MP-S-038
BorgWarnerSupplier Manual for
Non-Automotive
Rev. Date: August 1st, 2023

THIS DOCUMENT IS UNCONTROLLED IF PRINTED ON PAPER.

BorgWarner Supplier Manual for Non-Automotive

Table of Contents
BorgWarner Business Philosophy
Section #1 Vision, Mission, & Beliefs
Section #2 Quality Policy Principles
Section #3 Goals & Scope
Section #4 Supplier Code of Conduct
Section #5 Supplier Manual Access/Responsibilities

BorgWarner/Supplier Business Product/Processes
Section #6 Commercial Expectations
Section #7 Tooling & Gauging Policy
Section #8 Quality Requirements
Section #9 Supplier Change Management
Section #10 Materials/Delivery Expectations

Performance and Processes Issues
Section #11 Supplier Performance Metrics
Section #12 Process Audits (Post SOP)
Section #13 Enterprise Approved Sourcing List (EASL)
Section #14 Requirements for Electronics SuppliersRev. Date: August 1, 2023

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Section #15 Supplier Manual Revision History

BorgWarner Business Philosophy
Section #1 Vision, Mission, & Beliefs
1.1 Vision
A Clean, Energy-Efficient World.

MissionWe deliver innovative and sustainable mobility solutions for the vehicle market.

1.2 What We Value: The BorgWarner Beliefs
Inclusion (respecting individuals)• We believe in mutual respect.
• We create a safe environment where we are free to be ourselves.
• We value diversity in people, ideas and experiences.
Integrity (honoring truth)• We believe in transparency and authenticity.
• We do and say the right thing even if it is not the easy thing.
• We depend on each other to deliver what we promise.
Excellence (focusing on results)• We believe there is always a way to achieve superior results.
• We contribute to our development by seeking knowledge and sharing information.
• We set high goals and hold ourselves accountable to achieving them.
Responsibility (our commitment)• We believe safety is a top priority.
• We care about our local communities and the global environment.
• We make a meaningful impact through our talents and resources.
Collaboration (building trust)• We believe teamwork drives high performance.
• We work together without boundaries.
• We are one BorgWarner.
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Section # 2 Quality Policy Principles
Quality driven management and employee dedication are keys to success and Customer
satisfaction. BorgWarner is committed to building products that are sound and dependable. We
will improve our business continuously in quality, cost, and reliability. We will consistently
provide products and services which meet or exceed Customer expectations, and satisfy
Customers by anticipating their requirements.
BorgWarner seeks to achieve and maintain a reputation of excellence throughout thecommunities it serves. To achieve this, dedication to quality in everything the Company does
will be a top priority of all of our employees and Suppliers, in particular under the premise toprotect human rights and prevent or minimize environment related risks at all times in our
supply chain. We believe that success will come only through continuous renewal. Quality isat the very core of our Product Leadership culture. All BorgWarner employees are therefore,
committed to CQC.

Customer Satisfaction
Quality ProductContinuous Improvement

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Section # 3 Goals & Scope“We need Suppliers who are capable of providing best-in-class quality and services.”
Before presenting the following guidelines, we want to provide the general principles that drive
this program to make sure that each Supplier’s decision to participate is made with a complete
knowledge of our objectives, of the procedure used, and what is expected of all Suppliercompanies.

Goal
The purpose of this manual is to provide BorgWarner Suppliers and BorgWarner Employees
guidance as to our Commercial, Quality, Delivery, Technology and Business expectations.
The demand for improved product quality is widely recognized as the primary challenge facing
our industry. BorgWarner has historically been committed to producing the highest quality
product possible. Our policy is to meet and strive to exceed Customer requirements with thestandard of measurement being zero defects. This manual details the procedures and systemsof this quality approach, the basis of which is defect prevention and continuous improvement.
BorgWarner is committed to this approach, and we expect the same commitment from our
Suppliers. It is important that BorgWarner’s supply base develops our same enthusiasm forexcellence and displays the willingness to work toward the common goals outlined in thismanual. With this in mind, BorgWarner has created this common Supplier Manual applicablefor all BorgWarner locations supporting the following points:•

Communicate to the Supplier BorgWarner’s expectations, goals and minimum requirements
to assure quality of supplied parts.

•

Encourage open and free communication of ideas, information and notification of problems
among Suppliers, BorgWarner and its Customers in the spirit of teamwork and cooperation.

•

Develop an overall plan to ensure smooth production start-up and ramp-up both at
BorgWarner and the Supplier, based on effective planning and communication.

•

Define the quality assurance procedures and documents Suppliers must follow to assure
application of an effective quality system certified to ISO 9001.

Scope
This Supplier Manual applies to all production material Suppliers and service part Suppliers that
supply product to the production facilities of BorgWarner for non automotive applications. These
procedures may be applied to other parts, materials, and services (such as consumable tools
and supplies, indirect material, capital equipment, and non-production services). The
applicability of these procedures to tools and supplies will be indicated on purchase orders.

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BorgWarner Supplier Manual for Non-Automotive“Off the shelf/catalog components” refers to parts sold generically in the marketplace with amanufacturer specific part number and have not been custom designed for use by BorgWarner.
“Customer/Blueprint components” refers to parts that have been designed by or for BorgWarnerfor use in our end products and typically will have a BorgWarner Assigned part number andassociated print.
Responsibilities• All production material Suppliers and service part Suppliers must maintain a comprehensive
Quality System to ensure compliance with the requirements of the contract and thisdocument. This manual explains BorgWarner’s minimum expectations as well as the process
BorgWarner follows to assess the capability and performance of each Supplier. BorgWarner
seeks Suppliers who have a minimum of ISO 9001 for non automotive applications.
BorgWarner expects Suppliers also cascade this requirement to their subcontractors.
•

The organization shall pass down all applicable statutory and regulatory requirements as well
as special product and process characteristics to their Suppliers and require the Suppliers tocascade all applicable requirements down to the supply chain to the point of manufacture.

•

BorgWarner also seeks Suppliers who have ISO 14001 or comparable registered
Environmental Management Systems.

•

All production material Suppliers and service part Suppliers must inform BorgWarner ifanother customer places that Supplier on a special status regarding quality and/or delivery.
Such a status could be controlled shipping, customer shutdown due to a supply issue, or afield action.

Section #4 Supplier Code of Conduct
The BorgWarner Beliefs serve as a guide for our employees on the way we conduct ourbusiness—with our customers, our employees, our Suppliers, and our communities. These
beliefs, which are deeply rooted in our culture, also serve as a framework for the standardsof business conduct, we expect of any Supplier that does business with us. Further, thesecommitments are in accordance with the Supply Chain Due Diligence laws. Compliancewith these standards will be a mandatory component of our purchase contracts worldwide
and must also apply to subcontractors, in particular under the premise to protect humanrights and prevent or minimize environment related risks at all times in our supply chain. It isalso expected that our Suppliers cascade similar expectations described in this Supplier
Code of Conduct to their own Suppliers. The Supplier’s shipping location is encouraged tocomplete the AIAG Supply-Chain Sustainability eLearning. This training is free of charge
and can be accessed at the following link:
https://www.aiag.org/store/training/details?CourseCode=ELSCS

4.1 Inclusion. Respecting individuals
BorgWarner operates in a climate of respect, courtesy and impartiality. The same
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compete for BorgWarner business. We expect open, honest and timely
communication. BorgWarner Suppliers should encourage a positive and diverse
workplace by not tolerating harassment or discrimination, including that involving
national and ethnic origin, race, color, social origin, health status, sexual orientation,
religion, gender, age, political opinion, or disability.

