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1、ANNUAL REPORT2022AAM DELIVERS POWER THAT MOVES THE WORLD.As a leading global Tier 1 Automotive and Mobility Supplier,AAM designs,engineers and manufactures Driveline and Metal Forming technologies to support electric,hybrid and internal combustion vehicles.Headquartered in Detroit with over 80 facil
2、ities in 18 countries,AAM is bringing the future faster for a safer and more sustainable tomorrow.To learn more,visit .2022 FINANCIALHIGHLIGHTS$5.8BSALES$449MCASH PROVIDED BY OPERATING ACTIVITIES$747MADUSTED EBITDA1AAM ended 2022 with solid results while successfully navigating through high-producti
3、on volatility stemming from ongoing supply chain challenges and sub-14 million light vehicle industry sales in the U.S.the lowest the industry has experienced in 11 years.AAM continues to adapt to difficult market conditions thanks to our culture of innovation and operational excellence.Despite hurd
4、les such as elevated costs,labor shortages,and supply-chain issues,AAM ensured continuity of supply with consistent on-time delivery with exceptional quality throughout the year.As we enter 2023,the industry faces many variables,but as a management team,we are committed to operational excellence,qua
5、lity,and technology leadership tenets that differentiate AAM.In 2022,AAM generated approximately$5.8 billion in sales,$747 million in adjusted EBITDA and net cash provided by operating activities of$449 million.With this cash flow from operations,we continued to reduce our long-term debt and strengt
6、hen our balance sheet a top priority for this management team.Our long-term goals are very clear as we manage through the near-term turbulance.We remain committed to becoming the leader in global electric propulsion while maintaining and growing our profitable core business.AAMs positioning is to be
7、 agnostic to changes in global propulsion.Todays highly competitive and volatile market brings challenges,but we view them as opportunities.ADVANCING GLOBAL MOBILITY THROUGH INNOVATIVE TECHNOLOGIES AND SUSTAINABLE SOLUTIONS2Progress on our long-term goals was evident in 2022.In the past year,we form
8、ally announced that we have begun to supply electric drive units(EDUs)for the super high-performance Mercedes AMG GT 63 S E PERFORMANCE.We also announced our electric-beam axle award with EKA Mobility in Asia and contracts to supply Volvo Cars with gears for its next generation front and rear electr
9、ic drive units.Early in 2022,we announced our investment in Autotech Ventures that will provide access to new opportunities that complement AAMs mission to develop and produce the industrys most efficient and powerful electric drive units.Furthermore,our efforts in developing class-leading electric
10、drives were clearly recognized by our receiving three PACE Awards for our innovative electric vehicle technology and collaboration.We received multiple awards(PACE Award and PACE Innovation Partnership Award)for our P3 electric drive on the Mercedes-AMG GT 63 S E PERFORMANCE vehicle and for our over
11、all collaboration with Mercedes.We also received a third award(PACEpilot Innovation to Watch)for our integrated 3-in-1 wheel-end electric drive unit,which includes a motor,gearbox,and inverter in one single,compact,lightweight package.This electric drive technology platform provides excellent applic
12、ation flexibility from cars to light commercial heavy-duty trucks,including an electric beam configuration.This technology will start volume production in the coming years.These awards further demonstrate AAMs electrification leadership,which was also recognized in 2020 with two PACE Awards for the
13、companys electric drive innovation on the Jaguar I-PACE.While we pivot to electrification,driven by our customers and the market,we continue to enjoy success in our legacy business.Whether internal combustion or electrification,every AAM product and technology is important to us.This past year,we an
14、nounced that we secured contracts worth over$10 billion of lifetime revenue for next-generation full-size truck axle programs with multiple customers.By securing our legacy core business,we are well positioned to fund our future growth.AAM will continue to look for growth organically and strategical
15、ly.In June,we completed our acquisition of the Tekfor Group.This move leverages our core strengths,diversifies our geographic and customer sales mix,and increases our electrification product portfolio.Based in Hausach,Germany,the Tekfor Group is a leading specialist in automotive fasteners and metal
16、-formed components for driveline,powertrain,and E-mobility applications.We estimate approximately 40%of Tekfors business will be propulsion agnostic by 2025.Our teams continue to seek high value,quick-return bolt-on acquisition opportunities that play to our core strengths and logically add to our p
17、roduct portfolio.AAMs electric driveline technology powers AMGs first plug-in hybrid(PHEV)model,the Mercedes-AMG GT 63 S E PERFORMANCE.AAM supplies the performance cars rear drive unit,which was named a 2022 Automotive News PACETM Award winner.3Scope 1,2&3 EmissionsACHIEVE NET ZERO CARBON BY 2040Ene
18、rgy100%RENEWABLE ENERGY SOURCING IN THE U.S.BY 2025At AAM,we place high priority on sustainability and DEI because we believe they will contribute meaningfully to our future success.In 2022,we made great strides in our environmental,social,and governance objectives.In fact,our goal to have net-zero
19、greenhouse gas emissions across the value chain was validated by the climate-action organization Science Based Targets initiative(SBTi).I strongly encourage you to read about our goals and successes in our 2022 Sustainability Report when it is published on our website this spring.The past year was v
20、ery eventful.We continued to demonstrate our operational excellence by navigating volatile market conditions while delivering high-quality products that improve vehicle performance and keep drivers safe.As production volumes recover,our prospects remain bright as consumers continue to favor light tr
21、ucks.Looking into the future,we are confident our internally designed electric drive technology will play an important role in the pivot to electrification.Our expertise in power density,torque transfer,gears,noise-vibration-harshness reduction,heat management,and systems integration will position u
22、s to be the premier supplier of electric propulsion systems,subsystems,and components.We will accomplish this mission with integrity and inclusivity.I am very proud to be leading an organization full of dedicated and talented associates.Together,I look forward toBringing the Future Faster.David C.Da
23、uchChairman and Chief Executive OfficerCO24WaterZERO INCIDENTS OF WATER CONTAMINATION AND WATER SCARCITY IN WATERSHEDS WHERE WE OPERATEWasteZERO-WASTE-TO-LANDFILL STATUS FOR ALL FACILITIES BY 20355 LEADERSHIPAs of March 9,2023OFFICERSBOARD OF DIRECTORSDavid C.DauchChairman of the Board&Chief Executi
24、ve OfficerDavid C.Dauch 4Chairman of the Board&Chief Executive OfficerJames A.McCaslin 1,2,3,4,5Retired President&Chief Operating OfficerHarley Davidson Motor CompanyJohn F.Smith 1,4,5Principal of Eagle AdvisorsRetired Group Vice President,General MotorsMichael K.SimontePresidentElizabeth A.Chappell
25、 2,5Former President&Chief Executive Officer,Detroit Economic ClubWilliam P.Miller II 1,5Senior Managing Director:Capital Markets,Investments and Governance Financial Markets International,Inc.Samuel Valenti III 1,2,3Chairman&Chief Executive Officer Valenti Capital LLCDavid E.BarnesVice President&Ge
26、neral CounselTolga I.OalPresident DrivelineWilliam L.Kozyra 2,3,5Chairman&Chief Executive Officer,Alco Plastics,Inc.Herbert K.Parker 1,2Retired Executive Vice Presidentof Operational Excellence and Chief Financial Officer,Harman InternationalPeter D.Lyons 2,3CounselFreshfields Bruckhaus Deringer US
27、LLPBoard Commitee Assignments1 Audit Committee2 Nominating/Corporate Governance Committee3 Compensation Committee4 Executive Committee5 Technology CommitteeSandra E.Pierce 1,3Senior Executive Vice PresidentHuntington BankTerri M.KempSenior Vice President Human ResourcesMichael J.LynchChief Operating
28、 OfficerChristopher J.MayExecutive Vice President&Chief Financial OfficerNorman WillemsePresident Forging6UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended Decembe
29、r 31,2022 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from _ to _Commission file number 1-14303 AMERICAN AXLE&MANUFACTURING HOLDINGS,INC.(Exact name of registrant as specified in its charter)Delaware38-3161171(State or other jur
30、isdiction of(I.R.S.Employerincorporation or organization)Identification No.)One Dauch Drive,Detroit,Michigan48211-1198(Address of principal executive offices)(Zip Code)313-758-2000(Registrants telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:Title of Eac
31、h ClassTrading Symbol(s)Name of Each Exchange on Which RegisteredCommon Stock,Par Value$0.01 Per ShareAXLNew York Stock ExchangeSecurities registered pursuant to Section 12(g)of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securit
32、ies Act.Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)of the Exchange Act.Yes No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of
33、 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File
34、 required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit such files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated f
35、iler,a non-accelerated filer,a smaller reporting company,or an emerging growth company.See definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act).Large accelerated filer Accelerated filer Non-accelerated
36、filer Smaller reporting company Emerging growth company If an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange
37、Act Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financial reporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prep
38、ared or issued its audit report Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No The closing price of the Common Stock on June 30,2022 as reported on the New York Stock Exchange was$7.53 per share and the aggregate market value of
39、the registrants Common Stock held by non-affiliates was approximately$848.9 million.As of February 14,2023,the number of shares of the registrants Common Stock,$0.01 par value,outstanding was 114,579,669 shares.Documents Incorporated by ReferencePortions of the registrants Annual Report to Stockhold
40、ers for the year ended December 31,2022 and Proxy Statement for use in connection with its Annual Meeting of Stockholders to be held on May 4,2023,to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after December 31,2022,are incorporated by ref
41、erence in Part I(Items 1,1A,1B,2,3 and 4),Part II(Items 5,6,7,7A,8,9,9A,9B and 9C),Part III(Items 10,11,12,13 and 14)and Part IV(Item 15)of this Report.AMERICAN AXLE&MANUFACTURING HOLDINGS,INC.TABLE OF CONTENTS-ANNUAL REPORT ON FORM 10-K Year Ended December 31,2022 Page NumberPart IItem 1Business2 I
42、tem 1ARisk Factors12 Item 1BUnresolved Staff Comments20 Item 2Properties21 Item 3Legal Proceedings21Item 4Mine Safety Disclosures21 Part IIItem 5Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities22 Item 6Reserved22 Item 7Managements Discussion
43、and Analysis of Financial Condition and Results of Operations23 Item 7AQuantitative and Qualitative Disclosures About Market Risk45 Item 8Financial Statements and Supplementary Data46 Item 9Changes in and Disagreements with Accountants on Accounting and Financial Disclosure100 Item 9AControls and Pr
44、ocedures100 Item 9BOther Information101Item 9CDisclosure Regarding Foreign Jurisdictions that Prevent Inspections101 Part IIIItem 10Directors,Executive Officers and Corporate Governance102 Item 11Executive Compensation102 Item 12Security Ownership of Certain Beneficial Owners and Management and Rela
45、ted Stockholder Matters102 Item 13Certain Relationships and Related Transactions,and Director Independence102 Item 14Principal Accounting Fees and Services102 Part IVItem 15Exhibits and Financial Statement Schedules1031Part IItem 1.BusinessAs used in this report,except as otherwise indicated in info
46、rmation incorporated by reference,references to“our Company,”we,our,us or“AAM”mean American Axle&Manufacturing Holdings,Inc.(Holdings)and its subsidiaries and predecessors,collectively.General Development of BusinessHoldings,a Delaware corporation,is a successor to American Axle&Manufacturing of Mic
47、higan,Inc.,a Michigan corporation,pursuant to a migratory merger between these entities in 1999.In 2017,we acquired Metaldyne Performance Group,Inc.(MPG),with MPG becoming a wholly-owned subsidiary of Holdings.Narrative Description of BusinessCompany OverviewAs a leading global tier 1 automotive and
48、 mobility supplier,AAM designs,engineers and manufactures Driveline and Metal Forming technologies to support electric,hybrid and internal combustion vehicles.Headquartered in Detroit with over 80 facilities in 18 countries,AAM is bringing the future faster for a safer and more sustainable tomorrow.
