Dauch (DCH) risk factors, FY2024 10-K

Risks Related to Our Operations

1. 01Our business has been, and could continue to be, adversely affected by disruptions in our supply chain and our customers' supply chain
2. 02Our business could be adversely affected by volatility in the price or availability of raw materials, utilities, natural resources and transportation
3. 03Our business is significantly dependent on sales to GM, Stellantis and Ford
4. 04Our business is dependent on our Guanajuato Manufacturing Complex
5. 05A failure of our information technology (IT) networks and systems, or the impact of a cyber attack, could adversely impact our business and operations
6. 06Our 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
7. 07Our company may not realize all of the revenue expected, or we may experience delays in realizing the expected revenue, from our new and incremental business backlog
8. 08We may incur material losses and costs as a result of product recall or field action, product liability and warranty claims, litigation and other disputes and claims
9. 09In addition to warranty 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
10. 10Our business could be adversely affected if we, our customers, or our suppliers fail to maintain satisfactory labor relations
11. 11We use important intellectual property in our business. If we are unable to protect our intellectual property, or if a third party makes assertions against us or our customers relating to intellectual property rights, our business could be adversely affected
12. 12Our company's ability to operate effectively could be impaired if we cannot attract and retain qualified personnel in key positions and functions
13. 13Our 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

Risks Related to Our Industry

1. 14We are under continuing pressure from our customers to reduce our prices
2. 15Our business faces substantial competition
3. 16If 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
4. 17Our business could be adversely affected by global industry uncertainty associated with transitioning from internal combustion engine vehicle products to electric vehicle products
5. 18Our business is dependent on certain global automotive market segments
6. 19Our business could be adversely affected by the cyclical nature of the automotive industry

Risks Related to Liquidity, Indebtedness and the Capital Markets

1. 20We have incurred substantial indebtedness and our financial condition and operations may be adversely affected by a violation of financial and other covenants
2. 21Our business could be adversely affected by fluctuations in the global capital markets
3. 22Our company faces substantial pension and other postretirement benefit obligations

Risks Related to Our International Operations

1. 23Our company's global operations are subject to risks and uncertainties, including tariffs and trade relations
2. 24Our business could be adversely impacted by global climate change or an inability to meet the expectations of our stakeholders related to environmental, social and governance (ESG) objectives
3. 25Exchange rate fluctuations could adversely affect our company's global results of operations and financial condition

Risks Related to Regulations and Taxes

1. 26Our business is subject to costs associated with environmental, health and safety regulations

Risks Related to Our Strategy

1. 27Our restructuring initiatives may not achieve their intended outcomes
2. 28We may be unable to consummate and successfully integrate acquisitions and joint ventures

Risks Related to the Pending Business Combination with Dowlais (Business Combination)

1. 29On January 29, 2025, the Company announced the pending Business Combination with Dowlais. In connection with the Business Combination, on January 29, 2025, the Company and Dowlais entered into a Co-operation Agreement
2. 30We may fail to realize the anticipated benefits and operating synergies expected from the Business Combination
3. 31Efforts to complete the Business Combination could disrupt our relationships with third parties and associates, divert management’s attention, or result in negative publicity or legal proceedings
4. 32The Business Combination will result in significant integration costs and we may not be able to integrate Dowlais into the combined company successfully
5. 33We will incur a substantial amount of debt to complete the acquisition of Dowlais
6. 34The complexity of the integration and transition associated with the Business Combination may result in us incurring significant costs to implement changes to our internal control over financial reporting for the combined company
7. 35The Business Combination may expose us to significant unanticipated liabilities
8. 36While the Co-operation Agreement is in effect, we are subject to restrictions on our business activities
9. 37Certain Dowlais agreements may contain change of control provisions which, if not waived, could have material adverse effects on the combined company
10. 38If certain conditions or approvals are not met or obtained, we may be required to pay a break fee under the terms of the Co-operation Agreement
11. 39Stockholders in the combined company will be exposed to additional currency exchange rate fluctuations as, following completion of the Business Combination, there will be an increased proportion of assets, liabilities and earnings denominated in foreign currencies
12. 40The Takeover Code restricts the Company’s ability to cause Dowlais to consummate the Business Combination and limits the relief the Company may obtain in the event Dowlais’s Board of Directors withdraws its support of the Business Combination
13. 41Even if a material adverse change to Dowlais’s business or prospects were to occur prior to closing, we may not be able to invoke the offer conditions and terminate the Business Combination, which could reduce the value of our shares
14. 42Issuance of Company shares in connection with the Business Combination will reduce our existing stockholders’ aggregate ownership and voting interest in the Company, will result in existing stockholders exercising less influence over management, and may adversely affect the market price of our shares