Basic Working Conditions Guiding Principles
BorgWarner expects its Suppliers and Sub Suppliers to develop policies andpractices for all of its facilities worldwide, to provide working conditions that areappropriate under applicable law and that support and uphold the BorgWarner
Beliefs. We also expect suppliers to adhere to the International Labour Organizations’(ILO) Declaration on Fundamental Principles and Rights at Work and the UN Guiding
Principles on Business and Human Rights.
•

•

•

•

•

•

Use of Child Labor is prohibited
Prohibits Suppliers from employing any person below the age of 15 except as part ofa government sponsored training or apprenticeship program.
Forced Labor and corporal punishment is prohibited
Prohibits Suppliers from using forced labor in any form and further prohibits
physically abusive practices, including corporal punishment or the threat of corporalpunishment.
Freedom of association
Expects that suppliers respect the rights of workers to establish and join an
organization of their own selection and their rights to collective bargaining, in
accordance with local laws. Workers must not be penalized or subjected toharassment or intimidation for exercising any legally protected right to join or notjoin such legal organizations. Encourages open communication between
management and employees regarding working conditions without fear of
retaliation, intimidation, or harassment.
Compensation
Expects that Suppliers’ employees will receive compensation and benefits that arecompetitive and consistent with applicable laws regarding minimum wages,
overtime hours and legally mandated benefits. The compensation paid to suppliers’
employees should constitute at least a minimum of a fair and living wage.
Ethical Recruitment
It is our expectation that our suppliers hire workers lawfully, in a fair and transparent
manner that respects human rights. Suppliers should not mislead or defraud potential
workers about the nature of the work, ask workers to pay recruitment fees, orconfiscate, destroy, conceal, or deny access to worker passports and othergovernment-issued identity documents. Workers should receive a written offer in alanguage well understood by the worker, stating in a truthful, clear manner their rights
and responsibilities.
Working Hours
Expects Suppliers to comply with applicable laws regulating hours of work.

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•

•

•

•

Equal Employment
Expects Suppliers to have written policies promoting equal employment
opportunities and formal, independent practices for responding to any complaints.
Health and Safety
Expects Suppliers to promote safe and healthy work environments for all employees
in all types of workspaces and expects commitment to continually improving thesame. Suppliers should also provide proper Personal Protective Equipment (PPE)
when applicable and have an emergency preparedness and response plan. Hazard
and risk analysis systems should be implemented to minimize the potential forincidents or accidents. If Suppliers provide their workers with residential facilities,
they must provide clean and safe accommodations. Suppliers should also properly
manage the health and safety of contractors as part of a company’s extended supply
chain.
Use of Private or Public Security Forces
Suppliers must not commission or use private or public security forces to protect thebusiness if, due to a lack of training or control on the part of the company, thedeployment of the security forces may lead to violations of human rights.
Women’s Rights
Gender inequality underpins problems such as unequal opportunity in employment
and unequal pay for equal work. BorgWarner expects its suppliers to provide equal
opportunity in employment and commit to equal pay for equal work.

4.2 Integrity. Honoring truth
We at BorgWarner demand uncompromising ethical standards in all we do and say—we expect our Suppliers to do the same. Our policies prohibit the acceptance of gifts,
services, or anything of such value that the good judgment of the recipient might beinfluenced, or that a third party might reasonably perceive as influencing that
judgment. Payments of money, property, or services for the purpose of obtaining
business or special consideration are prohibited. If a BorgWarner employee solicits a
gift or entertainment opportunity from a Supplier for their personal use, the request is
to be declined. We discourage our employees from purchasing goods or services
from BorgWarner Suppliers for their personal use, even though paid for by theemployee.
• BorgWarner recognizes that in some cultures, business gifts and businessentertainment are considered an important part of the development of business
relationships. Any gift or entertainment must be evaluated to ensure it is in thebest interest of BorgWarner, consistent with BorgWarner policies and the law,and in accordance with local custom.
• No listing of ethical guidelines can be considered complete. It is incumbent upon
those affected by this policy to avoid the misconception that if it is legal, it is
ethical. Appropriate conduct must reflect good judgment, fairness and highstandards.

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Anti-Bribery (US Foreign Corrupt Practices Act and UK Anti-Bribery Act of 2010)
BorgWarner expects all Suppliers (direct material, indirect material, and services) tocomply with all laws and regulations applicable to its business, at all governmental
levels worldwide.
The use of corporate funds, property or other resources for any unlawful or improper
purpose is prohibited. Anti-corruption laws require that companies meet prescribedaccounting and internal control standards and impose severe penalties on bothcompanies and individuals for certain types of payments and practices. BorgWarner
Employees and our Suppliers may not give, promise or authorize any payments, either
directly or indirectly to government officials in any country.
Anti-Bribery Due Diligence
All Suppliers (direct material, indirect material, and service provider companies orindividuals) who will have contact with government officials on BorgWarner’s behalf
are required to complete an Anti-Bribery Due Diligence Questionnaire (preferablyprior to award of business). The questionnaire is available in the Supplier section of
the BorgWarner, Inc web page(http://www.borgwarner.com/en/Suppliers/default.aspx) or in the GSM Suppliers Site
document section in ExtraIce.
Conflicts of Interest
Conflict of interest occurs when an individual or a corporation (either private or
governmental) is in a position to exploit his/her or their own professional or official
capacity in some way for personal or corporate benefit. BorgWarner expects
suppliers to ensure that their employees avoid and disclose situations where there isany perceived or actual conflict of interests and that decisions be based on solid
business judgment unclouded by favoritism resulting from personal relations andopinions.
Anticorruption and Anti-money laundering
BorgWarner does not tolerate bribery, corruption or money laundering under any
circumstances. Bribery involves offering, giving, receiving, or requesting something ofvalue to improperly influence a business decision and can take many forms, including
money, gift cards, travel, employment (including internships), entertainment, andcharitable contributions. Giving bribes to anyone, including government employees orofficials, directly or through a third party, is prohibited. BorgWarner also prohibits
facilitation payments, which are small payments intended to expedite a nondiscretionary, routine government process or service (such as obtaining a visa or
clearing goods through customs). BorgWarner, its employees, and suppliers are
subject to local anti-bribery, anti-corruption and anti-money laundering laws. If you
suspect a bribe or other improper payment has been made, contact the BorgWarnerCompliance Office immediately.
Fair Competition and Anti-Trust
BorgWarner expects its suppliers to uphold fair competition and anti-trust standards
including, but not limited to, avoiding business practices that unlawfully restrain
competition; improper exchange of competitive information; and price fixing, bid
rigging, or improper market allocation. An effective compliance policy and strategy
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enables a company to minimize the risk of involvement in competition law
infringements, and the costs resulting from anti-competitive behavior.
Financial responsibility (Accurate Records) & Disclosure of Information
BorgWarner expects that suppliers perform their business dealings in a transparent
manner and accurately reflect them in the companies’ financial reports and filings.
Financial responsibility refers to a company's responsibility to accurately record,
maintain, and report business documentation including, but not limited to, financial
accounts, quality reports, time records, expense reports, and submissions tocustomers or regulatory authorities, when appropriate. Books and records are
expected to be maintained in accordance with applicable law and generally accepted
accounting principles. BorgWarner expects its suppliers to disclose financial and nonfinancial information in accordance with applicable regulations and prevailing industry
practices.

4.3 Excellence. Focusing on results
BorgWarner seeks to be a leader—in serving our Customers, advancing ourtechnologies, and rewarding all who invest in us. To extend our competitive
position, we expect our Suppliers to relentlessly improve their own performance andto bring urgency to every business challenge and opportunity.
Data Protection and Data Security
BorgWarner expects its suppliers to implement robust data privacy and security
standards that protect an individual’s personal data, regardless of whether they are
employees, customers, suppliers, or job applicants. Suppliers should respect theprivacy and civil liberties in respect of the collection, retention, use or dissemination,
as well as any other processing of personal data.
Intellectual Property“Intellectual Property” includes inventions, patents, trade secrets, “know-how”,
trademarks, logos, and copyrights. Suppliers should use commercially reasonable
practices to avoid the unjustified transfer of confidential technology and know-how(e.g., copyright, trademark, design, patent) and must be diligent to identify, protect,and defend our Intellectual Property as well as the Intellectual Property of our (OEM)customers and sub-suppliers.
Counterfeit Parts
BorgWarner expects its suppliers to develop, implement, and maintain methods andprocesses appropriate to their products and services to minimize the risk of
introducing counterfeit and materials into deliverable products and adhere to relevant
technical regulations in the product design process.

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Export controls and economic sanctions
Suppliers must comply with all applicable laws and regulations governing the conductof international trade, including sanctions, export controls, boycotts, and customs.
Suppliers should have appropriate policies and procedures to ensure compliance withapplicable export controls and economic sanctions laws and regulations of all relevant
countries. If the supplier is involved in the sale, marketing, distribution, ortransportation of products or services, or the transfer of technology acrossinternational borders, the supplier must verify that the transactions do not involve
restricted individuals, companies, countries, or regions, and that the products do not
require an export license or other authorization.

