Lear (LEA) 25 Oct 182018 Q3 Earnings call transcript

Company Profile

Participants

Alicia Davis	Lear Corp.
Raymond E. Scott	Lear Corp.
Jeffrey H. Vanneste	Lear Corp.
Armintas Sinkevicius	Morgan Stanley & Co. LLC
Itay Michaeli	Citigroup Global Markets, Inc.
John Murphy	Bank of America Merrill Lynch
Colin Langan	UBS Securities LLC
Rod Lache	Wolfe Research, LLC
David Tamberrino	Goldman Sachs & Co. LLC
David Leiker	Robert W. Baird & Co., Inc.
Joseph Spak	RBC Capital Markets LLC
Anthony Deem	Longbow Research LLC
Chris McNally	Evercore ISI

Call transcript

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Operator

Good morning and welcome to the Third Quarter 2018 Earnings Call. I will now turn the call over to Alicia Davis, Vice President of Investor Relations.

Alicia Davis

Good morning and thanks for joining us for Lear's third quarter 2018 earnings call. Presenting today are Ray Scott, Lear's President and CEO; and Jeff Vanneste, Senior Vice President and CFO. Other members of Lear's senior management team have also joined us on the call.

Ray we by call open remarks Q&A. for prepared and will Jeff, the Following you the can these that note Please find ir.lear.com. remarks presentation at accompanies that

Before Lear's will be opportunity forward-looking statements take as like you conduct the making we in future. assist you understanding we we remind for that this call, this to begin, I'd expectations to to

our on these As metrics. detailed factors latest materially actual from forward-looking results reports. want due our and I discussed in non-GAAP presentation, our that to XX-K in will slide Safe periodic other remind financial could X, refer to Harbor during many statements statement we to also differ today's you

You call for GAAP X. directly are of comparable slides of is Appendix The the the our the for agenda on most directed measures. presentation slide today's to non-GAAP the in reconciliation items to

of Ray highlights review provide review third update quarter will financial will from the update XXXX business provide and then First, quarter. Jeff our our and results financial outlook. a third an

Ray will some remarks. Finally, concluding offer

the be that, we presentation. take Ray invite to will begin to happy presentation, like to With I'd questions. your Following formal his

Raymond E. Scott

morning, Alicia. financial released Thanks, Good It's this everyone. pleasure our speak XXXX job. with our Earlier today. third morning, to quarter full updated results you and a year Great we guidance.

on of adjusted Lear number of a EPS $X.XX As customer-specific quarterly sales In we million, and face performed earnings and see X, of team you of can well. operating challenges, reported per slide $XXX $X.X billion, exceptionally of core macroeconomic the the share.

third quarter, in margins for to capabilities, core flat were at sales quarter outpacing strong XXXX. X% the operating a testament a of decline our over the As X.X% our

our were average, At operating margins by recent production on primarily key grew XX.X%, to also lower adjusted EPS platforms. declines volume X%. historical profitable We due E-Systems' than

these operating team accomplished macro reductions Seating margins factors XX basis Seating offset up targeting helped very doing as were the cost in in well, very negatively year-over-year. operating proud I environment. margins results Unfavorable has things the this year-over-year. conditions like what us industry X.X%, am impacted and However, expand but points in of challenging

minimal volumes As impact focus our the past early in positive given reasons tariffs, have months, slide about to the rates, today macroeconomic very declining North and at Though remain hope trade than continue and, different are foreign America. going be and you pressure about the see footprint, to increased economic through the and think negotiated positive a tariffs. this by in Despite cycle, of year. industry are very economy NAFTA business indicators conditions large know, remains to been With we delays production one there business our are deal term. conditions under the We X. strong. new in looks experienced due North on on has it exchange prospects rising in – the the particularly been American outlined did many automotive that and forward, has the for only very macro concerns China Leading from sector headwinds, A U.S. The few beginning believe these we Europe, is interest to positive. part XXXX. we long Europe, we be risk, auto our for softening WLTP-related environment on bullish demand we

for strong as electrification. our and continue we electric forward, increased and supporting the We move expect this demand vehicles position vehicle in growing leading to trend to

macroeconomic surrounding despite in remain trade optimistic near-term and about this rates long-term policy, and broader critical China, questions concerns growth the about Lear Regarding potential we very slowing for region.

