What changed in this filing

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Item 1A. Risk Factors

2025-02-14 compared with 2024-02-08 · 101 added, 81 removed, 168 unchanged (52% of the section changed)

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• Our industry is cyclical and a decline in the production levels of our major customers, particularly with respect to models for which we are a significant supplier, or the financial distress of one or more of our major customers could adversely affect our financial performance.

Our sales are driven by the number of vehicles produced by our automotive manufacturer customers, which is ultimately dependent on consumer demand for automotive vehicles and the availability of raw materials and components, and our content per vehicle.

The automotive industry is cyclical and sensitive to general economic conditions, including interest rates, inflation, consumer spending levels and geopolitical issues.

Automotive sales and production can also be affected by the age of the vehicle fleet and related scrappage rates, labor relations issues and shortages, fuel prices, regulatory requirements, government initiatives, trade agreements, tariffs and other non-tariff trade barriers, the availability and cost of credit, the availability and cost of critical components needed to complete the production of vehicles, logistics issues, restructuring actions of our customers and suppliers, facility closures and increased competition, as well as consumer preferences regarding vehicle powertrains (including preferences regarding hybrid and electric vehicles), size, configuration and features, among other factors.

Our sales are driven by the number of vehicles produced by our automotive manufacturer customers and our content per vehicle.

The automotive industry is cyclical and sensitive to general economic conditions, including interest rates, inflation, consumer demand and spending levels, and geopolitical issues.

Automotive sales and production can also be affected by the age of the vehicle fleet and related scrappage rates, labor relations issues, labor shortages, fuel prices, regulatory requirements, government initiatives and incentives, trade agreements, tariffs and other non-tariff trade barriers, the availability and cost of credit, the availability and cost of raw materials and critical components, and logistics issues, as well as vehicle affordability and consumer preferences regarding vehicle powertrains (including preferences regarding hybrid and electric vehicles), size, configuration and features, among other factors.

Our sales and production may be further affected by new entrants to the industry, including domestic automakers in certain regions and non-traditional automakers, and the restructuring actions, including facility closures, of our customers and suppliers.

An economic downturn or other adverse industry conditions that result in a decline in the production levels of our major customers, particularly with respect to models for which we are a significant supplier, or the financial distress of one or more of our major customers could reduce our sales or otherwise adversely affect our financial condition, operating results and cash flows.

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Raw material, energy, commodity, product component and labor costs can be volatile.

Although we have developed and implemented strategies to mitigate the impact of such costs, these strategies, together with commercial negotiations with our customers and suppliers, do not typically offset all of the adverse impact.

Although we have developed and implemented strategies to mitigate the impact of increases in such costs, these strategies, together with commercial negotiations with our customers and suppliers, do not typically offset all of the adverse impact.

Certain of these strategies also may limit our opportunities in a declining price environment.

In addition, the availability of raw materials, energy, commodities, product components and labor fluctuates from time to time due to factors outside of our control, including trade laws and restrictions, natural disasters and other supply chain disruptions, which may impact our ability to meet the production demands of our customers.

Increases in the costs of raw materials, energy, commodities, product components and labor, or restrictions on the availability thereof, could adversely affect our financial condition, operating results and cash flows.

In addition, the availability of raw materials, energy, commodities, product components and labor fluctuates from time to time due to factors outside of our control, including regulatory requirements and restrictions, natural disasters and other supply chain disruptions, which may impact our ability to meet the production demands of our customers.

Increases in the costs of raw materials, energy, commodities, product

components and labor, or restrictions on the availability thereof, could adversely affect our financial condition, operating results and cash flows.

• The lack of commercial success of or an increase in directed component sourcing for a vehicle model for which we are a significant supplier could adversely affect our financial performance.

We receive purchase orders from our customers, which generally provide for the supply of a customer's requirements for a particular vehicle model and assembly plant for the life of a particular vehicle program, rather than for the purchase of a specific quantity of products.

We receive purchase orders from our customers that generally provide for the supply of a customer's requirements for a particular vehicle model and assembly plant for the life of a particular vehicle program, rather than for the purchase of a specific quantity of products.

It is possible that a particular vehicle model is not successful with consumers or that our customers elect to manufacture our products internally, purchase our products from other suppliers or increase the extent to which they require us to utilize specific suppliers or materials in the manufacture of our products.