4.4 Responsibility. Our commitment
We are committed to good corporate citizenship. We expect our Suppliers to abide by
all applicable employment, environmental, health and safety laws and regulations.
We will not allow the use of any forced, involuntary or child labor by Suppliers who
provide goods or services to us. We commit ourselves to prevent and minimize any
risk to human rights or environment in our business areas and in our supply chain.
Rights of Minorities and Indigenous Peoples
BorgWarner expects that its suppliers respect the rights of local communities todecent living conditions; education, employment, social activities; and the right toFree, Prior, and Informed Consent (FPIC) to developments that affect them and thelands on which they live, with particular consideration for the presence of vulnerable
groups.
Land, Forest and Water Rights and Forced Eviction
We expect that suppliers avoid forced eviction and the deprivation of land, forests andwaters in the acquisition, development or other use of land, forests and water.
Environmentally Responsible Products and Processes
BorgWarner expects its suppliers to responsibly protect the environment for the
benefit of society and future generations. Suppliers should strive to conserve, recycle,
and reuse resources efficiently, using responsible and sustainable environmental
practices, including but not limited to energy and emissions reduction initiatives,
monitoring and reporting. Suppliers should minimize water consumption, effectively
reuse and recycle water with responsible treatment of wastewater discharges andprevent potential impacts from flooding as a consequence of rainwater run-off, as
required by and in accordance with applicable law.
To assure that our products and processes will provide the maximum benefit and least
damage to the environment, we expect BorgWarner Suppliers to:• Develop and offer products that help contribute to improved fuel efficiency andreduced emissions• Evaluate and minimize the complete-life cycle environmental impact of yourproducts and processes• Minimize waste generation• Lead in the conversion to environmentally friendly materials including the use ofrecycled and recyclable materials
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Maximize the efficient use of resources such as water
Obtain energy from renewable sources and/or lower impact resources whereverpractical to reduce greenhouse gasses• Protect ecosystems, especially key biodiversity areas, impacted by theiroperations, and avoid deforestation in accordance with international biodiversity
regulations.
• Monitor and control the impact of their operations on soil erosion, nutrientdegradation, subsidence and contamination to preserve soil quality.
• Minimize noise emissions from industrial processes to reduce disturbance of thesurrounding community and environment.
• Not disturb animal welfare, respecting the five animal freedoms formalized by theWorld Organization for Animal Health (OIE).
• Strive for environmental leadership in regions in which you operate and fulfill theenvironment-related obligations set out in the Supply Chain Due Diligence laws
Air Quality
Suppliers should routinely monitor and disclose, appropriately control, minimize, andto the extent possible, eliminate emissions contributing to air pollution, as required byand in accordance with applicable law. Suppliers should assess cumulative impactsof pollution sources at their facilities and mitigate their pollution levels accordingly.
Responsible Chemical Management
Suppliers should identify, minimize, or eliminate the use of restricted substances inmanufacturing processes and finished products to ensure regulatory compliance.
Suppliers should also be aware of any use of restricted substances in processes andfinished products, and actively investigate suitable substitutes to maintain product andenvironmental stewardship.

4.5 Collaboration. Building trust
Successful business relationships are the result of mutual goals and values. We
encourage differentiating technologies that challenge the status quo and help support
BorgWarner’s product leadership model. We view every Supplier relationship as anopportunity to extend our enterprise and grow our business. Information given to us
must be accurate, and when requested, will be treated as confidential information sodesignated.

4.6 Adherence
We expect your cooperation in ensuring adherence to our Supplier Code of Conduct.
We expect Suppliers throughout our entire supply chain to adopt and enforce policies inaccordance to those stated above. BorgWarner seeks to identify and do business withorganizations that conduct their businesses to these standards.
BorgWarner personnel are expected to report any known or reported violations of this code
to their respective Vice President without fear of retaliation.
If you or anyone in your company believes that a BorgWarner employee or other
Supplier has violated this policy, please contact the BorgWarner Compliance Officeby phone at +1 248.754.0656, or e-mail to Complianceoffice@BorgWarner.com. You
may also report to an independent party by calling 1-800-461-9330 in the United States
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country’s toll free number, or call collect to +1-720-514-4400 using the appropriate
country code specific to your location and where you are dialing, or atcompliancehotline.borgwarner.com.

4.7 Due Diligence in Supply Chains (Supply Chain laws)
In accordance with the applicable Supply Chain Due Diligence laws BorgWarner obliges
all suppliers in its direct supply chain to fulfill human rights and environment related due
diligence obligations in order to prevent and minimize any risks to human rights andenvironment-related risks or to end those in case of a violation. The direct suppliers are
responsible that their sub-suppliers act in compliance with the requirements of the Supply
Chain Due Diligence laws.
BorgWarner has implemented a risk management system in which regular risk analysis
are conducted to identify possible adverse effects on human rights and environment
related topics in its own area of business as well as towards its suppliers for directmaterial and indirect material and other vendors. In case a risk is identified, preventive
measures and remedial action will take place.
Suppliers based on a defined risk category are required to complete a Self-AssessmentQuestionnaire. The questionnaire will be provided by BorgWarner. Further information
involving the Supply Chain Due Diligence laws can be found on
https://www.borgwarner.com/suppliers .

Section #5 Supplier Manual Access/Responsibilities
5.1 Supplier Communication/Access
BorgWarner utilizes a Supplier Extranet site for external communication. This site isreferred to as ExtraICE and can be located at (https://extraice.borgwarner.com). Supplierspecific information such as Supplier Manuals, Forms, Scorecards, Training, etc. can befound under the GSM Supplier Website header tab.

5.2 BorgWarner’s Responsibility
Provide Supplier access to the latest released version of the BorgWarner Supplier Manualfor non-automotive products.
Update Supplier Manual as required and notify SuppliersSpecific approach to access and notification to be determined by your BorgWarner Global
Supply Management (GSM) representative.

5.3 Supplier’s Responsibility
Ensure Supplier uses the current released version of the BorgWarner Supplier Manual.
Provide training to their personnel regarding the location of the controlled version of the
BorgWarner Supplier Manual.
Suppliers must ensure that BorgWarner has the correct Supplier contact information
allowing notification of any changes.

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5.4 Revisions
Any updates to the Supplier Manual will be provided to the Supplier as stated in the
BorgWarner Responsibility section above. Suppliers will be notified through electronicmeans of any changes to the manual.
Suppliers should never use an uncontrolled version of the BorgWarner Supplier Manual.
They should always reference the controlled copy.

BorgWarner/SupplierBusinessProduct/Processes
Section #6 Commercial Expectations
6.1 Purchasing Process
6.1.1

6.1.2

6.1.3

6.1.4

Supplier Agreement (like Non-Disclosure Agreement)- Unless otherwise directed, Suppliers must sign and return the Supplier
Agreement (e.g. Confidentiality Agreement) regarding Proprietary Information
Security and Disclosure to the appropriate BorgWarner Supplier Representative
prior to being issued an invitation to quote.
- Supplier must sign and return all other agreements as requested.
Request For Quotation- Manual Request for Quotation- Potential Suppliers will be invited to participate in the quoting process.
Suppliers may be required to use the forms supplied in the request for
quotation. Failure to use BorgWarner documents may result in a "no quote"status (Contact your local BorgWarner Supplier Representative for further
instructions).
Supplier Selection Criteria- The following criteria can be used to award new business:- The Supplier's demonstrated performance- Supplier Consolidated Risk Assessment- Supplier's total cost competitiveness and commitment to continuous
improvement- Supplier's demonstrated participation in Minority Business Sourcing (UnitedStates only)- Supplier's demonstrated technical capabilities, Engineering support of
BorgWarner programs, and Program Management of new product launches- Supplier’s overall financial condition- Supplier’s acknowledgement and acceptance of BorgWarner’s Purchase
Order Terms and Conditions- Other items, such as customer-directed, regional requirements, etc.
Purchase Orders- Refer to the specific BorgWarner purchase order terms and conditions.

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6.1.5

Purchasing Authorizations- Only employees from BorgWarner’s Global Supply Management (GSM) and/orIndirect Purchasing organizations are authorized to commit monies to a Supplier.
This commitment must be in the form of an authorized Purchase Order. Thisapplies to all direct, indirect, service and prototype purchases as well as tooling,
capital, design and development, etc. The appropriate purchasing
representative responsible for the tooling purchase orders will communicate
these requirements, where possible, on the tooling purchase orders themselves.