for represents increase a this our us us. the in market tremendous growth numerous market auto are in to opportunities share largest As There China opportunity region. the world, for

most Slides X very highlight excited programs. are we transitioning of key Ford before, in launches some North Many programs Seating Focus important of E-Systems. our key programs and in are segments. and of China. to in launching new major significant GM's and mentioned several vehicle in We're I've Europe America new the X our As about full-size a new models, pickups and number including

We are backlog vehicle. first Mercedes significant which the several XX, premium BMW vehicles, launching like and I-PACE, is various the Jaguar's GLE, Audi models, with all-electric the Jaguar

pursue, last As ended we XX we the is elected told you June. not call, return earnings program did in internal This thresholds. not profile BMW meet on to on production because we the a our our

this are capacity the using We launch to SXX. Volvo all-new

and vehicles Ranger the in the Chevy North Additionally, America, new we launching Blazer. Ford are two

these complex most contain We because new about are launches, they technologies ever we produced. have the product excited some of

As you through XXXX. can see, these launches extend

downtime most after advance eight And us that to Seating year, is of Though these The quarter. to business, reconfigure allow remain will success future. these programs those the in this those in the for very the near of to about as our competitors. not occurring than the some with from of the Though to weeks with an this business were the at of America separate optimistic we lower good OEMs us typical, into vehicles. our are couldn't three for will downtime macro we XX quarter what in long programs. production, This term, the our continue of first opportunity On previous at will in programs, start margin had environment, their we preparation though, these have we continue expecting ourselves of short-term because couple of our tend the North through weeks we current more the in we've gives really assembly experience XXXX, new platforms plants challenges beginning large on build changeover, some industry. the some margins be coveted expect excited is the will a start associated that launches about next-generation quarters first As effects, of term.

look this And the future. our I'd thrive third quarter the over to with provide outlook. more built call to positioned XXXX be company management results in revised to challenging team as the couldn't We that, turn and capable and the like detailed of for Our highly to review times. experienced to financial Jeff we better

Jeffrey H. Vanneste

Thanks, third Ray. quarter. our X% from the were year, a results in backlog significant growth down quarter exchange. the XX foreign last negative sales key on platforms offset strong the Overall, highlights and of impact as production Slide billion, for declines $X.X financial was by Lear

overall compared operating were were While our continued to margins performance. due lower company down at core to X.X%, flat revenues, driven operating strong by year last earnings

were was and in the quarter, decrease of $XX Section wire primarily short-term program. production tax harness weaker a Our in XXXX. million on The China, joint earnings related tariffs per down XXX million ventures certain effective the of share harnesses rate impact environment the wire imported the our Equity to benefit China. $X lower in in from consolidation the earnings from above driven by of X%, and share was repurchase China,

flow by Third quarter our margin sales million third to to $XXX changes quarter In the to million third payments, for in year-over-year working of $XXX operating over sporadic the our shares. flow repurchases; and free provides increased primarily share X.X the investing schedules. quarter, back capital, pace we adjusted segment. and the Free increased due was down of associated the walk XX buy million, $XX cash Slide customer E-Systems with was of impacted levels million quarter XXXX. versus inventory cash timing higher customer

to quarter up sales and consolidated X% XXXX, offset and quarter China production negative lower were a by impact wire platforms down were margins on the somewhat Third driven foreign exchange. platforms. key of key in the the XXXX. third XX.X%, from backlog compared the strong business, lower the by Lear E-Systems Lear of XXX of of quarter impact Roughly production the was result two-thirds basis margin decline on points

of production which supply was and more was by operational cuts, the specific sporadic The the the includes mitigated electronic programs impact Given significant. of disruptions impact certain downward volume negative the components. strong somewhat performance, and nature the on key impacted impact of mix margin