The loss of business with respect to, the lack of commercial success of or an increase in directed component sourcing for a vehicle model for which we are a significant supplier could reduce our sales or margins and thereby adversely affect our financial condition, operating results and cash flows.

The loss of business due to these factors occurring could reduce our sales or margins and thereby adversely affect our financial condition, operating results and cash flows.

• Our inability to achieve product cost reductions to offset customer-imposed price reductions could adversely affect our financial performance.

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Prices may also be adjusted on an ongoing basis to reflect changes in product content/costs and other commercial factors.

Our financial performance is

largely dependent on our ability to achieve product cost reductions through product design enhancements and supply chain management, as well as manufacturing efficiencies and restructuring actions.

We also seek to enhance our financial performance by investing in product development, design capabilities and new product initiatives that respond to the needs and preferences of our customers and consumers.

We continually evaluate operational and strategic alternatives to improve our business structure by investing in vertical integration opportunities globally and rationalizing our product portfolio to improve profitability.

Our financial performance is largely dependent on our ability to achieve product cost reductions through product design enhancements, supply chain management, manufacturing efficiencies and restructuring actions.

We also seek to enhance our financial performance by investing in product development, design capabilities and new product initiatives that respond to and anticipate the needs of our customers and consumers.

We continually evaluate operational and strategic alternatives to improve our business structure and align our business with the changing needs of our customers and major industry trends affecting our business.

Our inability to achieve product cost reductions that offset customer-imposed price reductions could adversely affect our financial condition, operating results and cash flows.

• International trade policies, including protectionist trade policies, such as tariffs and sanctions, could adversely affect our financial performance.

Due to the interconnectedness of the global economy, policy changes in one area of the world can have an immediate and material adverse impact on markets around the world.

Changes in international trade policies, including:

(i) changes to existing trade agreements;

(ii) greater restrictions on free trade generally;

and (iii) significant increases in customs duties and tariffs on goods imported into the United States and reciprocal actions by other countries, can adversely affect our financial condition and operating results.

On February 1, 2025, President Trump announced the imposition of new tariffs on imports from Mexico, Canada and China, to take effect on February 4, 2025.

On February 3, 2025, President Trump announced that the tariffs imposed on imports from Mexico and Canada would be paused for thirty days.

The impact of these potential tariffs on our business and financial condition, if any, is subject to a number of factors that are not yet known, including the effective date and duration of such tariffs, the scope and nature of any tariffs, the amount of any tariffs, any countermeasures that the target countries may take in response to such tariffs.

In light of these uncertainties, we can provide no assurance that any mitigating actions that may become available to us, such as our ability to pass along some or all of the costs of any tariffs to some or all of our customers, will be successful.

In addition to potential increases in customs duties and tariffs in the United States and other countries, the United States-Mexico-Canada Agreement ("USMCA") is subject to renewal in 2026.

There can be no assurance that any newly negotiated terms in the USMCA will not adversely affect our business.

Also, China presents unique risks to U.S.

automotive manufacturers due to the strain in U.S.-China relations and the level of integration with key components in our global supply chain.

It remains unclear what specific actions the current U.S.

administration may take to resolve trade-related issues with China and other countries.

Further, the U.S.

and other governments could impose additional sanctions or export controls that could restrict us from doing business directly or indirectly in or with certain countries or parties, which could include affiliates.

Any of the above factors could impact our supply chain, as well as our operations, and adversely affect our financial condition and operating results.

• Adverse developments affecting or the financial distress of one or more of our suppliers could adversely affect our financial performance.

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In certain instances, entire industries may experience short-term capacity constraints.

Additionally, our production capacity, and that of our customers and suppliers, may be adversely affected by natural disasters or other significant disruptions.

Any such significant disruption could adversely affect our financial performance.

Furthermore, unfavorable economic or industry conditions could result in financial distress within our supply base, thereby increasing the risk of supply disruption.

An economic downturn or other unfavorable industry conditions in one or more of the regions in which we operate could cause a supply disruption and thereby adversely affect our financial condition, operating results and cash flows.

Additionally, our production capacity and costs, and that of our customers and suppliers, may be adversely affected by force majeure events, such as natural disasters, as well as tariffs, sanctions or other significant events.

Any such significant event could adversely affect our financial performance.

Furthermore, unfavorable economic or industry conditions in one or more of the regions in which we operate could result in financial distress within our supply base, which could cause a supply disruption and thereby adversely affect our financial condition, operating results and cash flows.