49、Major CustomersWe are a primary supplier of driveline components to General Motors Company(GM)for its full-size rear-wheel drive(RWD)light trucks,sport utility vehicles(SUV),and crossover vehicles manufactured in North America,supplying a significant portion of GMs rear axle and four-wheel drive and
50、 all-wheel drive(4WD/AWD)axle requirements for these vehicle platforms.We also supply GM with various products from our Metal Forming segment.Sales to GM were approximately 40%of our consolidated net sales in 2022,37%in 2021,and 39%in 2020.We also supply driveline system products to Stellantis N.V.(
51、Stellantis)for programs including the heavy-duty Ram full-size pickup trucks and its derivatives and the AWD Chrysler Pacifica.In addition,we sell various products to Stellantis from our Metal Forming segment.Sales to Stellantis were approximately 18%of our consolidated net sales in 2022,and 19%in b
52、oth 2021 and 2020.We are also a supplier to Ford Motor Company(Ford)for driveline system products on certain vehicle programs including the Bronco Sport,Maverick,Edge,Escape and Lincoln Nautilus,and we also sell various products to Ford from our Metal Forming segment.Sales to Ford were approximately
53、 12%of our consolidated net sales in 2022,2021 and 2020.No other customer represented 10%or more of consolidated net sales during these periods.Business StrategyWe have aligned our business strategy to build value for our key stakeholders.We accomplish our strategic objectives by capitalizing on our
54、 competitive strengths and continuing to diversify our customer,product and geographic sales mix,while providing exceptional value to our customers.We are focused on securing and enhancing our core business of internal combustion engine(ICE)programs by delivering operational excellence and quality p
55、roducts to our customers,while growing our electrification business,as vehicle electrification is expected to be the foundation of the future of the automotive industry.2Competitive StrengthsWe achieve our strategic objectives by emphasizing a commitment to:Sustaining our operational excellence and
56、focus on cost management.In 2022,AAM received the 2021 GM Overdrive Award,which is awarded to suppliers who display outstanding achievement within GMs Global Purchasing and Supply Chain organizations key priorities,including sustainability,innovation,relationships,total enterprise cost,launch excell
57、ence and safety.This was the second consecutive year we received this award.We deliver operational excellence by leveraging our global standards,policies and best practices across all disciplines through the use of the AAM Operating System,which includes our S4(S-to-the-fourth)safety system,Q4(Q-to-
58、the-fourth)quality system and E4(E-to-the-fourth)energy and environmental sustainability system.We use this system to focus on customer satisfaction,lean production and efficient cost management,which allows us to improve quality,eliminate waste,and reduce lead time and total costs globally.Addition
59、ally,throughout 2022,we have continued our emphasis on cost management in order to mitigate the financial impact of the significant disruptions in the supply chain that the automotive industry experienced,and continues to experience,including a shortage of semiconductor chips used by our customers,i
60、ncreased metal and commodity costs,higher utility costs,increased transportation costs and labor shortages which have led to volatility in our production schedules,higher inventory levels and increased labor costs.We maintain a cost competitive,operationally flexible global manufacturing,engineering
61、 and sourcing footprint to compete in global growth markets,support global product development initiatives and maintain regional cost competitiveness.Our business is vertically integrated to reduce cost and mitigate risk.Our Metal Forming segment,in addition to supplying component parts to many exte
62、rnal customers,is a key supplier to our Driveline segment,helping to ensure continuity of supply for certain parts to our largest manufacturing facilities.During 2022,we launched 17 programs across our business units for our customers including GM,Stellantis,Ford,Mercedes-AMG and NIO Inc.In 2023,we
63、expect to launch approximately 17 new and replacement programs for a variety of customers across our business units,including GM,Mercedes-AMG,BMW and Chery,as well as e-Beam axles for a battery electric commercial vehicle produced by EKA Mobility,a subsidiary of Pinnacle Industries Limited.Maintaini
64、ng our high quality standards,which are the foundation of our product durability and reliability.AAM has a robust internal quality assurance system that drives continuous improvement to meet and exceed the growing expectations of our OEM customers.In 2022,four of our global facilities received the G
65、M Supplier Quality Excellence Award for outstanding quality performance during the 2021 performance year.AAM was also recognized in 2022 for quality in the 2021 performance year by several other customers including the Paccar 10 PPM Quality Award at our Glasgow,United Kingdom facility,the Daimler Ze
66、ro Defect Award at our Chennai,India facility and the Daimler Master of Quality Award at our El Carmen,Mexico facility.It was the second consecutive year that each facility earned their respective quality award.3Achieving technology leadership by delivering innovative products that enhance our produ
67、ct portfolio while increasing our total global served market.We are focused on securing our core business,as the cash flows generated from our existing programs and products contribute to our research and development(R&D)investments in electrification technology that are expected to bring the future
68、 of the automotive industry faster.Securing and Enhancing Our Core BusinessDuring 2022,AAM announced that we were named as new axle supplier for GMs next generation of the Chevrolet Colorado and GMC Canyon mid-size pickup trucks.Additionally,in the prior year,AAM was named the sole supplier of front
69、 and rear pickup axles for production at GMs Oshawa,Canada facility and also secured multiple next-generation full-size truck front and rear axle programs with multiple OEM customers.These awards are expected to generate revenues from mid-decade to beyond 2030.AAM has established a high-efficiency p
70、roduct portfolio that is designed to improve axle efficiency and fuel economy through innovative product design technologies.As our customers focus on reducing weight through the use of aluminum and other lightweighting alternatives,AAM is well positioned to offer innovative,industry leading solutio
71、ns.Our portfolio includes high-efficiency axles,aluminum axles and AWD applications.AAMs lightweight axle technology features an innovative design,which offers significant mass reduction and increased fuel economy and efficiency that is scalable across multiple applications without the loss of perfo
72、rmance or power.Our Metal Forming segment represents the largest automotive forging operation in the world,and provides engine,transmission,driveline and safety-critical components for light,commercial and industrial vehicles.We have developed advanced forging and machining process technologies to m
73、anufacture lightweight,highly precise and power-dense products.Our forged axle tubes deliver significant weight and cost reductions as compared to the traditional welded axle tubes.AAMs Advanced Technology Development Center(ATDC)at our Detroit campus,allows us to accelerate technological advancemen
74、ts.This state-of-the-art facility is our center for technology benchmarking,prototype development,advanced technology development,supplier collaboration,customer showcasing and associate training on our future products,processes,and systems.Our Rochester Hills Technical Center(RHTC)works closely wit
75、h the ATDC to test and validate new and advanced technologies focused on lightweighting,efficiency and vehicle performance using enhanced diagnostic and hardware assessment capabilities.Our European Headquarters and Engineering Center(EHEC)in Langen,Germany,serves as our center of excellence for res
76、earch and development,product testing and prototype development in Europe.Additionally,during 2022,we launched our Innovation Center at the Richard E.Dauch Institute in Mexico,which is focused on identifying ways to improve productivity while implementing manufacturing solutions,as well as educating
77、 our associates on process optimization and technology advances.Bringing the Future FasterAAMs investment in R&D has resulted in the development of advanced technology products designed to assist our customers in meeting the market demands for vehicle electrification;advanced and sophisticated elect
78、ronic controls;lower emissions;enhanced power density;improved ride and handling performance;and enhanced reliability and durability.AAMs electric drive technology is designed,engineered and manufactured to provide a diverse and scalable product portfolio of hybrid and electric driveline systems to
79、our customers that range from low-cost value-oriented offerings to high-performance solutions.This includes our e-Beam axles which incorporate high-reduction gearboxes and highly-integrated inverters.These hybrid and electric driveline systems leverage AAMs experience in power density,torque transfe
80、r,noise-vibration-harshness reduction,heat management and systems integration,and are designed to improve fuel efficiency,reduce CO2 emissions and provide AWD capability.Additionally,AAMs next generation of scalable and modular e-drive systems,have exceeded widely recognized industry benchmarks for
81、efficiency,mass and power density.Our e-drive technology is designed to be segment agnostic,enabling our products to have applications to a variety of markets and vehicle types.4In 2022,we enhanced our electrification product portfolio through our acquisition of Tekfor Group(Tekfor),which is a leadi
82、ng provider of driveline and powertrain components for both ICE and hybrid vehicles,as well as e-mobility applications.Also in 2022,AAMs electric drive innovations were recognized by Automotive News with three PACE awards,which are among the industrys most prestigious awards regarding innovation.AAM
83、s electric drive technology on the Mercedes-AMG GT 63 S E Performance was awarded a PACE award,as well as a PACE Innovation Partnership award for our high level of collaboration with Mercedes-AMG on the program.Additionally,AAMs highly integrated three-in-one wheel-end electric drive unit was awarde
84、d a PACEpilot Innovation to Watch award,which recognizes post-pilot,pre-commercial innovation in the automotive and future mobility industry.To date,our hybrid and electric driveline systems have been awarded multiple contracts,including a high-performance hybrid-electric system with Mercedes-AMG an
85、d electric vehicle components with NIO to support a next-generation e-powertrain program.We also expect to launch several additional programs for hybrid and electric vehicles,including e-Beam axles for EKA Mobilitys battery electric commercial vehicle and components for the full-hybrid Ford Maverick
86、 pickup truck.Diversification of Customer,Product and Geographic Sales MixAnother element of building value for our key stakeholders is the diversification of our business through the growth of new and existing customer relationships and expansion of our product portfolio.In addition to maintaining
87、and building upon our longstanding relationships with GM,Stellantis and Ford,we are focused on generating profitable growth with new and existing global customers.Recent new business awards and program launches include customers such as Mercedes-AMG,Chery Automobile Co.Ltd.,NIO Inc.and EKA Mobility.