6.2 Continuous Improvement
Continuous Improvement in regard to cost reduction is an essential element of long-termbusiness success for BorgWarner and for its Suppliers. In order to remain competitive,
BorgWarner and its Suppliers must recognize the requirement to find effective ways toeliminate waste and reduce the cost of our products.

6.3 Minority Sourcing Program
6.3.1

6.3.2
6.3.3

Expectation- Suppliers located in the United States are expected to have a formal Minority
Business Enterprise (MBE) development program. BorgWarner expects
Suppliers to make every effort to procure a minimum of 5% of the material and/or
services from a certified Minority Business Enterprise.
- In order to be classified as a Minority Business Enterprise a company mustsatisfy the following criteria:- The business is no less than 51% owned and operated by U.S. minority
citizens- The minority owners are active in the management and daily business
operations- The owners belong to one of the following U.S. minority groups:➢ African American, Asian American, Native American Indian, Asian
Pacific American, Hispanic American, American Eskimo, andAmerican Aleuts- The business is certified by the National, State, or Local Minority Business
Development Council
Reporting of MBE Expenditure Data
- Suppliers are required to document purchases from those sources.
Requests For Quotation- All quotations from Suppliers will be evaluated with consideration given to eachSupplier's MBE development program implementation status.

6.4 Terms & Conditions
The Supplier must comply with the BorgWarner Supplier Manual as well as theTerms and Conditions contained in the BorgWarner Purchase Order. The Supplier willconsult with the appropriate BorgWarner Supplier Representative for clarification.

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6.5 Warranty
The Supplier will accept the warranty requirements specified in the Purchase Order
Terms and Conditions and/or separate agreements. Additionally, Supplier will be
responsible for all applicable warranty costs.

6.6 Invoicing
6.6.1

6.6.2

6.6.3

6.6.4

General- The Supplier will contact the BorgWarner plant that will be receiving the productor service (BorgWarner receiving plant) for invoicing requirements.
Standard Invoicing Instructions- Contact the receiving plant for the information to be included on all invoices
submitted to BorgWarner.
- Supplier will ensure that all information provided on all invoices andshipping/business documents and/or electronic data accurately reflects thephysical goods in the shipment.
Invoicing Consigned Inventory- Contact the BorgWarner receiving plant for instructions regarding invoicing on
consigned inventory.
Invoice-less Instructions- Contact the BorgWarner receiving plant for verification and for instructions
regarding Invoice-less payments.

6.7 Advertising and Public Communication
Seller shall not, without prior written consent of the BorgWarner Marketing department,in any manner advertise or publish its relationship with Buyer or Buyer’s customers,
make any reference to the award of business or use any trademarks or trade names ofBuyer or any of its associated companies in any press release, advertising or
promotional materials. Requests for permission on any of the above topics can bedirected to mediacontact@borgwarner.com. Please include a detailed outline of thepermissions you are seeking and the name of the individual you work with in
BorgWarner purchasing for consideration

6.8 Contingency Plans
The Supplier shall prepare contingency plans to satisfy BorgWarner requirements inthe event of an emergency such as utility interruptions, labor shortages, key equipment
failure and field returns.

Section #7 Tooling and Gauging Policy

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7.1 General
7.1.1

7.1.2
7.1.3

7.1.4
7.1.5
7.1.6
7.1.7

BorgWarner will issue purchase orders for special tooling, including dies, jigs,
fixtures, templates, inserts, molds, patterns, gauges, test equipment, etc. as
agreed upon.
BorgWarner reserves the right to immediately remove BorgWarner-owned tools.
Suppliers must receive written authorization from BorgWarner before:- Moving or destroying tooling- Altering tooling capacity- Disposing of service parts tooling
Selling products made from BorgWarner tooling to any other Customer is notallowed.
All Special Tooling owned by BorgWarner must be identified (see Special Toolingbelow).
The Supplier is responsible to adhere to all legal safety requirements as applicable.
The Supplier is responsible for ensuring that its sub-Suppliers adhere to the above
guidelines.

7.2 Definitions
7.2.1

7.2.2

7.2.3

Special Tooling- The following general (not all inclusive) guidelines provide characteristics that
BorgWarner typically considers regarding whether or not tooling andmeasurement devices are considered special tooling:- Specifically designed for a BorgWarner part or product with little or no otherapplication- Life and value is limited to the production and service life of the part(s) which
they produce or measure- Directly affect the part they measure or produce including part specificgauges, dies, fixtures, gear cutters, broaches, molds, jigs, etc.
- Can usually be re-located- May be found between “bolster plates” of a machine or pieces of equipment(including dies, welding fixtures, sub plates, or automation handling devices)
and are not part of the general equipment- Unique computer software required to operate the tooling is considered partof tooling and is also the property of BorgWarner
Measurement Systems- Any gauges, fixtures, tools, test equipment, etc., required to measure thepart/process.
- Measurement Systems may be general in application and usable for many
purposes.
Parts- Any purchased or manufactured component or assembly intended for further
manufacture or resale.

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7.3 Quotation & Design
7.3.1

7.3.2

7.3.3

7.3.4

Tooling Quotation
The items in this section must be considered as part of a tooling quotation to
BorgWarner unless otherwise specified by BorgWarner.
- Tooling quotation must include expense breakdown, including fixtures, dies,
gauging and other costs as well as tooling design (i.e., number of cavities,
material, etc.).
- Capacity of the tool must be clearly defined on the quotation.
- Capacity will be calculated on a 5-day / 3-shift basis unless otherwise
directed by BorgWarner.
- Tool life must be clearly defined on the quotation.
- Cavity replacement must be clearly defined on the quotation. This should be
provided as a per part cost or as a cavity replacement cost.
- The quotation must specify lead-time breakdowns including design, build,
testing and part approval/qualification.
Supplier's Responsibilities- The Supplier is responsible for maintaining, repairing, refurbishing, & replacing
tooling in production condition at no cost to BorgWarner and BorgWarner willretain all title and ownership rights for said repaired, refurbished, or replaced
tooling for the defined lifetime of the tool, unless otherwise agreed to in writing
by BorgWarner.
- The Supplier is responsible for disposing of the tooling at no cost when directedin writing by BorgWarner.
- The Supplier will keep detailed maintenance records for the tooling. The
Supplier will make these records available to BorgWarner on request.
- The Supplier will monitor the tool life and performance to ensure that repair,
replacement and maintenance, whether or not the responsibility of the Supplier,are identified and corrected prior to the time that part quality or production
capacity are affected. This will include regular dimensional reviews on specificpart characteristics. Supplier agrees to make this data available to BorgWarneron request.
- The Supplier will, on a regular basis, monitor tool life and advise the BorgWarnerSupplier Representative well in advance when tooling replacement is necessary.
- The Supplier will ensure that sufficient quantities of components will be in
Supplier’s inventory and available to support BorgWarner production prior toand during the time period that the tooling is being refurbished or replaced.
Tool Design- When tooling is designed by the Supplier, BorgWarner must be provided withelectronic and hard copies of the design and all related drawings andspecifications. Supplier, upon request from BorgWarner, will provide
reproducible tooling prints for any existing tools.
- All designs must be based on the metric system unless otherwise agreed to inwriting by BorgWarner.
Tooling Run-off

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7.3.5- The Supplier must document tooling run-off quantities in the quotation.
Measurement System- BorgWarner's expectation is that all Measurement System devices must be
validated.
- All gauging systems must give readings in metric unless otherwise agreed to inwriting by BorgWarner.
- The Supplier is expected to maintain the integrity of the Measurement Systemand provide Gauge Repeatability & Reproducibility (R&R) if agreed to with
BorgWarner purchasing plant.