• A significant labor dispute involving us or one or more of our customers or suppliers or that could otherwise affect our operations could adversely affect our financial performance.

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Higher rates of employee separations may adversely affect us through decreased employee morale, the loss of knowledge of departing employees and the devotion of resources to recruiting and onboarding new employees.

• Our substantial international operations make us vulnerable to risks associated with doing business in foreign countries.

• Our substantial international operations make us vulnerable to risks associated with volatile economic and political environments.

We have substantial international operations, with manufacturing and distribution facilities in many foreign countries, including Mexico and countries in Africa, Asia, Central and South America, and Europe.

Some of the markets in which we

do business may have volatile economic and/or political environments.

Some of the markets in which we do business may have volatile economic and/or political environments.

This may expose us to heightened risks as a result of economic, geopolitical or other events, including:

– exposure to local economic conditions;

– political, economic and civil instability and uncertainty (including acts of terrorism, civil unrest, drug cartel-related and other forms of violence, and outbreaks of war, such as the actions taken by Russia in Ukraine);

– labor unrest;

– political, economic and civil instability and uncertainty (including acts of terrorism, civil unrest, drug cartel-related and other forms of violence, and outbreaks of war);

– labor scarcity and unrest;

– expropriation, governmental takeover and nationalization;

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– repatriation restrictions or requirements;

– trade wars;

– trade wars, tariffs or sanctions;

– concerns about human rights, working conditions and other labor rights and conditions and the environmental impact in foreign countries where our products are produced and raw materials and/or components are sourced, as well as changing labor, environmental and other laws in these countries;

– pandemic illness;

– pandemic illness and limited access to vaccines;

– increases in working capital requirements related to long supply chains;

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Our strategy is based on four pillars designed to drive growth and profitability:

(1) extend our market leadership position in Seating with priceable features;

(2) transform our E-Systems business through accelerated growth in connection systems, vehicle architecture evolution and electrification, and the rationalization of our product portfolio to improve profitability;

(3) build on our reputation for operational excellence through investment in Industry 4.0 technologies;

(1) extend our market leadership position in Seating with priceable features, including modularity and thermal comfort systems;

(2) transform our E-Systems business through accelerated growth in connection systems and vehicle architecture evolution and electrification;

(3) build on our reputation for operational excellence through organic and inorganic investments in automation and digital technologies;

and (4) prioritize people and the planet through our sustainability initiatives to drive business growth, cost reductions and improved employee retention.

Various factors, including the industry environment and the other matters described herein and in Part II — Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," including "— Forward-Looking Statements," could adversely affect our ability to execute our strategic objectives.

These risk factors include our failure to identify suitable opportunities for organic investment and/or acquisitions, our inability to successfully develop such opportunities or complete such acquisitions or our inability to successfully utilize or integrate the investments in our

Our failure to execute our strategic objectives could adversely affect our financial condition, operating results and cash flows.

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In addition, new program launches require a significant ramp up of costs;

however, our sales related to these new programs generally are dependent upon the timing and success of our customers' introduction of new vehicles.

Our inability to effectively manage the timing, quality and costs of these new program launches could adversely affect our financial condition, operating results and cash flows.

• We operate in a highly competitive industry and efforts by our competitors, as well as new non-traditional entrants to the industry, to gain market share could adversely affect our financial performance.

however, our sales related to

these new programs generally are dependent upon the timing and success of our customers' introduction of new vehicles.

Customer decisions on program launch timing may be impacted by industry conditions, government regulations and consumer preferences, and therefore, the timing of such launches may also be subject to change.

Our inability to effectively anticipate and manage the timing, quality and costs of these new program launches could adversely affect our financial condition, operating results and cash flows.

• We operate in a highly competitive industry and efforts by our competitors, as well as new entrants to the industry, to gain market share could adversely affect our financial performance.

We operate in a highly competitive industry.

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Our competitors' efforts to grow market share could exert downward pressure on our product pricing and margins.

In addition, the automotive industry has attracted, and will continue to attract, non-traditional entrants as a result of the evolving nature of the automotive vehicle market, including the increasing adoption of hybrid and electric vehicles.

Further, the global automotive industry is experiencing a period of significant technological change, including a focus on environmentally sustainable vehicles and subcomponents.

As a result, the success of portions of our business requires us to develop, acquire and/or incorporate new technologies and depends not only on our customers' ability to execute their strategies to exploit these technologies but also on the adoption of such technologies by end consumers.