88、Electrification is a growing portion of our new and incremental business backlog,as well as our quoted and emerging new business opportunities,and is a significant element of our future growth strategy.We continue to evaluate and consider strategic opportunities that will complement our core strengt
89、hs and supplement our diversification strategies while providing future,profitable growth prospects.Our acquisition of Tekfor in 2022 is an example of our tactical approach to strategic transactions.We are focused on increasing our presence in global markets to support our customers platforms.As our
90、 customers design their products for global markets,they will continue to require global support from their suppliers.For this reason,it is critical that we maintain a global presence in these markets in order to remain competitive for new contracts.To expand our global capabilities,in 2021 we launc
91、hed our EHEC,AAMs European center for excellence in research and development,product testing and prototype development.Establishing our EHEC is a critical step in furthering our relationships with European OEM customers.We are a partner in a joint venture(JV)with Liuzhou Wuling Automobile Industry C
92、o.,Ltd.(Liuzhou AAM),a subsidiary of Guangxi Automotive Group Co.,Ltd,which manufactures independent rear axles and driveheads to be used on crossovers,including SUVs,minivans and multi-purpose vehicles.An electric drive unit developed by our Liuzhou AAM JV has been featured on the all-electric Baoj
93、un E300 Plus vehicle from SAIC-GM-Wuling.We are also a partner in a JV with Hefei Automobile Axle Co.,Ltd.(HAAC),a subsidiary of the JAC Group(Anhui Jianghuai Automotive Group Co.,Ltd.),which includes 100%of HAACs light commercial axle business.HAAC supplies front and rear beam axles to several lead
94、ing Chinese light truck manufacturers,including JAC and Foton(Beiqi Foton Motor Co.,Ltd.).These joint ventures have served as a strong advantage in building relationships with leading Chinese manufacturers.5Competition We compete with a variety of independent suppliers and distributors,as well as wi
95、th the in-house operations of certain vertically integrated OEMs.Technology,design,quality,delivery and cost are the primary elements of competition in our industry segments.In addition to traditional competitors in the automotive sector,the trend toward electrification and advanced electronic integ
96、ration has increased the level of new market entrants.Further,some traditional automotive industry participants are developing strategic partnerships with technology companies as each party seeks to leverage the existing customer relationships and technical knowledge of the partner,and expedite the
97、development and commercialization of new technology.Industry Trends See Item 7,“Managements Discussion and Analysis-Industry Trends.”Productive MaterialsWe believe that we have adequate sources of supply of productive materials and components for our manufacturing needs,including steel,aluminum and
98、other metallic materials,and resources used for vehicle electrification and electronic integration.Most raw materials(such as steel)and semi-processed or finished items are available within the geographical regions of our operating facilities from qualified sources in quantities sufficient for our n
99、eeds.We currently have contracts with our steel suppliers that help to ensure continuity of supply to our principal operating facilities.We also have validation and testing capabilities that enable us to strategically qualify steel sources on a global basis.As we continue to expand our global manufa
100、cturing footprint,we may need to rely on suppliers in local markets that have not yet proven their ability to meet our requirements.During 2022,the automotive industry experienced,and continues to experience,significant disruptions in the supply chain,including a shortage of semiconductor chips used
101、 by our customers and increased metal and commodity costs.We continue to work with customers and suppliers in our effort to protect continuity of supply as we expect these challenges to continue in 2023.Patents and TrademarksWe maintain and have pending various United States(U.S.)and foreign patents
102、,trademarks and other rights to intellectual property relating to our business,which we believe are appropriate to protect our interest in existing products,new inventions,manufacturing processes and product developments.We do not believe that any single patent or trademark is material to our busine
103、ss,nor would expiration or invalidity of any patent or trademark have a material adverse effect on our business or our ability to compete.Cyclicality and SeasonalityOur operations are cyclical because they are directly related to worldwide automotive production,which is itself cyclical and dependent
104、 on general economic conditions and other factors.Typically,our business is moderately seasonal as our major OEM customers historically have an extended shutdown of operations(typically 1-2 weeks)in conjunction with their model year changeover and an approximate one-week shutdown in the month of Dec
105、ember.Our major OEM customers also occasionally have longer shutdowns of operations(up to 6 weeks)for program changeovers.Accordingly,our quarterly results may reflect these trends.Litigation and Environmental MattersWe are involved in,or potentially subject to,various legal proceedings or claims in
106、cidental to our business.These include,but are not limited to,matters arising out of product warranties,contractual matters,and environmental obligations.Although the outcome of these matters cannot be predicted with certainty,at this time we do not believe that any of these matters,individually or
107、in the aggregate,will have a material adverse effect on our financial condition,results of operations or cash flows.We file U.S.federal,state and local income tax returns,as well as foreign income tax returns in jurisdictions throughout the world.We are also subject to examinations of these tax retu
108、rns by the relevant tax authorities.Negative or unexpected outcomes of these examinations and audits,and any related litigation,could have a material adverse impact on our results of operations,financial condition and cash flows.6We are subject to various federal,state,local and foreign environmenta
109、l and occupational safety and health laws,regulations and ordinances,including those regulating air emissions,water discharge,waste management and environmental cleanup.We will continue to closely monitor our environmental conditions to ensure that we are in compliance with all laws,regulations and
110、ordinances.We have made,and anticipate continuing to make,capital and other expenditures(including recurring administrative costs)to comply with environmental requirements at our current and former facilities.Such expenditures were not significant in 2022,2021 and 2020.Environmental,Social and Gover
111、nanceEnvironmental SustainabilityWe are committed throughout our operations to the conservation and protection of our natural resources and the environment.The AAM Operating System includes our E4(E-to-the-fourth)system,which is AAMs energy and environmental sustainability program designed to drive
112、continuous improvement in our operations by reducing energy consumption,greenhouse gas(GHG)emissions and water usage,while minimizing waste and lessening the environmental impact of our production operations.Additionally,during 2022,we committed to reaching net-zero carbon emissions by 2040,and achi
113、eved the validation of our net-zero emissions targets by the climate-action organization Science Based Targets Initiative.We also established a goal to purchase 100%of energy for our operations in the U.S.from renewable sources by 2025.We are subject to risks of environmental issues,including impact
114、s of climate-related events,that could result in unforeseen disruptions or costs to our operations.We did not experience any climate-related events in 2022,2021 or 2020 that we believe could have a material adverse impact on our results of operations,financial condition and cash flows.Human Capital
115、ManagementOur ability to sustain and grow our business requires us to attract,retain and develop a highly skilled and diverse workforce.We employ approximately 19,000 associates on a global basis,of which 6,000 are employed in the U.S.and 13,000 are employed at our non-U.S.locations.Approximately 5,
116、000 are salaried associates and approximately 14,000 are hourly associates.Of the 14,000 hourly associates,approximately 69%are represented under collective bargaining agreements with various labor unions.Creating a Diverse,Equitable and Inclusive Culture At AAM,we believe diversity drives creativit
117、y.We believe an equitable and inclusive culture encourages,supports and celebrates the unique voices of our global workforce.AAM is committed to listening,learning and taking action that will move our company and our communities forward,together.Embracing diversity promotes innovation and helps AAM
118、to attract and retain the best talent everywhere we do business.AAMs commitment to Diversity,Equity and Inclusion(DEI)begins with our Board of Directors(Board).The Boards active oversight reflects the importance of our DEI journey to our business and demonstrates the power of accountability to this
119、critical initiative.With oversight from our Board and direction from senior leadership,our DEI Steering Committee(DEI Committee)helps to ensure that our initiatives are guided by the experiences and recommendations of our associates.Comprised of talented and diverse associates,the DEI Committee help
120、s develop new company initiatives designed to advance a respectful and inclusive company culture and to reinforce the importance of inclusion at AAM.AAM has established five pillars for our DEI program:enhancing DEI skills,maintaining a safe and inclusive environment,providing equitable talent manag
121、ement and inclusive benefits and policies,supporting stakeholder engagement and reinforcing leadership ownership and accountability.7In 2022,we continued our commitment to initiatives that foster a culture of inclusion and develop a more diverse workforce.Key initiatives included:We launched our DEI
122、 Global 2+1 Program,which was designed to enable global participation in our DEI journey.Our two global DEI topics this year were understanding and valuing differences and improving the representation of women in our global workforce.AAM facilities in each country also chose one additional topic(+1)
123、that will drive their DEI journey.We set 2030 demographic goals around these global 2+1 DEI topics.We dedicated additional resources by hiring a DEI executive who serves as the chairperson of the DEI Committee and directs global DEI initiatives.We facilitated additional Associate Resource Groups(ARG
124、s),which provide a forum for associates with shared experiences,characteristics or backgrounds to connect and enhance career and personal development.Our ARGs include:POWhER,Young Professionals,U.S.Veterans,Black Associate Network and Latin America Talent Inclusion Network.Attracting and Retaining A
125、ssociatesOur AAM360 program serves as the foundation for our recruitment and retention strategy.Its four components are designed to enhance our associates experience at AAM and includes associate health and safety,professional development,competitive compensation and benefits and the global communit