7.4 Invoicing
7.4.1

7.4.2

7.4.3

Invoice Amount- Supplier invoices should document expenditures for BorgWarner-owned tooling(including a full cost breakdown). In addition, invoices must show the exact
physical location by city, town, state or province, and country where the tools
will be used in production. Supplier invoices for tooling should reflect the toolingorder amount or the actual costs incurred, whichever is less. Any discrepancies
should be brought to the attention of the GSM representative. The Measurement
System Equipment invoice must include complete descriptions of each device.
Note: Supplier must provide photographs of BorgWarner-owned tooling with alltooling invoices.
Payment Authorization- BorgWarner will authorize payment for tooling and Measurement System
devices per the plant specific standard process. Photographs and proof ofidentification may be required before payment is authorized.
Bill of Sale
- Supplier will provide a bill of sale acknowledging payment and ownership of all
BorgWarner Tooling and Measurement systems.

7.5 Tooling Identification & Ownership
7.5.1

7.5.2

All tooling and materials which BorgWarner furnishes either directly or indirectly toSupplier or which BorgWarner buys from or gives reimbursement to Supplier inwhole or in part (collectively, “BorgWarner’s Property”) will be and remain theproperty of BorgWarner and be held by Supplier on a bailment basis. Supplier will
sign or authorize BorgWarner to sign on its behalf any documents deemed
reasonably necessary by BorgWarner to be filed with Federal, State or Local
officials to record BorgWarner’s title and interest in BorgWarner’s Property.
Supplier will not sell, lend, rent, encumber, pledge, lease, transfer or otherwise
dispose of BorgWarner’s Property. Furthermore, Supplier will not assert or permit
any person claiming an interest through Supplier to assert any claims of ownershipto or any other interest in BorgWarner’s Property.
The Supplier will clearly mark or tag tooling and/or dedicated measurement
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7.5.3
7.5.4

7.5.5

7.5.6
7.5.7

The Supplier will permanently mark the tooling with the part number, which the tool
is intended to produce.
In the event that directly marking the tool is not practical, an identifying mark will
be made and a corresponding record will be maintained that defines thecorresponding part number to the mark. This record will be maintained for the lifeof the program.
A descriptive breakdown of each of the various components that make up thetooling and/or measurement devices, the size and type of equipment the tooling isdesigned for, proof of expenditures, as well as photographic evidence of thecompleted tooling and/or measurement devices must be submitted to theappropriate purchasing representative prior to payment authorization. Specificforms may be required by the plant. Additional information may be required
dependant on specific program needs.
The tooling and/or measurement devices must be stored and handled in a manner
to avoid damage and deterioration.
Any Supplier logo or other identifying mark placed in a tool/die that results in a
Supplier logo on the end part is prohibited unless otherwise approved by
BorgWarner in writing.

Section #8 Quality Requirements
8.1 General
8.1.1

8.1.2

8.1.3

8.1.4

Quality Management System- All Suppliers must comply with the BorgWarner quality expectations defined inthis section. Suppliers are fully responsible for the quality of their products. In
order to ensure Zero Defects, an effective Quality Management System, suchas ISO9001 or equivalent, is preferred to be in place. Suppliers are responsible
for assuring their subcontractor’s parts are approved and are under a controlled
system of evaluation and review.
Plant-Specific Requirements- In addition to complying with the quality expectations defined in this section,
Suppliers must also comply with the additional quality expectations, whereapplicable, of specific BorgWarner locations or Customers.
Customer Specific Requirements
It is the responsibility for the Supplier to:- Pass down all applicable statutory and regulatory requirements as well as
special product and process characteristics to their Suppliers and require theSuppliers to cascade all applicable requirements down the supply chain to thepoint of manufacture- Certification to ISO 9001:2015 “Quality management systems – Requirements”
may be preferred.
Approved Supplier Status- All Suppliers currently supplying direct or indirect material to BorgWarner areapproved Suppliers. Approved Supplier lists are maintained by either theRev. Date: August 1, 2023

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BorgWarner business unit or specific BorgWarner facility. Approved Suppliers
are those we currently purchase from, but it is possible they are not approved
for new business awards.

8.2 Supplier Assessments
8.2.1

8.2.2

New Suppliers- A BorgWarner Supplier Representative will provide access to the BorgWarnerSupplier Manual. A virtual or on site assessment may be requested.
Existing Suppliers- Depending on a risk analysis, BorgWarner may conduct an additional
assessment audit.

8.3 First Article Planning
8.3.1

8.3.2

General- BorgWarner requires all Suppliers to take ownership of and manage the First
Article process. A BorgWarner Representative may initiate the planning processwith Suppliers during a Kick-Off meeting. Suppliers subsequently have an
obligation to establish a cross-functional team to manage the First Article
process. This will typically apply to all Custom/blue print components and not
to off the shelf/catalog components unless specifically requested by
BorgWarner.
- BorgWarner will provide Suppliers with the requirements and dates. Suppliers
will be responsible for keeping their timing up to date. Suppliers are expected to
update their estimated completion dates to the appropriate BorgWarner
Representative at frequent intervals or when there is a change that will impact
overall program timing.
Off Tool Samples (OTS)- Off tool samples (OTS) for custom / blueprint based components may berequired before First Article approval for validations, customer preproducion
builds, machine run off, etc.
- The plant will communicate the specific requirements.

8.4 We Are Ready Process Audit
8.4.1

General- As a verification of the Supplier’s production readiness, BorgWarner, after
agreement with the supplier, may require completion of the We Are Ready(WAR) or similar process audit prior to Start of Production (SOP). Specificinstructions, event timing and responsibilities will be agreed upon between BW
and the supplier if the audit is required.

8.5 First Article Approval Process
8.5.1

General- Suppliers must comply with the plant specific requirements for first article
approval, certain Customer specific requirements could apply.

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BorgWarner Supplier Manual for Non-Automotive- There may be differing requirements for off the shelf/catalog components versus
custom/blueprint based components.
8.5.2
First Article Inspection Requirements- Unless specifically waived in writing by BorgWarner, all suppliers must follow
the plant specific requirements for first article inspection and approval.
- Prior to a Supplier submitting for approval to BorgWarner, the Supplier may be
asked to complete and submit a sub-Supplier Matrix.
8.5.2.1 IMDS & CAMDS and CCC Requirements- International Material Data System (IMDS)- Suppliers are required to provide material data in electronic format per therequirements defined in the International Material Data System (IMDS). For
specifics and further information relating to this requirement, visit
http://www.mdsystem.com. Suppliers are also responsible for the on-time
provision of all IMDS relevant material data for their products and the
products of their supply chain.
- China Automotive Material Data System (CAMDS)- China Automotive Material Data System (CAMDS) is a product data
management platform for implementing the “Recycling and Reutilization
Policy of Automotive Product”, carrying out the certification of recoverability
rate and prohibited/restricted substance and improving the recoverability
rate of China automotive material. Therefore, any product shipped to
BorgWarner for use in the China market may be required to satisfy thisrequirement. More information can be found at the following website:
http://www.camds.org/camds_en.
- Chinese Compulsory Certification (CCC)- The China Compulsory Certificate mark, commonly known as CCC Mark, is
a compulsory safety mark for many products sold on the Chinese market. It
became effective on May 1, 2002. It is the result of the integration of China's
two old compulsory inspection systems, namely "CCIB" (Safety Mark,
introduced in 1989 and required for products in 47 product categories) and"CCEE" (also known as "Great Wall" Mark, for electrical commodities in 7
product categories), into a single procedure.
- BorgWarner Suppliers and External Providers that produce product for
usage in China may be required to comply with this regulation. External
Providers can obtain information relating to this requirement at the followinginternet site: http://www.cqc.com.cn.
8.5.2.2 UL & CE Requirements- All components sold to BorgWarner will require the appropriate certification
based on the region of final use.
8.5.3
Submission Disposition and Notification- There are three possible outcomes of a Supplier First Article Submission:- Full Approval—Parts are fully approved for series production. BorgWarnerMaterial Control will specify proper delivery and release requirements.
- Interim Approval—Parts are conditionally approved for a limited time orlimited quantity.
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8.5.4

8.5.5

8.5.7

- Rejected—Parts may not be used for series production and toolingpurchase orders cannot be paid.
- BorgWarner will notify Supplier in writing when their First Article submission has
been approved or rejected.
Interim Approval- If an Interim Approval is granted, a revised First Article must be resubmitted withappropriate documentation before the Interim expiration date.
First Article Approval Requirements Waived- Suppliers providing off the shelf/catalog components may not be required tosubmit for First Article approval. The specific plant will confirm if required.
- Custom/blueprint based parts must gain written approval from the appropriate
BorgWarner representative(s) to have the First Article Approval requirement
waived.
Shipping and Labeling Instructions- The supplier must request and follow the BorgWarner site specific plantrequirements for labeling and shipping.