Such technologies may be subject to rapid obsolescence.

Our inability to maintain access to these technologies (through development, acquisition or licensing) may adversely affect our ability to compete.

If we are unable to differentiate our products, maintain a low-cost footprint or compete effectively with technology-focused new market entrants, we may lose market share or be forced to reduce prices, thereby lowering our margins.

In addition, the automotive industry has attracted, and will continue to attract, new entrants, including domestic automakers in certain regions and non-traditional automakers as a result of the evolving nature of the automotive vehicle market, including the increasing adoption of hybrid and electric vehicles.

Further, the global automotive industry is experiencing a period of significant technological change, including a focus on electrification and digitization.

If we are unable to differentiate our products, maintain a low-cost footprint or compete effectively to win business with new domestic automakers and other new entrants, we may lose market share or be forced to reduce prices, thereby lowering our margins.

Any such occurrences could adversely affect our financial condition, operating results and cash flows.

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The impacts of these changes on us are uncertain and could ultimately prove dramatic.

If we do not respond appropriately, the evolution toward electrification and other energy sources could adversely affect our business.

The increased adoption of electrified and other non-internal combustion-based powertrains, such as fuel cells, may result in lower demand for some of our products.

The evolution of the industry toward electrification has also attracted increased competition from entrants outside of the traditional light vehicle industry, some of whom may seek to provide products which compete with ours.

Failure to innovate and to develop or acquire new and compelling products that capitalize upon new technologies in response to these evolving consumer preferences and demands could adversely affect our financial condition, operating results and cash flows.

We rely on the accuracy, capacity and security of our information technology networks.

Despite the security measures that we have implemented, including those measures related to cybersecurity, our operational systems (including business, financial, accounting, human resources, product development and manufacturing processes), as well as those of our customers, suppliers and other service providers, and certain of our connected vehicle systems and components that may collect and store sensitive end-user data (which could include personally identifiable information) could be breached or damaged by computer viruses, malware, phishing attacks, denial-of-service attacks, human error, natural or man-made incidents or disasters or unauthorized physical or electronic access.

If we do not respond appropriately, the evolution toward electrification and other energy sources, including the timing of such evolution, could adversely affect our business.

The increased adoption of hybrid and fully electrified powertrains may result in lower demand for some of our products.

The evolution of the industry toward electrification has also attracted increased competition from new entrants to the light vehicle industry.

Failure to innovate and to develop or acquire new and compelling products that capitalize upon new technologies in response to evolving consumer preferences and customer landscape could adversely affect our financial condition, operating results and cash flows.

• A disruption in our information technology systems, or those of our customers, suppliers, sub-suppliers or other contract parties, including a disruption related to cybersecurity, and other cybersecurity risks, such as a security incident resulting in unauthorized access to or theft of personal or other sensitive information, could adversely affect our financial performance.

We rely on the accuracy, capacity, availability and security of our information technology networks.

Despite the security and business continuity measures that we have implemented, including those measures related to cybersecurity, our operational systems (including business, financial, accounting, human resources, product development and manufacturing processes), as well as those of our customers, suppliers and other service providers, and certain of our connected vehicle systems and components that may collect and store sensitive end-user data (which could include personal information) could be breached, disabled or damaged by, without limitation, internal or external threat actors, computer viruses, malware, phishing attacks, denial-of-service attacks, supply chain attacks, human error, ransomware attacks, software bugs, server malfunctions, software or hardware failures, natural or man-made incidents or disasters, or unauthorized physical or electronic access.

These types of incidents have become more prevalent and pervasive across industries, including our industry, and are expected to continue, if not increase, in the future.

In particular, ransomware or other attacks that are intended to disrupt our business operations are becoming increasingly prevalent, particularly for manufacturing companies, and can lead to significant interruptions in operations and the ability to provide products or services, loss of sensitive data and income, reputational harm and diversion of funds.

Extortion payments may alleviate the negative impact of a disruptive event, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments.

We are incorporated into the supply chain of a large number of companies globally.

As a result, if our products or services are compromised, unavailable or unable to be manufactured or delivered, a significant number or, in some instances, all of our customers' operations and their data could be simultaneously affected.

Our contracts with customers and others may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages or claims related to our security obligations.

The potential

liability and associated consequences we could suffer as a result of such a large-scale event impacting multiple customers could be catastrophic and result in irreparable harm.