126、y.These programs offer resources,tools and events that are designed to empower associates in their work and personal lives.Empowerment of our associates is essential to continuously improving our quality performance,technology leadership and operational excellence and enabling our associates to grow
127、 professionally into the leaders that will guide AAM into the future.Our AAM360 program assists management in developing and implementing standards for recruitment and selection of a knowledgeable and diverse workforce,promoting learning and growth and driving effective performance while fostering a
128、n environment of open communication with AAM leadership in a variety of formats,including townhall-style meetings.AAM associates can also raise issues and concerns to the attention of management through the use of associate surveys and our 24/7 ethics hotline.Through our AAM360 program,AAM managemen
129、t monitors workforce demographics and attrition,associate performance data,succession and development plans and feedback from associates to ensure that our associates experience is meeting these objectives.During 2022,the automotive industry experienced,and continues to experience,significant disrup
130、tions in the supply chain,including labor shortages in a variety of positions and experience levels.We are taking measures to address these labor issues across our global operations to mitigate the impact to AAM,including actively managing production schedules and reviewing our compensation and bene
131、fit programs to ensure that they are competitive with local markets,and working with union organizations that represent certain associates.Developing AssociatesWe have established sustainable and adaptable talent management programs focused on the training and development of our associates.These pro
132、grams are designed to help associates realize their full potential by understanding the expectations of their current role and setting goals for future growth and learning,which contributes to the overall success of AAM.Health and Wellness Programs At AAM,the health of our associates is very importa
133、nt to us.We maintain a comprehensive,interactive and personalized wellness program to make it easy for our associates and their families to live a healthier lifestyle and help achieve personal wellness goals.8S4(S-to-the-Fourth)Safety SystemAt AAM,our first responsibility every day,in every facility
134、,is the safety of our global associates.AAMs S4 safety system is focused on developing,engaging,monitoring,and continuously educating our associates on standardized procedures that are the basis of our safety culture and safety policy.The primary goal of S4 is to achieve compliance with all internal
135、 and external requirements and regulations while driving behavioral changes to maintain a safe and environmentally friendly workplace.At AAM,we believe safety performance is a journey where each facility strives to achieve S4 by moving from a reactive safety environment to an interdependent safety e
136、nvironment.We are focused on continuous improvement of the S4 system and in our total recordable incident rate(TRIR)in every facility.We continuously monitor our facilities progress in the S4 Safety System.In 2022,our TRIR was 0.95 a reduction of approximately 55%in recordable injuries since the S4
137、program began in 2015.Partnering with our Global CommunitiesAAM believes that we have a responsibility to give back to the communities in which we live and work.AAM has long-standing relationships with charitable organizations to support local families,youth outreach,education,wellness,and social eq
138、uality.We support global organizations with both donations and volunteer hours,and AAM associates across the globe regularly participate in charitable and community events that allow our team to contribute to causes important to them.Executive Officers of AAMNameAgePositionDavid C.Dauch .58Chairman
139、of the Board&Chief Executive OfficerMichael K.Simonte .59PresidentDavid E.Barnes .64Vice President&General CounselTerri M.Kemp .57Senior Vice President-Human ResourcesMichael J.Lynch .58Chief Operating OfficerChristopher J.May .53Executive Vice President&Chief Financial OfficerTolga I.Oal .51Preside
140、nt-DrivelineNorman Willemse.66President-ForgingDavid C.Dauch,age 58,has been AAMs Chief Executive Officer since September 2012.Mr.Dauch has served on AAMs Board of Directors since April 2009 and was appointed Chairman of the Board in August 2013.From September 2012 through August 2015,Mr.Dauch serve
141、d as AAMs President&CEO.Prior to that,Mr.Dauch served as President&Chief Operating Officer(2008-2012)and held several other positions of increasing responsibility from the time he joined AAM in 1995.Presently,he serves on the boards of Business Leaders for Michigan,the Detroit Regional CEO Council,t
142、he Detroit Economic Club,the Detroit Regional Chamber,the Detroit Regional Partnership,the Detroit Mayors Workforce Development Board,the Great Lakes Council Boy Scouts of America,the Boys&Girls Club of Southeast Michigan,the National Association of Manufacturers(NAM),Amerisure Mutual Holdings,Inc.a
143、nd the Amerisure Companies(since December 2014).Mr.Dauch also serves on the Miami University Business Advisory Council,the Michigan ESG Leadership Council and the General Motors Supplier Council.Michael K.Simonte,age 59,has been President since August 2015.Mr.Simonte previously served as Executive V
144、ice President&Chief Financial Officer(since February 2009);Group Vice President-Finance&Chief Financial Officer(since December 2007);Vice President-Finance&Chief Financial Officer(since January 2006);Vice President&Treasurer(since May 2004);and Treasurer(since September 2002).Mr.Simonte joined AAM i
145、n December 1998 as Director,Corporate Finance.Prior to joining AAM,Mr.Simonte served as Senior Manager at the Detroit office of Ernst&Young LLP.Mr.Simonte is a certified public accountant.9David E.Barnes,age 64,has been General Counsel and Corporate Secretary since joining AAM in 2012,and became a V
146、ice President in 2017.In addition to his responsibilities as General Counsel and Corporate Secretary,he also serves as the Chief Compliance Officer of AAM.Prior to joining AAM,Mr.Barnes served as Executive Vice President,General Counsel and Secretary for Atlas Oil Company.He has held various positio
147、ns during his career at Ford Motor Company,Dykema Gossett and Venture Holdings LLC,after beginning his career at Honigman,Miller,Schwartz and Cohn.Mr.Barnes holds a juris doctor degree.Terri M.Kemp,age 57,has been Senior Vice President-Human Resources since January 2023.Prior to that,she served as V
148、ice President-Human Resources(since September 2012),Executive Director-Human Resources&Labor Relations(since November 2010),Executive Director-Human Resources(since September 2009),Director-Human Resources Operations(since October 2008),and served in various plant and program management roles since
149、joining AAM in July 1996.Prior to joining AAM,Mrs.Kemp served for nine years at Corning Incorporated,where she progressed through a series of manufacturing positions with increasing responsibility,including Industrial Engineer,Department Head and Operations Manager.Michael J.Lynch,age 58,has been AA
150、Ms Chief Operating Officer since December 2022.Prior to that,he served as President-Driveline(since November 2021),Vice President-Finance&Controller(since February 2017),Vice President-Driveline Business Performance&Cost Management(since May 2015);Vice President-Finance&Controller(since September 20
151、12);Executive Director&Controller(since October 2008);Director-Commercial Analysis(since July 2006);Director-Finance,Driveline Americas(since March 2006);Director-Investment&Commercial Analysis(since November 2005);Director-Finance,Driveline(since October 2005);Director-Finance Operations,U.S.(since
152、 April 2005);Manager-Finance(since June 2003);Manager-Finance,Forging Division(since September 2001);Finance Manager-Albion Automotive(since October 1998);Supervisor-Cost Estimating(since February 1998)and Financial Analyst at the Detroit Manufacturing Facility since joining AAM in September 1996.Pr
153、ior to joining AAM,Mr.Lynch served at Stellar Engineering for nine years in various capacities.Christopher J.May,age 53,has been Executive Vice President&Chief Financial Officer since January 2023.Prior to that,he served as Vice President&Chief Financial Officer(since August 2015),Treasurer(since De
154、cember 2011);Assistant Treasurer(since September 2008);Director of Internal Audit(since September 2005);Divisional Finance Manager-Metal Formed Products(since June 2003);Finance Manager-Three Rivers Manufacturing Facility(since August 2000);Manager,Financial Reporting(since November 1998)and Financi
155、al Analyst since joining AAM in 1994.Prior to joining AAM,Mr.May served as a Senior Accountant for Ernst&Young.Mr.May is a certified public accountant.Tolga I.Oal,age 51,has been President-Driveline,since December 2022 when he rejoined AAM after serving as Co-Chief Executive Officer of Howmet Aerosp
156、ace until October 2021.From 2015 to 2019,he served in various executive positions at AAM including Senior Vice President-Global Procurement and Supplier Quality Engineering(since January 2019),President-Driveline(since September 2018),and Senior Vice President-AAM and President-AAM North America(sin
157、ce September 2015).Prior to joining AAM in 2015,Mr.Oal served as Vice President of Global Electronics for TRW Automotive,since 2012.Before that,Mr.Oal served in various manufacturing and management positions of increasing responsibility within TRW for Global Electronics,including Director of Operati
158、ons and as Director of Finance.Prior to joining TRW,Mr.Oal held various leadership positions in engineering,sales,purchasing,and finance at Siemens VDO Automotive/Continental.Norman Willemse,age 66,has been President-Forging,since December 2022.Prior to that,he served as President-Metal Forming(sinc
159、e August 2015),Vice President-Metal Formed Product Business Unit(since December 2011);Vice President-Global Metal Formed Product Business Unit(since October 2008);Vice President-Global Metal Formed Product Operations(since December 2007);General Manager-Metal Formed Products Division(since July 2006
160、)and Managing Director-Albion Automotive(since joining AAM in August 2001).Prior to joining AAM,Mr.Willemse served at AS Transmissions&Steering(ASTAS)for seven years as Executive Director Engineering Group Manager Projects and Engineering and John Deere for over 17 years in various engineering posit
161、ions of increasing responsibility.Mr.Willemse is a professional certified mechanical engineer.10Internet Website Access to ReportsThe website for American Axle&Manufacturing Holdings,Inc.is .Our Annual Reports on Form 10-K,Quarterly Reports on Form 10-Q,Current Reports on Form 8-K and amendments to
162、those reports filed or furnished pursuant to section 13(a)or 15(d)of the Securities Exchange Act of 1934 are available free of charge through our website as soon as reasonably practicable after they are electronically filed with,or furnished to,the Securities and Exchange Commission(SEC).The SEC als
163、o maintains a website at www.sec.gov that contains reports,proxy and information statements,and other information regarding issuers that file electronically with the SEC.The information contained in the Companys website is not included,or incorporated by reference,in this Annual Report on Form 10-K.