8.6 Early Production Containment (EPC)- This requirement may be required for Suppliers providing custom/blueprint
based components to BorgWarner.
- This requirement does not apply to all off the shelf/catalog components, unlessspecifically requested by BorgWarner.
- Responsibilities and exit criteria will be communicated by the BW plant to the
supplier.

8.7 Process/Characteristic Monitoring- Certain characteristics may be deemed important or critical, and may require
increased monitoring to ensure the quality of the parts.
- The appropriate BorgWarner representative will identify these specificrequirements, or characteristics either by direct communication, specification,or product drawing.

8.8 Complaint On Purchased Material (CPM)
8.8.1

General- BorgWarner will immediately notify the Supplier if non-conforming material isfound. Upon verification that BorgWarner has received non-conforming productfrom a Supplier, BorgWarner will issue a Complaint on Purchased Material(CPM), or similar plant specific complaint, to the Supplier.
- Evidence of defect such as digital photos will be provided when possible. A
sample of the defect may be sent to the Supplier upon request.
- BorgWarner will issue a complaint to the Supplier regardless of the disposition
and/or use of the non-conforming material.

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8.8.2

8.8.3

8.9.2

- A complaint will not be issued if the supplier notifies BorgWarner of a potential
quality concern prior to the concern being found by BorgWarner and removes
or sorts the suspect material and replaces it with "certified" material.
Containment Actions
For Supplier providing off the shelf/catalog components, upon receipt of acomplaint from Borgwarner, the supplier must replace all defective parts and offer
replacement of that shipment of parts with a new shipment of that part number.
For Supplier providing custom/blue print components, when receiving a complaint
from BorgWarner, are required to ensure that BorgWarner's plants are suppliedwith enough certified stock to assure no disruptions to production.
8.8.2.1 Suppliers may be required to sort 100% of their product, including productat the BorgWarner plant(s), in transit, in warehouses, at the Supplier's production
facility, etc.,
8.8.2.2 Material may be required to be labeled as certified or per the plant specificrequirements or process.
8-D Reports- For suppliers providing custom/blueprint components, they will respond tocomplaints by using the BorgWarner 8D Problem Solving Form (GSM-F007) orother equivalent form if agreed to by BorgWarner. The problem solving
documentation will be submitted in response to each complaint, unlessotherwise agreed to by the appropriate BorgWarner representative.
- For suppliers providing off the shelf/catalog components, a problem solving form
may or may not be required and an answer to the complaint may or may not be
required. This will be plant site specific and will be communicated when thecomplaint is generated.
Unauthorized Changes- In cases where a Supplier has implemented an unauthorized change or has
failed to deliver contracted products in accordance with the specifications andterms of the BorgWarner Purchase Order, all costs that are incurred by
BorgWarner and/or its Customers will be the sole responsibility of the Supplier.

8.10 Traceability Requirements
Having a strong traceability system is a key component to overall success. Lack oftraceability significantly increases the time for root cause analysis and identification of thesource of a defect, as well as increased financial impact in the event of a quality incident.
Each BorgWarner plant will define traceability requirements.

8.11 Embedded Software Requirements--

Organizations must use a process for quality assurance of products with internallydeveloped embedded software, and have an appropriate assessment
methodology to assess their software development process
The software development process must also be included within the scope of theinternal audit program; the internal auditor should be able to understand andRev. Date: August 1, 2023

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assess the effectiveness of the software development assessment methodology
chosen by the organization

8.12 Cleanliness Requirements
Product should be provided in a state of cleanliness consistent with the manufacturing
process and meeting any BorgWarner Plant Requirements.

Section #9 Supplier Change Management
9.1

General
Recognizing that managing change is of critical importance, BorgWarner has plant
specific Change Management processes designed to ensure the quality and integrity of
BorgWarner products. Suppliers are expected to take a proactive approach to issues of
non-conforming product or any changes to design, performance, materials, or processes.
Suppliers should never ship such product before obtaining written BorgWarner approval.
In cases where a Supplier has implemented an unauthorized change and BorgWarner
and/or its Customers have been negatively impacted, the Supplier will be responsible forcompensating BorgWarner for all associated costs.

9.2

Temporary/Permanent Changes
9.2.1 When seeking permission to make a temporary or permanent change to the design,
performance, or processing of product supplied to BorgWarner, Suppliers must request
approval prior to implementation. Note that any changes to Supplier-specified productcharacteristics also fall under this requirement even if they are not shown on the
BorgWarner drawing and/or specification. Supplier is responsible for obtaining approval
prior to shipping.
9.2.2
Suppliers must complete and submit the change request per the BorgWarner plantsite specific process.

Section #10 Materials/Delivery Expectations
10.1 Delivery Expectations
10.1.1 Plant-Specific Requirements- In addition to complying with the materials and delivery expectations defined inthis section, Suppliers must also comply with the laws of the country of each
receiving BorgWarner facility and additional materials and delivery expectations,where applicable, of specific BorgWarner locations.
- All goods or their containers must be marked with the appropriate country oforigin. Suppliers are also responsible to supply BorgWarner with a certificationof origin for each good and promptly notify BorgWarner if there will be a change
in origin.

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10.1.2 Program-Specific Requirements- BorgWarner may specify expectations for materials during the process, RFQs,
purchase orders and other forms of communication. The plant will communicate
the specific requirements.
10.1.3 On Time Delivery- Suppliers are expected to ship 100% on time to BorgWarner based on
BorgWarner’s terms and conditions as defined in its Purchase Order. Any costs
associated with delays in shipments will be at the Supplier’s expense.
10.1.4 Overseas Suppliers/Shipments- It may be specified by BorgWarner, that Suppliers whose products require
ocean transportation are required to maintain a minimum inventory buffer in theregion of the receiving plant. The buffer should be determined by agreementwith the BorgWarner plant site specific personnel. If agreed to implement, it is
the Supplier’s responsibility to monitor and maintain this buffer at all times. Any
expenses incurred by a BorgWarner facility due to an inadequate inventory
buffer could become the responsibility of the Supplier.

10.2 Packaging/Containerization
10.2.1 The Supplier will plan for the timely provision of containers and/or packaging media
to support BorgWarner requirements. Off the shelf/catalog part numbers withalready defined industry packaging methods can be exempted from thisrequirement.
10.2.2 Approval of Packaging should occur priort to first shipment by the BorgWarnerreceiving plant.
- Suppliers must utilize Supplier Packaging Form (GSM-F012) unless otherwise
directed as part of the First Article approval process.
- Off the shelf/catalog components maybe exempted.
- All Packaging material must comply with ISPM 15 or any of its future revisions.

10.3 Labeling & Identification
10.3.1 General- These requirements are for the printing and placement of shipping/parts
identification labels.
- Off the shelf/catalog components with industry standard labeling andidentification can be exempted from some or all BorgWarner specificrequirements.
10.3.2 Label Size & Materials- The size of the BorgWarner label will be determined by the BorgWarnerreceiving plant.

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10.4 Transportation & Supply Chain Security
10.4.1 Customs-Trade Partnership Against Terrorism (“C-TPAT”)- The C-TPAT applies only to Suppliers providing goods to the United States.
Suppliers supplying other regions must conform to the World Customs
Organization (WCO).
- Supplier will certify in writing that it is either a participating member of the CTPAT program as promulgated by the U.S. Customs and Border Protection
Bureau or that it is in compliance with all applicable supply chain security
recommendations or requirements of the C-TPAT program initiative (for more
information go to https://www.cbp.gov/border-security. Supplier will indemnify andhold BorgWarner harmless from and against any liability, claims, demands or
expenses (including attorneys’ or other professional fees) arising from orrelating to Supplier’s noncompliance.
- Supplier agrees to provide all information necessary for BorgWarner to comply
with all applicable laws, regulations and related legal reporting obligations in the
country(ies) of destination. Supplier agrees to provide all documentation and/or
electronic transaction records to allow BorgWarner to meet customs-related
obligations, any local content/origin requirements, and to obtain all tariff andtrade program duty avoidance(s) and/or refund benefits, where applicable.
Supplier further agrees to assume, and to indemnify BorgWarner against, any
and all financial responsibility arising from Supplier’s failure to comply with theserequirements and/or to supply BorgWarner with the information required to meetlegal reporting obligations, including, without limitation, any fines, penalties,
forfeitures, or counsel fees incurred or imposed as a result of actions taken by
the importing country’s government.
- The C-TPAT Supplier Status Form (GSM-F013) must be completed by any
Supplier that is shipping over international frontiers where a BorgWarner entity
will be responsible for the import customs formalities in the country ofdestination. The completed form, as well as any questions should be directed
to your BorgWarner Supplier Representative.
- The C-TPAT Supplier Status Form (GSM-F013) is to be updated on an annual
basis.
10.4.2 WCO Framework of Standards to Secure and Facilitate Global Trade (“WCOFramework”)- The WCO-Framework applies to all Suppliers exporting goods to locations otherthan the United States.
- Supplier will certify in writing that it is either a participating member of the WCO
program as promulgated by the Worlds Customs Organization or that it is incompliance with all applicable supply chain security recommendations or
requirements of the WCO program initiative (for more information go to(http://www.wcoomd.org). Supplier will indemnify and hold BorgWarnerharmless from and against any liability, claims, demands or expenses (including
attorneys’ or other professional fees) arising from or relating to Supplier’s noncompliance.

