(www.AIAG.org) or the Responsible Minerals Initiative (www.responsiblemineralsinitiative.

org) for more

information.

8.4.2.3 Supplier Quality Management System Development

Nexteer requires suppliers of productive parts and services to develop and implement a quality
management system (QMS) certified to ISO 9001, and to improve that QMS with the ultimate objective
of certification to IATF 16949.

Any direct material manufacturing supplier that is not certified to IATF 16949 will be subject to a
second-party audit by Nexteer Supplier Quality to verify that the supplier’s QMS is certified to the
requirements of ISO 9001 and compliant to the Minimum Automotive Quality Management System
Requirements for Sub-Tier Suppliers (MAQMSR) or certified to ISO 9001 and compliant to IATF 16949.

Suppliers will be prioritized for QMS verification audits based on 1) parts with safety/regulatory
requirements, 2) current performance to Nexteer, 3) quality certification status. Refer to section 8.4.2.4.

A supplier may be subject to annual QMS verification audits by Nexteer until IATF 16949 certification is
achieved.

8.4.2.3.1 Automotive Product-Related Software or Automotive Products with

Embedded Software

No Nexteer specific requirements for this section

8.4.2.4 Supplier monitoring

For Direct Suppliers, Nexteer utilizes a Supplier Quality Escalation Process (SQEP) to identify declining
supplier performance and engage suppliers early as issues are developing to implement sustainable
quality improvement. The intent is to implement a rigorous process that protects Nexteer from any
degrading levels of quality performance at a supplier that can lead to spills and customer impacts.

The SQEP application in Intelex manages and documents the Supplier Quality process for
early intervention. There are 4 stages of escalation (Level 1 through 4). While the levels are typically
sequential, a supplier may skip levels based on risk to Nexteer. The levels with general requirements
are:

Level 1 is driven by the supplier and requires a quality system self-assessment via the NSA and
supplier improvement plan.

Level 2 includes level 1 activities plus additional focus by Nexteer Supplier Quality (NSA on-site audit),
a PFMEA to Control Plan gap analysis by both the supplier and Nexteer, supplier improvement plan to
address the gaps, and submission of the supplier’s most recent annual Quality Management System
surveillance audit report.

Level 3 is the Nexteer Top Focus Supplier (TFS) process. The TFS process requires the active
participation of the supplier leadership in weekly performance reviews, monthly reviews (may be at
supplier location or Nexteer location), verification of DFMEA/DSS alignment, problem solving
certification, demonstrated performance improvement (complaint rate reduction), in addition to level 1
and level 2 activities to be completed.

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