164、11Item 1A.Risk FactorsThe following risk factors and other information included in this Annual Report on Form 10-K should be considered as our business,financial condition,operating results and cash flows could be materially adversely affected if any of the following risks occur.Risks Related to Our
165、 OperationsOur business has been,and could continue to be,adversely affected by disruptions in our supply chain and our customers supply chain.We depend on a limited number of suppliers for certain key components and materials needed for our products.We rely upon,and expect to continue to rely upon,
166、certain suppliers for critical components and materials that are not readily available in sufficient volume from other sources.As we continue to expand our global manufacturing footprint,we may need to rely on suppliers in local markets that have not yet proven their ability to meet our requirements
167、.These supply chain characteristics make us susceptible to supply shortages and price increases.If production volumes increase rapidly,there can be no assurance that the suppliers of critical components and materials will be able or willing to meet our future needs on a timely basis.A significant di
168、sruption in the supply of components or materials could have a material adverse effect on our results of operations and financial condition.Our supply chain,as well as our customers supply chain,is also at risk of unanticipated events such as pandemic or epidemic illness,including the ongoing impact
169、 of COVID-19 in certain regions in which we operate,natural disasters,industrial incidents,changes in governmental regulations and trade agreements,or financial or operational instability of suppliers that could cause a disruption in the supply of critical components to us and our customers.For exam
170、ple,the automotive industry has experienced,and continues to experience,significant disruptions in the supply chain,including a shortage of semiconductor chips used by our customers,increased metal and commodity costs,global logistical constraints,and increased transportation costs.As a result,we ha
171、ve experienced increased volatility in our sales and production schedules,including manufacturing downtime,often with little notice from customers,and increased inventory levels,which have negatively impacted our production efficiency and financial condition.In addition,we are also experiencing a si
172、gnificant shortage of hourly labor availability in certain regions in which we operate.This labor shortage has contributed to production volatility and inefficiencies in the manufacturing process,as well as increased labor costs.If we cannot secure sufficient hourly labor resources,we may be unable
173、to protect continuity of supply and meet customer demand,which could have a material adverse effect on our results of operations and financial condition.Our business could be adversely affected by volatility in the price or availability of raw materials,utilities,natural resources and transportation
174、.We may experience volatility,whether from inflation or otherwise,in the cost or availability of raw materials used in production,including steel,aluminum and other metallic materials,and resources used in electronic components,or in the cost or availability of utilities and natural resources used i
175、n our operations,such as electricity,water and natural gas.We may also experience volatility in the cost or availability of freight and logistics carriers as a result of supply chain constraints.If we are unable to pass such cost increases on to our customers,or are otherwise unable to mitigate thes
176、e cost increases,or if we are unable to obtain adequate supply of raw materials,utilities and natural resources,this could have a material adverse effect on our results of operations and financial condition.12Our business is significantly dependent on sales to GM,Stellantis and Ford.Sales to GM were
177、 approximately 40%of our consolidated net sales in 2022,37%in 2021,and 39%in 2020.A reduction in our sales to GM,or a reduction by GM of its production of light truck,SUV or crossover vehicle programs that we support,as a result of market share losses of GM or otherwise,could have a material adverse
178、 effect on our results of operations and financial condition.Sales to Stellantis accounted for approximately 18%of our consolidated net sales in 2022,and 19%in both 2021 and 2020,and sales to Ford accounted for approximately 12%of our consolidated net sales in 2022,2021 and 2020.A reduction in our s
179、ales to either Stellantis or Ford or a reduction by Stellantis or Ford of their production of the programs we support,as a result of market share losses or otherwise,could have a material adverse effect on our results of operations and financial condition.Our business may also be adversely affected
180、by reduced demand for the product programs we currently support,or anticipate supporting in the future,or if we do not obtain sales orders for successor programs that replace our current product programs,as a result of a shift in vehicle architecture from ICE to electrification,or otherwise.Our busi
181、ness is dependent on our Guanajuato Manufacturing Complex.A high concentration of our global business is supported by our Guanajuato Manufacturing Complex(GMC)in Mexico.GMC represents a significant portion of our net sales,profitability and cash flow from operations and we expect GMC to continue to
182、represent a substantial portion of these metrics for the foreseeable future.A significant disruption to our GMC operations,as a result of changes in trade agreements between Mexico and other jurisdictions,including the U.S.,tariffs,tax law changes,labor disputes or shortages,natural disasters,availa
183、bility of natural resources or utilities,pandemic or epidemic illness,or otherwise,could have a material adverse impact on our results of operations and financial condition.A failure of our information technology(IT)networks and systems,or the impact of a cyber attack,could adversely impact our busi
184、ness and operations.We rely upon information technology networks and systems to process,transmit and store electronic information,and to manage or support a variety of critical manufacturing and business processes or activities.Additionally,we and certain of our third-party vendors collect and store
185、 personal or confidential information,including personally identifiable information,in connection with human resources operations and other aspects of our business.The secure operation of these information technology networks and systems and the proper processing and maintenance of this information
186、are critical to our manufacturing and business operations.We cannot be certain that the security measures we have in place to protect these systems and data will be successful or sufficient to protect our IT systems from current and emerging technology threats and damage from computer viruses,unauth
187、orized access,cyber attack and other similar disruptions.The occurrence of any of these events could compromise our networks,and the information stored there could be accessed,publicly disclosed or lost.Any such access,disclosure or other loss of information could result in legal claims or proceedin
188、gs,liability or regulatory penalties under laws protecting the privacy of personal information,the disruption of our operations or damage to our reputation.In the future,we may be required to incur significant costs to protect against or repair damage caused by these disruptions or security breaches
189、,or as a result of implementing business continuity processes in response to disruptions or security breaches.13Our company,our suppliers or our customers and their suppliers may not be able to successfully and efficiently manage the timing and costs of new product program launches.Certain of our cu
190、stomers are preparing to launch new product programs for which we will supply newly developed products and related components.There can be no assurance that we will successfully complete the transition of our manufacturing facilities and resources to support these new product programs or other futur
191、e product programs on a timely and cost efficient basis.Accordingly,the launch of new product programs,or a shift in product mix from traditional ICE programs to hybrid and electric vehicle programs,may adversely affect production rates or other operational efficiency and profitability measures at o
192、ur facilities.We may also experience difficulties with the performance of our supply chain,or the supply chains of customers and their suppliers,on program launches,which could result in our inability to meet our contractual obligations to key customers.Production shortfalls or production delays,if
193、any,could result in our failure to effectively manage our manufacturing costs relating to these program launches.In addition,our customers may delay the launch or fail to successfully execute the launch of these new product programs,or any additional future product program for which we will supply p
194、roducts.Our revenues,operating results and financial condition could be adversely impacted if our customers fail to timely launch such programs or if we are unable to manage the timing requirements and costs of new product program launches.Our company may not realize all of the revenue expected from
195、 our new and incremental business backlog.The realization of incremental revenues from awarded business is inherently subject to a number of risks and uncertainties,including the accuracy of customer estimates relating to the number of vehicles to be produced in new and existing product programs and
196、 the timing of such production,as well as the fluctuation in exchange rates for programs sourced in currencies other than our reporting currency.Further,as the percentage of our backlog associated with electric vehicle programs increases,these risks could be exacerbated due to uncertainty related to
197、 electric vehicles,including end-user acceptance rates and the availability of critical electric vehicle infrastructure.It is also possible that our customers may delay or cancel a product program that has been awarded to us.Our revenues,operating results and financial condition could be adversely a
198、ffected relative to our current financial plans if we do not realize substantially all the revenue from our new and incremental business backlog.We may incur material losses and costs as a result of product recall or field action,product liability and warranty claims,litigation and other disputes an
199、d claims.We are exposed to warranty,product recall or field action and product liability claims in the event that our products fail to perform as expected,and we may be required to participate in a recall of such products.We are not responsible for certain warranty claims that may be incurred by our
200、 customers,which include returned components for which no defect was found upon inspection,discretionary acts of dealer goodwill,defects related to certain directed buy components,and build-to-print design issues.We review warranty claim activity in detail,and we may have disagreements with our cust
201、omers as to responsibility for these types of costs incurred by our customers.In addition,as we continue to diversify our customer base,we expect our obligation to share in the cost of providing warranties as part of our agreements with new customers will increase.Costs and expenses associated with
202、warranties,field actions,product recalls and product liability claims could have a material adverse impact on our results of operations and financial condition and may differ materially from the estimated liabilities that we have recorded in our consolidated financial statements.In addition to warra
203、nty claims relating directly to products we produce,potential product recalls for our customers and their other suppliers,and the potential reputational harm that may result from such product recalls,could have a material adverse impact on our results of operations and financial condition.We are als
204、o involved in various legal proceedings incidental to our business.Although we believe that none of these matters are likely to have a material adverse effect on our results of operations or financial condition,there can be no assurance as to the ultimate outcome of any such legal proceeding or any
205、future legal proceedings.14Our business could be adversely affected if we,our customers,or our suppliers fail to maintain satisfactory labor relations.A significant portion of our hourly associates worldwide,as well as the workforces of our customers and suppliers,are members of industrial trade uni
206、ons employed under the terms of collective bargaining agreements.There can be no assurance that future negotiations with labor unions,including those related to the collective bargaining agreements between our largest customers and the labor unions representing certain of their employees that expire
