What Garrett Motion Inc. told the SEC could break it.

Garrett's turbochargers and e-boosting products are metal-intensive: key raw materials include aluminum, stainless steel and a nickel-, iron- and chromium-based alloy. It estimates that a 10% variation in commodity prices could impact cost of sales by up to approximately $39 million per year before any price recovery from customers. It passes through some commodity-price changes under long-term customer agreements and negotiates ad hoc pricing elsewhere, but where pass-through is incomplete or lagged, metal-price spikes (including from metals tariffs) pressure margins.

“Assuming current levels of commodity purchases, a 10% variation in the commodity prices could impact our cost of sales by up to approximately $39 million per year prior to any price recovery from customers.”

Garrett's revenue is concentrated in a few large vehicle OEMs. In 2025, its three largest customers — disclosed only as Customer A, B and C — accounted for approximately 12%, 11% and 11% of total net sales respectively ($424M, $385M and $377M), roughly a third of the business, and its ten largest applications were spread across six OEMs. OEM sales were about 86% of revenue. Loss of, a program cancellation at, or a sharp build-rate decline by any of these large customers would have an outsized impact on revenue, particularly amid the powertrain transition away from internal combustion.

“Customer A $ 424 12 $ 330 9 $ 347 9 Customer B 385 11 401 12 474 12 Customer C 377 11 354 10 364 9”

Garrett manufactures more than 89% of its products in low-cost countries — including China, India, Mexico, Brazil, Romania and Slovakia — and sources over two-thirds of its materials from low-cost countries, making it directly exposed to import tariffs. The impact is realized: import tariffs added about $41 million to cost of goods sold in 2025, and net sales included roughly $40 million of recoveries on import tariffs (i.e., partial pass-through to customers). Because of its meaningful operations in China and Mexico, it warns the impact of further tariff actions may be significant, and the U.S.-Mexico-Canada Agreement is subject to a 2026 renegotiation whose outcome could adversely affect its cross-border auto-parts flows.

“due to our meaningful operations in China and Mexico, the impact may be significant. In addition to potential increases in customs duties and tariffs in the United States and other countries, the United States-Mexico-Canada Agreement is subject to renewal in 2026.”

Garrett's lean, low-cost supply model concentrates risk in certain suppliers. It warns that supply-chain disruptions, financial distress or business-condition changes are especially harmful when the affected suppliers and vendors are sole sources of required products or have unique capabilities, or when its OEM customers have directed it to use specific suppliers (directed-buy arrangements). It sources more than two-thirds of its materials from low-cost countries and runs 89% of manufacturing there, so a sole-source or directed-supplier failure — or a regional disruption — could constrain its ability to meet OEM delivery requirements.

“particularly when the affected suppliers and vendors are the sole sources of products that we require or that have unique capabilities, or when our customers have directed us to use those specific suppliers and vendors.”