FY 2023 Second Quarter Earnings Call
Macro and industry specific trends driving the need for
restructuring
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ADIENT
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Several external and industry specific trends are reshaping the automotive sector. It's imperative current and future
business practices are aligned with these changes
Key trends/influences
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Light vehicle production
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Adient's response
Adjusting volume
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> Uncertain and slow growth in Europe - forecasts do not expect
production levels to return to pre-COVID levels in the short or longer
term as economic downturn and e-mobility regulations remain as
future challenges
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European production vs. new registrations
Traditionally, production levels were above new registrations due to
inventories and export (this trend reversed with COVID and chip
shortages - inventories sold down)
Forecasts show production levels will remain below demand as imports
to Europe are expected to increase
Chinese OEMs becoming the biggest exporters to Europe
Traditional OEM reaction to the market -- reducing footprint and moving
east to lower cost footprint
Industry trend towards digital validation (reduces the need for physical
testing facilities / workload)
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> Shift elimination / line speed changes
Footprint competitiveness
> Lower wage footprint
Organizational / structural design
> Reduce SG&A
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Customer driven decisions
Customer plant closures -- seek compensation
> Selective bidding on uncompetitive business
Although restructuring is often expensive (especially
in Europe), Adient is committed to being good
stewards of capital when developing and executing
necessary restructuring actions
(see slide 10 for a case study in efficient, cost-effective restructuring)
FY2023 Second Quarter Earnings Call
Adient - PUBLIC
May 3, 2023
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