207、 in 2023,will be resolved favorably or that we,our customers or suppliers will not experience a work stoppage or disruption that could have a material adverse impact on our results of operations and financial condition.In addition,there can be no assurance that such future negotiations will not resu
208、lt in labor cost increases or other terms and conditions that could adversely affect our results of operations and financial condition or our ability to compete for future business.We use important intellectual property in our business.If we are unable to protect our intellectual property,or if a th
209、ird party makes assertions against us or our customers relating to intellectual property rights,our business could be adversely affected.We own important intellectual property,including patents,trademarks,copyrights and trade secrets.Our intellectual property plays an important role in maintaining o
210、ur competitive position in a number of the markets that we serve.Our competitors may develop technologies that are similar to our proprietary technologies or design around the patents we own or license.Further,as we expand our operations in jurisdictions where the protection of intellectual property
211、 rights is less robust,the risk of others duplicating our proprietary technologies increases,despite efforts we undertake to protect them.Developments or assertions by or against us relating to intellectual property rights,and any inability to protect these rights,could materially adversely affect o
212、ur business and our competitive position.Our companys ability to operate effectively could be impaired if we cannot attract and retain qualified personnel in key positions and functions.Our success depends,in part,on the efforts of our executive officers and other key associates,such as engineers an
213、d global operational leadership.In addition,our future success will depend on,among other factors,our ability to continue to attract and retain qualified personnel,particularly engineers and other associates with critical expertise and skills that support key customers and products,including those s
214、upporting the expansion of our product portfolio into electrification.The loss of the services of our executive officers or other key associates,unexpected turnover,or the inability to attract or retain associates,could have a material adverse effect on our results of operations and financial condit
215、ion.Our goodwill,other intangible assets,and long-lived assets are at risk of impairment if our business or market conditions indicate that the carrying value of those assets exceeds their fair value.Accounting principles generally accepted in the United States of America(GAAP)require that companies
216、 evaluate the carrying value of goodwill,other intangible assets,and long-lived assets routinely in order to assess whether any indication of asset impairment exists.Goodwill is required to be evaluated on an annual basis,while finite-lived intangible assets and long-lived assets should be evaluated
217、 only when events and circumstances exist that indicate an asset or group of assets may be impaired.We conduct our annual goodwill impairment test in the fourth quarter using a third-party valuation specialist to assist management in determining the fair value of our reporting units.Fair value of ea
218、ch reporting unit is estimated based on a combination of discounted cash flows and the use of pricing multiples derived from an analysis of comparable public companies multiplied against historical and/or anticipated financial metrics of each reporting unit.These calculations contain uncertainties a
219、s they require management to make assumptions including,but not limited to,market comparables,future cash flows of the reporting units,and appropriate discount and long-term growth rates.A decline in the actual cash flows of our reporting units in future periods,as compared to the projected cash flo
220、ws used in our valuations,could result in the carrying value of the reporting units exceeding their respective fair values.Further,a change in market comparables,discount rate or long-term growth rate,as a result of a change in economic conditions or otherwise,could result in the carrying values of
221、the reporting units exceeding their respective fair values.15Risks Related to Our IndustryWe are under continuing pressure from our customers to reduce our prices.Annual price reductions are a common practice in the automotive industry.Many of our contracts require us to reduce our prices in subsequ
222、ent years and most of our contracts allow us to adjust prices for engineering changes requested by our customers.If we accommodate a customers demand for higher annual price reductions and are unable to offset the impact of any such price reductions through continued technology improvements,cost red
223、uctions or other productivity initiatives,our results of operations and financial condition could be adversely affected.Our business faces substantial competition.The markets in which we compete are highly competitive.Our competitors include the in-house operations of many vertically integrated OEMs
224、,as well as many other domestic and foreign companies possessing the capability to produce some or all of the products we supply.In addition to traditional competitors in the automotive sector,the trend towards advanced electronic integration and electrification has increased the level of new market
225、 entrants,including technology companies.Some of our competitors are affiliated with OEMs and others could have economic advantages as compared to our business,such as scale of operations,patents,existing underutilized capacity and lower wage and benefit costs.Technology,design,quality,delivery and
226、cost are the primary elements of competition in our markets.As a result of these competitive pressures and other industry trends,OEMs and suppliers are developing strategies to reduce costs.These strategies include supply base consolidation,as well as in-sourcing,vertical integration and global sour
227、cing by OEMs.Further,some traditional automotive industry participants are developing strategic partnerships with technology companies as each party seeks to leverage the existing customer relationships and technical knowledge of the partner,and expedite the development and commercialization of new
228、technology.Our business may be adversely affected by increased competition from suppliers benefiting from OEM affiliate relationships or financial and other resources that we do not possess.Our business may also be adversely affected if we do not sustain our ability to meet customer requirements rel
229、ative to technology,design,quality,delivery and cost.If we are unable to respond timely to changes in technology and market innovation,we risk not being able to develop our intellectual property into commercially viable products.Our results of operations and financial condition are impacted,in part,
230、by our competitive advantage in developing,engineering,and manufacturing innovative products.Our ability to anticipate changes in technology,successfully develop,engineer,and bring to market new and innovative proprietary products,or successfully respond to evolving business models,including hybrid
231、and electric vehicle advances,may have a significant impact on our market competitiveness.If we are unable to maintain our competitive advantage through innovation,or if we do not sustain our ability to meet customer requirements relative to technology,there could be a material adverse effect on our
232、 results of operations and financial condition.Our business is dependent on certain global automotive market segments.A substantial portion of our revenue is derived from products supporting RWD light truck and SUV platforms and AWD crossover vehicle platforms in North America,Europe and Asia.Sales
233、and production levels of these vehicle platforms can be affected by many factors,including changes in consumer demand and preference;adverse economic conditions,such as recession or recessionary concerns;product mix shifts favoring other types of light vehicles,such as front-wheel drive based crosso
234、ver vehicles and passenger cars;fuel prices;vehicle electrification;and government regulations.Reduced demand in the market segments we currently supply could have a material adverse impact on our results of operations and financial condition,or our ability to invest in the necessary research and de
235、velopment activities to grow our electrification business.Our business could be adversely affected by the cyclical nature of the automotive industry.Our operations are cyclical because they are directly related to worldwide automotive production,which is itself cyclical and dependent on general econ
236、omic conditions and other factors,such as credit availability,interest rates,fuel prices,consumer preference and confidence,and the ability of end-users to secure affordable financing.Our business may be adversely affected by an economic decline or fiscal crisis,including prolonged recessionary peri
237、ods,that result in a reduction of automotive production and sales by our customers.16Risks Related to Liquidity,Indebtedness and the Capital MarketsWe have incurred substantial indebtedness and our financial condition and operations may be adversely affected by a violation of financial and other cov
238、enants.We have incurred substantial indebtedness and related debt service obligations,which could have important consequences,including:reduced flexibility in planning for,or reacting to,changes in our business,the competitive environment and the markets in which we operate,and to technological and
239、other changes;reduced access to capital and increasing borrowing costs generally or for any additional indebtedness to finance future operating and capital expenditures and for general corporate purposes;lowered credit ratings;reduced funds available for operations,capital expenditures and other act
240、ivities;and competitive disadvantages relative to other companies with lower debt levels.Our Senior Secured Credit Facilities,comprised of our Revolving Credit Facility,as well as our Term Loan A Facility and Term Loan B Facility,and our senior unsecured notes,contain customary affirmative and negat
241、ive covenants.Some,or with respect to certain covenants,all of these agreements include financial covenants based on leverage and cash interest expense coverage ratios and limitations on Holdings,AAM Inc.,and their restricted subsidiaries to make certain investments,declare or pay dividends or distr
242、ibutions on capital stock,redeem or repurchase capital stock and certain debt obligations,incur liens,incur indebtedness,or merge,make certain acquisitions or sales of assets.The Senior Secured Credit Facilities and the indentures governing our senior unsecured notes also include customary events of
243、 default.Obligations under the Senior Secured Credit Facilities and our senior unsecured notes are required to be guaranteed by most of our U.S.subsidiaries that hold domestic assets.In addition,the Senior Secured Credit Facilities are secured on a first priority basis by all or substantially all of
244、 the assets of AAM Inc.,the assets of Holdings and each guarantors assets,including a pledge of capital stock of our U.S.subsidiaries that hold domestic assets,including each guarantor,and a portion of the capital stock of the first tier foreign subsidiaries of AAM Inc.and MPG.A violation of any of
245、these covenants or agreements could result in a default under these contracts,which could permit the lenders or note holders,as applicable,to accelerate repayment of any borrowings or notes outstanding at that time and levy on the collateral granted in connection with the Senior Secured Credit Facil
246、ities.A default or acceleration under the Senior Secured Credit Facilities or the indentures governing the senior unsecured notes may result in defaults under our other debt agreements and may adversely affect our ability to operate our business,our subsidiaries and guarantors ability to operate the
247、ir respective businesses and our results of operations and financial condition.The available capacity under our Revolving Credit Facility could be limited by our covenant ratios under certain conditions.An increase in the applicable leverage ratio,as a result of decreased earnings or otherwise,could
248、 result in reduced access to capital under our Revolving Credit Facility,which is a significant component of our total available liquidity.Our business could be adversely affected by fluctuations in the global capital markets.Our business and financial results are affected by fluctuations in the glo