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10.4.3 Requirements for International Shipments
Contact the BorgWarner receiving plant for instructions on the commerciallynecessary documents to be included with the shipment.
10.4.4 Invoice Requirements
Supplier, if shipping internationally, contacts the BorgWarner receiving plant for
instructions on standard international invoice requirements.
10.4.5 Packing List Requirements
Contact the BorgWarner receiving plant for instructions on what is to be included
on the Packing List
10.4.6 Preferences/CoO – Certificate of Origin- Free Trade Agreements (FTA)- Preferential Treaties between the Supplier’s Country and the Customer’s
Country- CoO issued by the official agency in charge
The preferential documents must be included with the documents required forcustoms clearance. Any additional costs incurred due to missing documents will
be charged to and accepted by the Supplier.
10.4.7 Importer Security Filing (“ISF” 10 + 2)
- All Suppliers shipping to BorgWarner U.S. locations via vessel must provide
timely ISF information to BorgWarner or its designated Agent. The Suppliermust include all ISF fields on their commercial invoice. For more information,
the following link will direct you to the CBP ISF site.
https://www.cbp.gov/border-security

10.4.8 Import Control System (of the European Community)
The required information (see 12.4.3.1 + 12.4.3.2) has – for all transport modes –to be provided to the forwarder who will transmit them electronically to the Carrier.
The Carrier completes the pre-arrival declaration in the form of an Entry Summary
Declaration (ENS) to Customs authorities at the first point of entry to the European
Community.
This information is used to perform a near real-time risk analysis which will inform
Customs authorities on how to deal with individual shipments, reducing the risk ofdangerous or suspicious shipments being admitted.
The Information must be transmitted timely as described in the regulations:
http://ec.europa.eu/ecip/security_amendment/index_en.htm

10.5 Designated Transportation Carriers
10.5.1 Freight Paid by BorgWarner
For freight paid by BorgWarner, suppliers will utilize carriers designated by
BorgWarner including third party logistics service providers (and utilize their portals
or other instructed method of communication). Suppliers are expected to ship asrequired to meet BorgWarner releases and present proof of delivery if requested
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supplier is responsible for associated costs, including premium transportation, to
recover.
10.5.2 Freight Paid by Suppliers
For freight paid by suppliers, suppliers are expected to ship as required to meet
BorgWarner releases and follow BorgWarner delivery instructions. If a supplierfails to meet these expectations, then the supplier is responsible for associatedcosts, including premium transportation, to recover
10.5.3 Special Circumstances
Under special circumstances, BorgWarner reserves the right to impose the use of
BorgWarner designated transportation carriers.

Performance and Processes Issues
Section #11 Supplier Performance Metrics
11.1 General
This Supplier Performance Rating System presents the criteria that will be used by BorgWarnerto rate production material Suppliers. Suppliers shipping to more than one BorgWarner plant will
receive individual ratings from each Business Unit and supporting detail from each plant. Ratings
will be published on a monthly basis using the following categories. A combined rating score will
be generated by BorgWarner Business Unit—using the cumulative performance across all plants
within that Business Unit.

11.2 Supplier Rating System
A Level (Score > 90)
Supplier is a preferred Supplier for new business (within commodity).
B Level (Score 89-75)
Supplier is approved for new business opportunities.
C Level (Score 74-60)
Sourcing opportunities are limited based on reasons for status. Effectiveness andsuitability of Supplier system should be analyzed for root cause(s) and corrective action.
Improvement plans may be required for review with BorgWarner.
D Level (Less than 60)
Supplier is not eligible for new business award without Senior Management review at
BorgWarner. Corrective action plans should be reviewed with BorgWarner Management
on a pro-active basis to maintain the business relationship.
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11.3 Scorecards Color Rating
Characteristics

Green

YellowRed

Quality(30 Points)
Delivery(30 Points)
Cost(30 Points)
Launch Performance(10 extra Points)
Sustainability(10 Points)

23 to 30
points18 to 22 points

0 to 17 points

23 to 30
points18 to 22 points

0 to 17 points

23 to 30
points18 to 22 points

0 to 17 points

10 points

5 to 9 points

0 to 4 points

7 to 10points4 to 6 points

0 to 3 points

Section #12 Process Audits—Post SOP
12.1 Verification of Conformance
BorgWarner and its Customers reserve the right to verify product and process
conformance according to the requirements at the Supplier's and subcontractor’s
premises—on a scheduled or unscheduled (event-orientated) basis or frequency.

12.2 Auditor Access
Suppliers are to ensure the auditors have full access to all BorgWarner product related
processes and documents

Section #13 Enterprise Approved Sourcing List (EASL)
13.1 General
The Enterprise Approved Sourcing List (EASL) is a list that contains all direct material
Suppliers and their corresponding sourcing classification. The list is managed at anenterprise level. The EASL identifies the following information:
13.1.1 Supplier DUNS number, Supplier name13.1.2 Commodities Approved for sourcing
13.1.3 Material
13.1.4 Supplier classification: Approved/Not Approved/Under Development
13.1.5 Business Unit usage
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13.1.6 Suppliers will not be sourced production business from BorgWarner unless they
are on the BorgWarner EASL. A Supplier can only be added to the BorgWarner
EASL through the approval of a classification recommendation by a BorgWarnerunit

13.2 New Business Hold (NBH)
At times the performance of a Supplier may be so problematic that actions above normal
Supplier Development may be required. In these situations the BorgWarner Global
Supplier Management team may choose to place a Supplier on New Business Hold (NBH).
The purpose of New Business Hold is to signal to the Supplier that significant andimmediate change and improvement is needed. It is the intent of BorgWarner Global
Supply Management to work with the Supplier to resolve the performance issue(s) so that
normalized business relations can occur.

Section #14 Requirements for Electronics Suppliers
14.1 Scope
The electronic content of aseemblies are high and increasing, and therefore plays an
increasing role in determining the overall quality and reliability of the product. This section
gives clarification of the general Supplier quality requirements with respect to electronics.
The following requirements apply to BorgWarner Suppliers of electronic components andassemblies, regardless of the design authority. They are applicable unless specificallysuperseded by the product drawings or contractual agreements with BorgWarner.

14.2 Component Qualifications
To achieve the required product quality and reliability, AECQ-100/101/200 qualifications
are required on all electronic components, where available, and will be stated on the Billof Materials or related part drawings and specifications. Corrosion-prone electrode bysulphurated gas (corrosion on Ag electrode by sulphurated gas, etc.) is not allowed incomponents that have an Integrated circuit. The structure is so designed that theelectrode is not exposed and protected by an appropriate circuit board coating.
UL and/or CE certifications for components are required as applicable for region of end
use.

14.3 Workmanship Standards
The acceptance criteria and allowable rework processes are defined for electronic
assemblies and associated parts. Unless otherwise stated on the product drawings, thefollowing workmanship standards are required:• PCB substrates• IPC-A-600 Acceptability of Printed Circuit Boards, Class 3 (track welding is notallowed)Rev. Date: August 1, 2023

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IPC-TM-650 Test Methods Manual
PCB Assemblies
IPC-A-610 Acceptability of Electronic Assemblies, Class 3
J-STD-001 Requirements for soldered electrical and Electronic Assemblies (TheIPC standard takes precedence where the above standards conflict)Rework within the above standards is only allowed if prior agreement is given by
BorgWarner. Rework outside of the scope of these standards must be agreed by
BorgWarner on a case-by-case basis.