The secure operation of our information technology networks, and the processing and maintenance of information by these networks, is critical to our operations and strategy.

A breach could result in business disruption, including the vehicle

systems and components that we supply to our customers or our plant operations, theft of our intellectual property, trade secrets or customer information or unauthorized access to personal information, such as that of our employees or end consumers of vehicles that contain certain of our connected vehicle systems or components.

A security incident could result in business disruption, including interruptions of manufacturing and distribution of vehicle systems and components that we supply to our customers or our plant operations, theft of our intellectual property, trade secrets or customer information, or unauthorized access to or theft of personal information, such as that of our employees or end consumers of vehicles that contain certain of our connected vehicle systems or components.

Although cybersecurity and the continued development and enhancement of our controls, processes and practices designed to protect our operational systems and products from attack, damage or unauthorized access are a high priority for us, our actions and investments may not be deployed quickly enough or successfully protect our systems against all vulnerabilities, including technologies developed to bypass our security measures.

In addition, outside parties may attempt to fraudulently induce employees or customers to disclose access credentials or other sensitive information in order to gain access to our secure systems and networks.

There are no assurances that our actions and investments to improve the maturity of our systems, processes and risk management framework or remediate vulnerabilities will be sufficient or deployed quickly enough to prevent or limit the impact of any cyber intrusion or security breach.

For this reason, we maintain cyber liability insurance to provide additional support during significant events, as well as a level of financial protection in the event of certain cybersecurity-related losses.

Moreover, because the techniques used to gain access to or sabotage systems often are not recognized until launched against a target, we may be unable to anticipate the methods necessary to defend against these types of attacks, and we cannot predict the extent, frequency or impact these attacks may have on us.

To the extent that our business is interrupted, including the vehicle systems and components that we supply to our customers or our plant operations, or data is lost, destroyed or inappropriately used or disclosed, such disruptions could adversely affect our competitive position, relationships with our customers, financial condition, operating results and cash flows and/or subject us to regulatory actions, including those contemplated by data privacy laws and regulations like the European Union General Data Privacy Regulation and California Consumer Privacy Act, or litigation.

In addition, outside parties may attempt to fraudulently induce employees, vendors or customers to disclose access credentials or other sensitive information in order to gain access to our secure systems and networks, or to divert funds or wire transfers.

We maintain cyber liability insurance to provide additional support during significant events, as well as a level of financial protection in the event of certain cybersecurity-related losses, but there is no guarantee that our coverage will be sufficient or applicable in all cases.

Moreover, because the techniques used to gain access to or adversely impact systems often are not recognized until launched against a target, we may be unable to anticipate the methods necessary to defend against these types of attacks, and we cannot predict the extent, frequency or impact these attacks may have on us.

It may also be difficult and/or costly to detect, investigate, mitigate, contain and remediate a security incident.

Our efforts to do so may not be successful.

Actions taken by us or the third parties with whom we work to detect, investigate, mitigate, contain and remediate a security incident could result in outages, data losses and disruptions of our business.

In addition, the information technology systems and software that we and our vendors use are vulnerable to outages, breakdowns, software vulnerabilities, coding errors and other damage from service interruptions, system malfunctions, natural disasters, terrorism, war, and telecommunication and electrical failures.

For example, our business operations suffered temporary interruptions and impacts from the global CrowdStrike Holdings, Inc.

event in July 2024.

To the extent that our business is interrupted, including the vehicle systems and components that we supply to our customers or our plant operations, or data is lost, destroyed or inappropriately accessed, used or disclosed, such disruptions could adversely affect our competitive position, operating capacity, ability to provide our goods and services, relationships with our customers, financial condition, operating results and cash flows and/or subject us to regulatory actions, including those contemplated by data privacy laws and regulations such as European Union General Data Privacy Regulation, China Cyber Security Laws including the China Personal Information Protection Law, India's Information Technology Act and supplementary rules, and the California Consumer Privacy Act, or litigation.

In addition, we may be required to incur significant costs to protect against the damage caused by these disruptions or security breaches in the future.

We are also dependent on security measures that some of our customers, suppliers and other third party service providers take to protect their own systems and infrastructures.

Any security breach of any of these third-parties' systems could result in unauthorized access to our or our customers' or suppliers' sensitive data or our own information technology systems, cause us to be non-compliant with applicable laws or regulations, subject us to legal claims or proceedings, disrupt our operations, damage our reputation or cause a loss of confidence in our products or services, any of which could adversely affect our financial performance.