249、bal financial markets,including interest rates and currency exchange rates.Failure to respond timely to these fluctuations,or failure to effectively hedge these risks when possible,could lead to a material adverse impact on our results of operations and financial condition.Future business operations
250、 and opportunities,including the expansion of our business outside North America,may further increase the risk that cash flows resulting from these global operations may be adversely affected by changes in interest rates or currency exchange rates.17Our company faces substantial pension and other po
251、stretirement benefit obligations.We have significant pension and other postretirement benefit obligations to certain of our associates and retirees.Our ability to satisfy the funding requirements associated with these obligations will depend on our cash flow from operations and our ability to access
252、 credit and the capital markets.The funding requirements of these benefit plans,and the related expense reflected in our financial statements,are affected by several factors that are subject to an inherent degree of uncertainty and volatility,including governmental regulation.Key assumptions used to
253、 value these benefit obligations and the cost of providing such benefits,funding requirements and expense recognition include the discount rate,the expected long-term rate of return on pension assets,mortality rates and the health care cost trend rate.If the actual trends in these factors are less f
254、avorable than our assumptions,this could have an adverse effect on our results of operations and financial condition.Risks Related to Our International OperationsOur companys global operations are subject to risks and uncertainties,including tariffs and trade relations.As U.S.companies continue to e
255、xpand globally,increased complexity exists due to recent changes to corporate tax codes,potential revisions to international tax law treaties and renegotiated trade agreements,including the United States-Mexico-Canada trade agreement.These uncertainties,as well as the potential impacts of these agre
256、ements,could have a material adverse effect on our business and our results of operations and financial condition.As we continue to expand our business globally,our success will depend,in part,on our ability to anticipate and effectively manage these and other risks.We have business and technical of
257、fices and manufacturing facilities in multiple countries outside the U.S.International operations are subject to certain risks inherent in conducting business outside the U.S.,such as changes in currency exchange rates,tax laws,price and currency exchange controls,tariffs or import restrictions,nati
258、onalization,immigration policies,expropriation and other governmental action.Our global operations also may be adversely affected by political events,violations of anti-bribery or corruption laws,government sanctions,domestic or international terrorist events and hostilities,natural disasters and si
259、gnificant weather events,disruptions in the global financial markets,or public health crises,such as pandemic or epidemic illness.Our business could be adversely impacted by global climate change or an inability to meet the expectations of our stakeholders related to environmental,social and governa
260、nce(ESG)objectives.Natural disasters or extreme weather conditions that occur as a result of global climate change could lead us,our customers or suppliers to experience significant disruptions in operations or availability of key components,which could lead to a material adverse impact on our resul
261、ts of operations and financial condition.Further,various stakeholders,including customers,suppliers,providers of debt and equity capital,regulators and those in the workforce,are increasing their expectations of companies to do their part to combat global climate change and its impact,and to conduct
262、 their operations in an environmentally sustainable and socially responsible manner with appropriate oversight by senior leadership.We have made public commitments to reduce emissions,conserve resources at our various facilities and further develop a diverse,equitable and inclusive culture.A failure
263、 to respond to the expectations and initiatives of our stakeholders or achieve the commitments we have made,could result in damage to our reputation and relationships with various stakeholders,as well as adverse impacts to our financial condition due to volatility in the cost or availability of capi
264、tal,difficultly obtaining new business or entering into new supplier relationships,a possible loss of market share on our current product portfolio,or difficulty attracting and retaining a skilled workforce.18Exchange rate fluctuations could adversely affect our companys global results of operations
265、 and financial condition.As a result of our international operations,we are exposed to foreign currency risks that arise from our normal business operations,including risks associated with transactions that are denominated in currencies other than our local functional currencies.Gains and losses res
266、ulting from the remeasurement of assets and liabilities in a currency other than the functional currency of our foreign subsidiaries are reported in current period income.In the future,unfavorable changes in exchange rate relationships between the functional currencies of our subsidiaries and their
267、non-functional currency denominated assets and liabilities could have an adverse impact on our results of operations and financial condition.While we use,from time to time,foreign currency derivative contracts to help mitigate certain of these risks and reduce the effects of fluctuations in exchange
268、 rates,our efforts to manage these risks may not be successful.We are also subject to currency translation risk as we are required to translate the financial statements of our foreign subsidiaries to U.S.dollars.We report the effect of translation for our foreign subsidiaries with a functional curre
269、ncy other than the U.S.dollar as a separate component of stockholders equity.Unfavorable changes in the exchange rate relationship between the U.S.dollar and the functional currencies of our foreign subsidiaries could have an adverse impact on our results of operations and financial condition.Risks
270、Related to Regulations and TaxesNegative or unexpected tax consequences,as well as possible changes in foreign and domestic tax laws could adversely affect our results of operations and financial condition.There have been recent global proposals brought forward by the Organisation for Economic Co-op
271、eration and Development(OECD)alongside the Group of Twenty(G-20),for tax jurisdictions to evaluate the potential reform of longstanding corporate tax law principles and treaties that could adversely affect multi-national companies.As an example,in October 2021,the OECD announced the OECD/G20 Inclusi
272、ve Framework on Base Erosion and Profit Shifting(the Framework)which agreed to a two-pillar solution to address tax challenges arising from digitalization of the global economy.Under pillar two,the Framework provides for a global minimum corporate tax rate of 15%for companies with revenue above 750
273、million,calculated on a country-by-country basis.The Framework agreement must now be implemented by the OECD members who have agreed to the plan,effective in 2024.Some further guidance on the plan and the related rules has been published,with additional guidance expected to be published in 2023.We w
274、ill continue to monitor the implementation of the Framework by the countries in which we operate.Although the OECD does not enact tax law,proposals like this or others may lead to substantial changes in enacted tax laws and treaties in the various countries in which we do business and could have a m
275、aterial adverse impact on our results of operations and financial condition.In addition,there have been changes to tax laws in the U.S.,including the introduction of provisions such as the Global Intangible Low-Taxed Income(GILTI)and Foreign Derived Intangible Income(FDII)provisions,that have increa
276、sed the complexity of U.S.tax laws and have also increased volatility in our income tax expense and applicable tax rates.Further,GILTI and FDII may not be compliant with the OECD guidelines as drafted and it is uncertain whether the U.S.will amend these existing rules.Changes to these and other area
277、s of domestic or international tax reform,including future actions taken by governmental authorities,could increase uncertainty and may adversely affect our tax rate,results of operations and cash flows in future years.We file income tax returns in the U.S.federal jurisdiction,as well as various sta
278、tes and foreign jurisdictions.We are also subject to examinations of these income tax returns by the relevant tax authorities.Any negative or unexpected outcomes of these examinations and audits,or any resulting litigation,could have a material adverse impact on our results of operations and financi
279、al condition.19Our business is subject to costs associated with environmental,health and safety regulations.Our operations are subject to various federal,state,local and foreign laws and regulations governing,among other things,emissions to air,discharge to waters and the generation,handling,storage
280、,transportation,treatment and disposal of waste and other materials.We believe that our current and former operations and facilities have been,and are being,operated in compliance,in all material respects,with such laws and regulations,many of which provide for substantial fines and criminal sanctio
281、ns for violations.The operation of our manufacturing facilities entails risks in these areas,however,and there can be no assurance that we will not incur material costs or liabilities.In addition,potentially significant expenditures could be required in order to comply with evolving environmental,he
282、alth and safety laws,regulations or other pertinent requirements that may be adopted or imposed in the future by governmental authorities.Risks Related to Our StrategyOur restructuring initiatives may not achieve their intended outcomes.We have initiated restructuring actions in recent years to redu
283、ce cost and realign certain areas of our business and could initiate further restructuring actions in future periods.There can be no assurance that such restructuring initiatives will successfully achieve the intended outcomes,or that the charges related to such initiatives will not have a material
284、adverse effect on our results of operations and financial condition.As part of our strategic initiatives,we are actively assessing our product portfolio.As a result,we have divested certain operations and may pursue additional plans to divest certain operations in future periods.Our results of opera
285、tions or financial condition could be adversely affected if we initiate a divestiture and it is not completed in accordance with our expected timeline,or at all,or if we do not realize the expected benefits of the divestiture.We may be unable to consummate and successfully integrate acquisitions and
286、 joint ventures.Engaging in acquisitions and joint ventures involves potential risks,including financial risks,risks related to integrating enterprise resource planning systems,and failure to successfully integrate and fully realize the expected benefits of such acquisitions and joint ventures.Integ
287、rating acquired operations is a significant challenge and there is no assurance that we will be able to manage integrations successfully.As we continue to expand globally and accelerate our diversification efforts,we may pursue strategic growth initiatives,including through acquisitions and joint ve
288、ntures.An inability to successfully achieve the levels of organic and inorganic growth from our strategic initiatives could adversely impact our results of operations and financial condition.Item 1B.Unresolved Staff CommentsNone.20Item 2.PropertiesThe table below summarizes our global manufacturing
289、locations and administrative,engineering or technical locations:Manufacturing Corporate,Business Offices,Engineering and Technical CentersCountryDrivelineMetal FormingBrazil .14China .412Czech Republic .3England .1France .2Germany .161India .32Japan .1Luxembourg .1Mexico .8(a)5Poland .1Romania.1Scot
290、land.1South Korea .1Spain .11Sweden .1Thailand .1United States of America .3235Total .284413(a)The eight Driveline locations in Mexico include our Guanajuato Manufacturing Complex,which is comprised of six plants.We believe that our property and equipment is properly maintained and in good operating
291、 condition.We will continue to evaluate capacity requirements in light of current and projected market conditions.We also intend to continue redeploying assets in order to increase our capacity utilization and reduce future capital expenditures to support program launches.Item 3.Legal ProceedingsSee
