

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from 2014 to 2016.

Smith is the Vice President and Chief Accounting Officer of Adient.

Smith is the Senior Vice President and Chief Accounting Officer of Adient.

Smith served as Adient’s Assistant Corporate Controller from 2016 to 2019.

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Stafeil is the Executive Vice President and Chief Financial Officer of Adient.

In October 2022, the Company announced that Mr.

Stafeil will be resigning as Executive Vice President and Chief Financial Officer effective November 30, 2022.

Stafeil was Executive Vice President, Chief Financial Officer of Visteon Corporation from 2012 to 2016.

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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