• Pandemics, epidemics, disease outbreaks and other public health crises, such as the COVID-19 pandemic, have disrupted our business and operations, and future public health crises could adversely affect our business, financial condition and operating results.

Pandemics, epidemics or disease outbreaks in the United States or globally, including the COVID-19 pandemic, have disrupted, and may disrupt in the future, our business, which could materially affect our financial condition including liquidity, operating results and future expectations.

Any security incident of any of these third parties' systems could result in unauthorized access to our or our customers' or suppliers' sensitive data or our own information technology systems, cause us to be non-compliant with applicable laws or regulations, subject us to legal claims or proceedings, disrupt our operations, damage our reputation or cause a loss of confidence in our products or services, any of which could adversely affect our financial performance.

Our ability to monitor these third parties' information security practices is limited, and these third parties may not have adequate information security measures in place.

If the third parties with whom we work experience a security incident or other interruption, we could experience adverse consequences.

While we may be entitled to damages if the third parties with whom we work fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award.

• Pandemics, epidemics, disease outbreaks and other public health crises have disrupted our business and operations, and future public health crises could adversely affect our business, financial condition and operating results.

Pandemics, epidemics or disease outbreaks in the United States or globally have disrupted, and may disrupt in the future, our business, which could materially affect our financial condition including liquidity, operating results and future expectations.

Any such events may adversely impact our global supply chain and global manufacturing operations and cause us to again suspend our operations.

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and (5) an impaired ability to access credit and capital markets.

Any future public health crises, could adversely affect our business, financial condition, operating results and cash flows going forward.

public health crises, could adversely affect our business, financial condition, operating results and cash flows going forward.

• Perspectives on global climate change and other sustainability matters by various stakeholders could adversely affect our business.

Customer, investor, employee and other stakeholder expectations of us and our supply base in areas such as the environment, social matters and corporate governance continue to evolve.

Customer, investor, employee and other stakeholder expectations of us and our supply base in matters involving sustainability continue to evolve.

The enhanced stakeholder focus on sustainability requires continuous monitoring of various and evolving standards and their associated requirements, and may result in potentially differing perspectives on these topics among stakeholders.

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Our effective tax rate and cash tax liability in the future could be adversely affected by the enactment of new tax legislation, changes in the level and mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, and changes in tax holiday status.

The carrying value of deferred tax assets, which are predominantly in the United Sates, is dependent on our ability to generate future taxable income in the United States.

The carrying value of deferred tax assets, which are predominantly in the United States, is dependent on our ability to generate future taxable income in the United States.

We are also subject to ongoing tax audits globally.

These audits can involve complex issues, which may require an extended period of time to resolve and can be highly judgmental.

These audits can involve complex issues, which may require an extended period of time to resolve and can be

highly judgmental.

Tax authorities may disagree with certain of our tax reporting positions and, as a result, assess additional taxes against us.

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The debt instruments governing our indebtedness contain covenants that may restrict our business activities or our ability to execute our strategic objectives, and our failure to comply with these covenants could result in a default under our indebtedness.

We also lease certain buildings and equipment under non-cancelable lease agreements with

terms exceeding one year, which are accounted for as operating leases.

We also lease certain buildings and equipment under non-cancelable lease agreements with terms exceeding one year, which are accounted for as operating leases.

Additionally, any downgrade in the ratings that rating agencies assign to us and our debt may ultimately impact our access to capital markets.

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We expect that these regulatory and customer requirements will continue to increase in number and breadth of scope for the foreseeable future, thereby affecting our business.

Complying with these requirements will likely require us to incur costs, make investments in new innovations and/or change product and production processes, certain of which could be significant.

Complying with these requirements will likely require us to incur costs, make investments in new innovations, change product and production processes and/or modify product supply chains, certain of which actions could be significant.

Significant challenges may exist to comply with new legislative efforts around supply chain transparency due to the inherent complexity of global automotive supply

If we fail to comply with these requirements, we could be subject to lost business opportunities and/or future liabilities, which could adversely affect our reputation, business, financial condition, operating results and cash flows.

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We and the automotive industry are subject to a variety of federal, state, local and foreign laws and regulations, including those related to health, safety and, increasingly, sustainability matters.