14.4 Printed Circuit Boards (Printed Wiring Boards)
•

•
•
•
•

The Printed Circuit Board (PCB)/Printed Wiring Board (PWB) substrate/laminate isrecognized as a complex component of the overall PCB assembly. The bespoke
design and lengthy batch manufacturing process have unique risks. It is the
responsibility of BorgWarner’s electronics Suppliers to ensure that these risks aremanaged.
All PCB laminate Suppliers on BorgWarner products are required to have
IATF16949 certification and have a Control Plan covering their processes.
All PCB Suppliers are required to meet BorgWarner qualification and tests
requirements.
PCB laminate Suppliers are required to test all PCB batches according to theagreed Control Plan and using the methods defined in IPC-TM650.
The PCB Suppliers are required to retain microsections evidencing these results
for a minimum of five years.

14.5 Traceability
The effective management of traceability is critical to reducing the impact of defective
product, both in the supply chain, and in the field.
Suppliers of electronic assemblies to BorgWarner must:• Demonstrate lot traceability of all electronic components• Apply serial number traceability to all BorgWarner work in progress• Apply serial number traceability to all finished product supplied to BorgWarner• Ensure traceability of all inspection and test records to the individual unit
• Ensure retrieval of records within 24 hours• Provide UL and/or CE certification of components as applicable to region of use
BorgWarner reserves the right to audit Supplier traceability systems at any time.

14.6 Use of Alternative Components••

Electronic products are validated with components from specific manufacturers.
Any variation from this validated condition risks production and field issues.
BorgWarner Suppliers are responsible for ensuring that the specified component
manufacturers and part numbers are maintained and prevent unauthorizedalternatives and counterfeits from being used.

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Suppliers of electronic assemblies to BorgWarner must not vary from the specified
component manufacturer and part number without the formal permission of
BorgWarner.
In the event of advice from Supplier on restricted/limited supply of components,
Suppliers must inform BorgWarner immediately to trigger qualification ofalternative components.
Where BorgWarner has given qualification of alternative components, the Suppliermust maintain traceability of the use of such alternatives, and NOT mix alternatives
within one production batch of the finished product.
As well as component changes, any change of process materials such as fluxes,
solder paste, or solder bar are classed as a notifiable change.

14.7 Alternative Sources of Components•••

The approved sources of electronic components are either direct from the
manufacturer, or through their nominated distributors. There is a greatly increased
risk of counterfeit components when procuring from alternative sources.
Suppliers of electronic assemblies to BorgWarner proposing to source components
from alternative sources (i.e., brokers, non-approved distributors, etc.) must gain
formal approval from BorgWarner.
In such an event, a validation plan must be submitted, agreed, and performed, toconfirm that the components are genuine and within specification. The agreed
validation may include visual, functional, or other evaluation methods.

14.8 Component Shelf Life•••

Manufacturers may define the shelf life of components, solder paste, adhesives,
etc. to ensure that they can be processed to achieve the required results.
Any manufacturer’s recommendations regarding component shelf life and storage
must be followed by the Supplier. Any deviation from these recommendations
requires approval from BorgWarner.
In such an event, a validation plan must be submitted, agreed, and performed, toconfirm that the components are acceptable for use.

14.9 Handling & ESD Protection••

Suppliers must implement an ESD control system, based on ANSI S20.20, or if
applying an equivalent standard, this must be agreed with BorgWarner.
Suppliers must follow all component packaging, handling and ESD requirements
stated by the manufacturers, plus any in-process handling requirements to achieve
the required quality levels.

14.10 PCBA Tooling Qualification•

All tooling used on PCBs and PCB assemblies must be verified before use, toconfirm that strain levels are within acceptable limits (as defined in IPC-9704).
Unless otherwise agreed with BorgWarner, this limit is 500με.

14.11 Software Obligations during Product Lifetime
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Suppliers with software parts have a warranty obligation to provide fixes and/or
patches, along with new versions or updates of the software during the entire
product lifetime cycle, including the spare part period.

14.11.1 Software Quality Assurance Process- Suppliers of product related software, or products with embedded software shallprovide evidence of implementation and maintenance of a software quality
assurance process for their products upon request.
- Suppliers of product related software agrees to have ASPICE report or self
assessments on similar product before, during and after software development
phase.
- ASPICE level 2 needs to be fulfilled before SOP; lighthouse projects cannot be
considered for assessment quote.
- All tools used for software development and supporting processes (e.g.
requirement or configuration management systems) need to be certified for use
in applicable industry. Tools, software and hardware used for ASIL-related
products need to fulfill ISO 26262 standard.
- The network needs to be protected against cyber-attacks. The Supplier agrees
to have reviews from internal and external BorgWarner experts to control
security and data integrity.
14.11.2 BorgWarner Rights to Use Software, including Licensed Software
The term "use" includes the right:- To copy, install, transfer, store, load, test, execute the software on all available
systems including the right to compile the software, or parts of it, for otherproducts- To combine, integrate or embed the software in other software or in hardware
intended for use in or in conjunction with a BorgWarner product (hereafterreferred to as "products"), nevertheless that the product will not be developed
by BorgWarner internally- For calibration, configuration, and parameterization of the software- To use the software as part of a BorgWarner product or together with
BorgWarner products for demonstration- BorgWarner has the right to make copies not only for backups
14.11.3 Supplier Obligation to Use Software Tied to Specific Hardware- Software shall only be used with specific hardware or only be used in connection
with specific hardware.
- The software Supplier has to provide additional software, if necessary, to load,
install and run the software to the hardware.
14.11.4 Software Documentation
BorgWarner has the right regarding all documentation provided by the Supplier,inclusive of the operating manual, to:- use- duplicate (also digital), copy, reprint, scan
- translate- modify
Rev. Date: August 1, 2023

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BorgWarner Supplier Manual for Non-Automotive- disseminate- and otherwise dispose
14.11.5 Sub-Licensing
BorgWarner has the right to grant sub-licenses to the Licensed Software and to thecorresponding documentation to “Authorized Third Parties.”a) This includes the right to use the Licensed Software in connection with all
BorgWarner and/or customer project(s).
b) For developing, combining and/or integrating the Licensed Software with or inother products from BorgWarner or customer, responsible persons likesystems developers / integrators.
c) To render repair, maintenance, or similar services for the BorgWarner Product,
additional, also, third parties which require a right to use the Licensed Software.
d) a) – c) Also includes customers of BorgWarner and/or any of the customer’s
affiliates which require a right to use, market or disseminate the Licensed
Software as part of a BorgWarner Product.
e) a) – d) This right also includes the right to grant end users corresponding rights.
14.11.6 Obligations during the warranty period
Throughout the warranty period the Supplier shall provide to BorgWarner, without
entitlement to any separate remuneration, unless explicitly otherwise agreed inwriting in the respective individual transaction agreement, the following services:a) Workaroundsb) Error correctionsc) Fixes and patchesd) Updatese) a) – d) to remedy critical errors and malfunctionsf) All generally available new versions or updates of the Licensed Software andsub-components used by the Licensed Softwareg) All necessary information, not only with regard to error restrictionh) Error correction and/or error environmenti) Technical support on the telephone or via email
14.11.7 Source code
If the source code of the Licensed Software is not provided to BorgWarner, theSupplier agrees that upon BorgWarner’s request, or in case of ownership changeof the Supplier, or bankruptcy, it shall enter into a source code escrow agreementand deposit the source code at a renowned depository to be chosen by
BorgWarner for the benefit of BorgWarner.

Section #15 Supplier Manual Revision History
Rev
1

Date
Section Modified & Description of Change
27-Jan-2023 Approved & Released for Distribution

Rev. Date: August 1, 2023

Author/Editor
Dwallace

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2
3

Updated section 11.1 to be more specific on scorecard
D Wallaceto align with project to launch supplier scorecard 8/1/23
Revised chapter 4 to incorporated ESG (Environment,
16-June-2023
D WallaceSocial, Governance) elements

01-June-2023

Rev. Date: August 1, 2023

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