292、 Note 11-Commitments and Contingencies in Item 8,Financial Statements and Supplementary Data for discussion of legal proceedings and the effect on AAM.Item 4.Mine Safety DisclosuresNot applicable.21Part IIItem 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of
293、 Equity SecuritiesMarket Information Our common stock,par value$0.01 per share,is listed for trading on the New York Stock Exchange(NYSE)under the symbol“AXL.”We had approximately 162 stockholders of record as of February 14,2023.DividendsWe did not declare or pay any cash dividends on our common st
294、ock in 2022.Our Amended and Restated Credit Agreement associated with our Senior Secured Credit Facilities limits our ability to declare or pay dividends or distributions on capital stock.Securities Authorized for Issuance under Equity Compensation PlansThe information regarding our securities autho
295、rized for issuance under equity compensation plans is incorporated by reference from our Proxy Statement.Item 6.Reserved22Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations(MD&A)COMPANY OVERVIEW As a leading global tier 1 automotive and mobility supplier,AAM
296、designs,engineers and manufactures Driveline and Metal Forming technologies to support electric,hybrid and internal combustion vehicles.Headquartered in Detroit with over 80 facilities in 18 countries,AAM is bringing the future faster for a safer and more sustainable tomorrow.We are a primary suppli
297、er of driveline components to General Motors Company(GM)for its full-size rear-wheel drive(RWD)light trucks,sport utility vehicles(SUV),and crossover vehicles manufactured in North America,supplying a significant portion of GMs rear axle and four-wheel drive and all-wheel drive(4WD/AWD)axle requirem
298、ents for these vehicle platforms.We also supply GM with various products from our Metal Forming segment.Sales to GM were approximately 40%of our consolidated net sales in 2022,37%in 2021,and 39%in 2020.We also supply driveline system products to Stellantis N.V.(Stellantis)for programs including the
299、heavy-duty Ram full-size pickup trucks and its derivatives and the AWD Chrysler Pacifica.In addition,we sell various products to Stellantis from our Metal Forming segment.Sales to Stellantis were approximately 18%of our consolidated net sales in 2022,and 19%in both 2021 and 2020.We are also a suppli
300、er to Ford Motor Company(Ford)for driveline system products on certain vehicle programs including the Bronco Sport,Maverick,Edge,Escape and Lincoln Nautilus,and we also sell various products to Ford from our Metal Forming segment.Sales to Ford were approximately 12%of our consolidated net sales in 2
301、022,2021 and 2020.No other customer represented 10%or more of consolidated net sales during these periods.Supply Chain Constraints Impacting the Automotive IndustryDuring 2022,the automotive industry has experienced,and continues to experience,significant disruptions in the supply chain,including a
302、shortage of semiconductor chips used by our customers,increased metal and commodity costs,higher utility costs,increased transportation costs,higher labor costs and labor shortages.As a result,we have experienced increased volatility in our production schedules,including manufacturing downtime,often
303、 with little notice from customers,higher inventory levels and increased labor costs,which have negatively impacted our results of operations and cash flows during this period.We continue to work with customers and suppliers in our effort to protect continuity of supply as we expect these challenges
304、 to continue in 2023.Due to the ongoing uncertainty associated with the impact of the COVID-19 pandemic,the conflict between Russia and Ukraine and other factors causing,or exacerbating,these supply chain constraints,the ultimate impact on our net sales,results of operations and cash flows is unknow
305、n.INDUSTRY TRENDS There are a number of significant trends affecting the markets in which we compete.Intense competition,volatility in the price of raw materials,including steel,aluminum,and other metallic materials,and resources used in vehicle electrification and electronic components,labor shorta
306、ges and increased labor costs,fluctuations in exchange rates and interest rates and significant pricing pressures remain.At the same time,there is a focus on investing in future products that will incorporate the latest technology and meet changing customer demands as certain original equipment manu
307、facturers(OEMs)place increased emphasis on the development of battery and hybrid electric vehicles.The ability to respond timely to the continued advancement of technology and product innovation,as well as the capability to source programs on a global basis,are critical to attracting and retaining b
308、usiness in our global markets.23INCREASED INVESTMENT IN VEHICLE ELECTRIFICATION AND DEMAND FOR EMISSIONS REDUCTIONS The electrification of vehicles continues to expand,driven by a shift in focus by certain OEMs toward battery and hybrid electric vehicles,government regulations related to emissions,s
309、uch as the Corporate Average Fuel Economy standards,and consumer demand for greater vehicle performance,enhanced functionality,increased electronic content and vehicle connectivity,reduced environmental impact and affordable convenience options.As vehicle electrification and electronic components be
310、come an increasingly larger focus for OEMs and suppliers,the industry has seen,and will likely continue to see,competition to develop and market new and alternative technologies,including from new market entrants such as non-traditional automotive companies and technology companies.Further,some trad
311、itional automotive industry participants are developing strategic partnerships with technology companies as each party seeks to leverage the existing customer relationships and technical knowledge of the partner,and expedite the development and commercialization of this new technology.An area of foc
312、us will be the product development cycle and bridging the gap between the shorter development cycles of information technology(IT)software and controls and the longer development cycles of traditional powertrain components.OEMs and suppliers are developing new products,such as hybrid and electric ve
313、hicles and the associated vehicle components,and are improving existing products to reduce emissions through lightweighting and efficiency initiatives,such as higher speed transmissions,and downsized engines.We are responding,in part,with ongoing research and development(R&D)activities to develop hy
314、brid and electric driveline systems and related subsystems and components.In 2022,AAMs electric drive innovations were recognized by Automotive News with three PACE awards,which are among the industrys most prestigious awards regarding innovation.AAMs electric drive technology on the Mercedes-AMG GT
315、 63 S E Performance was awarded a PACE award,as well as a PACE Innovation Partnership award for our high level of collaboration with Mercedes-AMG on the program.AAMs highly integrated three-in-one wheel-end electric drive unit was awarded a PACEpilot Innovation to Watch award,which recognizes post-p
316、ilot,pre-commercial innovation in the automotive and future mobility industry.Additionally,we have continued to enhance our product portfolio to allow us to meet our customers needs for high performance vehicles with reduced emissions and reduced environmental impact through our acquisition of Tekfo
317、r Group(Tekfor)during 2022.Tekfor is a leading provider of driveline and powertrain components for both internal combustion(ICE)and hybrid vehicles,as well as e-mobility applications.Through our e-drive systems,e-beam axle technology,lightweight axles,high-efficiency axles,all-wheel drive systems,hi
318、gh-strength connecting rod technology,refined vibration control systems and forged axle tubes,we have significantly advanced our efforts to improve ride and handling performance,while reducing emissions and mass.To date,our hybrid and electric driveline systems have been awarded multiple contracts a
319、nd received multiple awards,and our efforts have positioned us to compete in the evolving global marketplace.INCREASED FOCUS ON ENVIRONMENTAL,SOCIAL AND GOVERNANCE(ESG)INITIATIVES AND REPORTING There has been a growing focus on ESG initiatives and reporting,including those related to Diversity,Equit
320、y,and Inclusion(DEI),by industry stakeholders,including customers,suppliers,providers of debt and equity capital,regulators and those in the workforce.These topics are increasingly driving decisions made by our stakeholders.Particularly within the automotive industry,trends toward electrification an
321、d reduced emissions have increased focus on the environmental impact of OEMs and suppliers.The ability of OEMs and suppliers to continually communicate and meet expectations on ESG programs and initiatives will impact their competitive advantage to attract and retain business,as well as a skilled wo
322、rkforce.We have responded to this trend by implementing and launching programs and initiatives addressing each topic under ESG,such as E4(E-to-the-fourth),AAMs energy and environmental sustainability program to drive continuous improvement in our operations by reducing energy consumption,greenhouse
323、gas(GHG)emissions and water use while minimizing waste and lessening the environmental impact of our production operations.Also,as part of our continued focus on reducing GHG emissions,during 2022 we committed to reaching net-zero carbon emissions by 2040,and achieved the validation of our net-zero
324、emissions targets by the climate-action organization Science Based Targets Initiative(SBTi).The SBTi is a partnership between CDP(formerly known as the Climate Disclosure Project),the United Nations Global Compact,World Resources Institute(WRI)and the World Wide Fund for Nature(WWF)that drives ambit
325、ious climate action in the private sector by enabling companies to set greenhouse gas emissions reduction targets that are in line with what the latest climate science deems necessary to meet the goals of the Paris Agreement.24AAMs commitment to DEI begins with our Board of Directors(Board).The Boar
326、ds active oversight reflects the importance of our DEI journey to our business and demonstrates the power of accountability to this critical initiative.With oversight from our Board and direction from senior leadership,our DEI Steering Committee(DEI Committee)helps to ensure that our initiatives are
327、 guided by the experiences and recommendations of our associates.Comprised of talented and diverse associates,the DEI Committee helps develop new company initiatives designed to advance a respectful and inclusive company culture and to reinforce the importance of inclusion at AAM.Refer to Item 1.Bus
328、iness-Human Capital Management,for specific DEI highlights.An in-depth review of non-financial metrics and strategies related to our ESG initiatives and programs is included in our annual Sustainability Report,which includes more details on our sustainability programs,initiatives and future objectiv
329、es.This report and other ESG areas of focus,such as AAMs leadership,are made available to stakeholders through our company website.While evolving expectations and reporting standards are driving increased ESG reporting,this trend aligns with our cultural values and commitment to profitably grow our
330、business in a way that is sustainable and socially responsible.SHIFT IN CONSUMER PREFERENCE AND OEM PRODUCTION TO LIGHT TRUCK,CROSS-OVER VEHICLES(CUVs)AND SPORT-UTILITY VEHICLES(SUVs)There has been a trend toward increased demand for light trucks,CUVs and SUVs in certain markets,while demand for pas
331、senger cars has decreased.This increase in demand for light trucks,CUVs and SUVs has been driven by changes in consumer preference as technology advancements have made these vehicles lighter and more efficient.Certain OEMs are responding to this change in consumer preference by shifting their focus
332、to developing and manufacturing these types of vehicles,resulting in a significant reduction of passenger car vehicle programs,especially in North America.We have benefited from this trend as a significant portion of our business supports light truck,CUV and SUV programs in North America.GLOBAL AUTO
333、MOTIVE PRODUCTION AND INDUSTRY CONSOLIDATION Our customers continue to design their products to meet demand in global markets and therefore require global support from their suppliers.For this reason,it is critical that suppliers maintain a global presence in these markets in order to compete for new contracts.We have business and engineering offices around the world to support our global location
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