Meritor Acquisition and 2022 Financial Results
Table of Contents
legal or regulatory sanctions, disrupt our ability to conduct our business, result in the loss of intellectual property or damage our reputation with customers, dealers, suppliers
and other stakeholders. As the result of changing market conditions, a large percentage of our salaried employees continue to work remotely full or part-time. This remote
working environment may pose a heightened risk for security breaches or other disruptions of our information technology environment.
In addition, our products, including our engines, contain interconnected and increasingly complex technologies that control various processes and these technologies are
potentially subject to "cyber attacks" and disruption. The impact of a significant information technology event on either our information technology environment or our
products could have a material adverse effect on our competitive position, reputation, results of operations, financial condition and cash flows.
We are exposed to political, economic and other risks that arise from operating a multinational business. Greater political, economic and social uncertainty and the
evolving globalization of businesses could significantly change the dynamics of our competition, customer base and product offerings and impact our growth globally.
Our business is subject to the political, economic and other risks that are inherent in operating in numerous countries. These risks include:
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public health crises, including the spread of a contagious disease, such as future pandemics or epidemics, quarantines or shutdowns related to public health crises, and
other catastrophic events;
economic and political instability, including international conflicts, war, acts of terrorism or the threat thereof, political or labor unrest, civil unrest, riots or insurrections;
the difficulty of enforcing agreements and collecting receivables through foreign legal systems;
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trade protection measures and import or export licensing requirements;
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the imposition of taxes on foreign income and tax rates in certain foreign countries that exceed those in the U.S.;
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the imposition of tariffs, exchange controls or other restrictions;
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difficulty in staffing and managing widespread operations and the application of foreign labor regulations;
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required compliance with a variety of foreign laws and regulations; and
changes in general economic and political conditions, including changes in relationship with the U.S., in countries where we operate, particularly in China and emerging
markets.
As we continue to operate and grow our business globally, our success will depend, in part, on our ability to anticipate and effectively manage these and other related risks.
There can be no assurance that the consequences of these and other factors relating to our multinational operations will not have a material adverse effect upon us.
In addition, there continues to be significant uncertainty about the future relationships between the U.S. and China, including with respect to trade policies, treaties, government
regulations and tariffs. Any increased trade barriers or restrictions on global trade, especially trade with China could adversely impact our competitive position, results of
operations, financial condition and cash flows.
We face significant competition in the regions we serve.
The markets in which we operate are highly competitive. We compete worldwide with a number of other manufacturers and distributors that produce and sell similar products.
We primarily compete with diesel engines and related diesel products; however, new technologies continue to be developed for gasoline, natural gas, hydrogen, electrification
and other technologies, and we will continue to face new competition from these expanding technologies. Our products primarily compete on the basis of performance, price,
total cost of ownership, fuel economy, emissions compliance, speed of delivery, quality and customer support. We also face competitors in some emerging regions who have
established local practices and long standing relationships with participants in these markets. Additionally, we face increasing competition to develop innovative products that
result in lower emissions. There can be no assurance that our products will be able to compete successfully with the products of other companies and in other markets.
Increasing global competition among our customers may affect our existing customer relationships and restrict our ability to benefit from some of our customers' growth.
As our customers in emerging markets continue to grow in size and scope, they are increasingly seeking to export their products to other countries. This has meant greater
demand for our advanced engine technologies to help these customers meet the more stringent emissions requirements of developed markets, as well as greater demand for
access to our distribution systems for purposes of equipment servicing. As these emerging market customers enter into, and begin to compete in more developed markets, they
may increasingly begin to compete with our existing customers in these markets. Our further aid to emerging market customers could
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