Governmental regulations also affect taxes and levies, capital markets, healthcare costs, energy usage, data privacy, international trade and immigration, human rights and other labor issues (including labor costs), all of which may have a direct or indirect effect on our business and the businesses of our customers and suppliers.

Governmental regulations also affect taxes and levies, capital markets, healthcare costs, energy usage, data privacy, international trade, including tariffs and sanctions, human rights, immigration and other labor issues (including labor costs), all of which may have a direct or indirect effect on our business and the businesses of our customers and suppliers.

We cannot predict the substance or impact of pending or future legislation or regulations, or the application thereof.

The introduction of new laws or regulations or changes in existing laws or regulations, or the interpretation thereof, could increase the costs of doing business for us or our customers or suppliers or restrict our actions and adversely affect our financial condition, operating results and cash flows.

The introduction of new laws or regulations or changes in existing laws or regulations, including those in connection with the new U.S.

administration, or the interpretation thereof, could increase the costs of doing business for us or our customers or suppliers or restrict our actions and adversely affect our financial condition, operating results and cash flows.

• We may incur fines or penalties, damage to our reputation or other adverse consequences if our employees, suppliers, sub-suppliers or other contract parties, agents or business partners violate anti-bribery, competition, export and import, trade sanctions, data privacy, environmental, human rights or other laws.

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Bribery Act and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to government officials for the purpose of obtaining or retaining business, and we operate in many parts of the world that have experienced government corruption to some degree.

We cannot provide assurance our internal controls will always protect us from the improper conduct of our employees,

suppliers, sub-suppliers or other contract parties, agents and business partners.

Violations of these laws, which are complex, may conflict with laws of other jurisdictions and often are difficult to interpret and apply, could subject us to civil or criminal investigations in the United States and other jurisdictions, could lead to substantial civil or criminal, monetary and non-monetary penalties and related stockholder lawsuits, could lead to increased costs of compliance and could damage our reputation, business, financial condition, operating results and cash flows.

We cannot provide assurance our internal controls will always protect us from the improper conduct of our employees, suppliers, sub-suppliers or other contract parties, agents and business partners.

Violations of these laws, which are complex, may conflict with laws of other jurisdictions and often are difficult to interpret and apply, could subject us to civil or criminal investigations in the United States and other jurisdictions, could lead to substantial civil or criminal, monetary and non-monetary penalties and related shareholder lawsuits, could lead to increased costs of compliance and could damage our reputation, business, financial condition, operating results and cash flows.

• We are required to comply with environmental laws and regulations that could cause us to incur significant costs.

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Our intellectual property plays an important role in maintaining our competitive position in a number of the markets that we serve.

Failure to successfully protect our intellectual property could adversely impact our business.

Furthermore, we may not be able to readily identify unauthorized use or take appropriate and timely steps to enforce our intellectual property rights.

Also, while we believe we have the necessary rights to use all of the intellectual property we use, if we are found to infringe on the rights of others, we could be adversely impacted.

Developments or assertions by or against us relating to intellectual property rights could adversely affect our financial condition, operating results and cash flows.

• International trade policies, including protectionist trade policies, such as tariffs and sanctions, could adversely affect our financial performance.

Because of the interconnectedness of the global economy, policy changes in one area of the world can have an immediate and material adverse impact on markets around the world.

Changes in international trade policies, including:

(i) changes in policies pertaining to the environment;

(ii) changes to existing trade agreements;

(iii) greater restrictions on free trade generally;

and (iv) significant increases in customs duties and tariffs on goods imported into the United States, can adversely affect our financial condition and operating results.

The United States-Mexico-Canada Agreement ("USMCA"), which serves as the successor agreement to the North American Free Trade Agreement, became effective on July 1, 2020.

There can be no assurance that the ongoing transition to the higher North American automotive content requirements in the USMCA will not adversely affect our business.

In addition, China presents unique risks to U.S.

automotive manufacturers due to the strain in U.S.-China relations, China’s unique regulatory landscape and the level of integration with key components in our global supply chain.

It remains unclear what specific actions the current U.S.

administration may take to resolve trade-related issues with China and other countries.

Further, the U.S.

government, other governments and international organizations could impose additional tariffs, sanctions or export controls that could restrict us from doing business directly or indirectly in or with certain countries or parties, which could include affiliates.

Any of the above could impact our supply chain, as well as our operations, and adversely affect our financial condition and operating results.

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 1A. Risk Factors