sales During operating spending electrification support the the advanced adjusted connectivity. third as quarter, for engineering growth segment in continued year-over-year quarter. on variance for in backlog explains further and launching we to XX as invest margin well Slide the in the and to Seating our

driven our segment to history repurchases on billion performance, of foreign production operating have lower to of summarizes of cash strong a backlog. Third margin quarter the growth quarter negative lower improvement by margins continued improved driven The platforms. returned revenue strong with was strong by form the third margins the margins, overall primarily $X.X to accretive Lear the from and Despite X%, returning sales somewhat offset by XXXX, and sales, XX shareholders platforms were Seating somewhat Seating impact X.X%. XX Slide over down to in share key by points we key dividends. exchange, lower on basis Since shareholders. Lear backlog, offset production

XX% have an As over nearly a period. outstanding dividend increased and this our year average by per our these total shares of result reduced of time we actions, XX% by

have billion We our prices. market share represents remaining extends repurchase This through of end XXXX. approximately our at the of current XX% which market $X approximately authorization, capitalization total on

that year production assumptions XX revised production and environment. currency We have current outlook Slide foreign supporting and guidance. full our the vehicle to updated XXXX financial exchange shows reflect global the

published on and forecasting production global the well IHS in by or production units, compared vehicle most customer July. XX.X estimates. now schedules recent to IHS as X.X units, million forecast, IHS our XXXX are based October estimates is estimates Our X%, industry XXXX of as internal down million production

Second versus an half have North all Europe, weakened and estimates. America, IHS's half dollar. respectively, XXXX major July estimates X%, X%, versus and China FX perspective, second X%, down production in U.S. are the currencies From

$X.XX an rate the full an per of year of We $X.XX fourth per are implies euro average forecasting euro, euro for which FX quarter.

FX the forecasting year X.XX dollar, quarter China's outlook results our XX year-to-date dollar third rate summary a for RMB RMB through fourth the quarter. Slide outlook an financial average based year implying on of fourth an of full for and our quarter. X.X updated the our to we are RMB the provides the of full to Additionally,

offset midpoint, operating to on million lower key at U.S. Lear Core the platforms earnings currencies now $X.XX $XX Our revised the sales $XX sales, million weaker in driven efficiencies. the somewhat the dollar. billion driven billion be range volumes billion, at $XXX outlook operational by expected $X.XX $XX.X to down by of of the by to versus global the lower billion, impact and midpoint, down is are

strong restructuring prior slightly remains our up our outlook is shows earnings, outlook sales of costs. with cash increased working $X levels Lear forecasting due billion, compared in capital, and flat from Slide flow key growth, Despite down higher guidance solid forecasted CapEx, approximately at XXXX markets, to year XXXX. our financial free another X%. lower XX production to Our higher

is increase forecasted deliver cash, to are continue versus to profitable earnings XXXX. convert as be forecasted growth, X% flow to $X to Also, free continued full year We operating we as earnings approximately cash core billion. to

Now, for I'll turn Ray closing back some thoughts. to it

Raymond E. Scott

Jeff. Thanks,

As better I've we despite opportunities. the longer-term we our been continue in more why a been never will the in think outlines competitive successful already position, about Slide to said, we XX I've headwinds, near-term have be never marketplace. excited and

and excellence. talent industry-leading a have record with We operational of track deep experience

critical segments our business high-performing two customers. have that We supply systems to

As and are to well-positioned a our we continue region well-diversified improve and that to are customer, by backlog diversification. company, through

the balance also and in We sheets have ratings. grade strongest investment credit one of the industry

been have We more financial have had flexibility a we position never than financial better today. in or

Over of shaping strong we geographic Lear allowed aligned The operating capabilities have shared and and and electrification, are segments created very market to executed major continue trends portfolio product key results. strategy global of achieve automotive taken Both have to the E-Systems to the footprint perfectly we've areas. mobility. past product gain steps Seating years, deliberate key and connectivity, several in with positions and in access a our leadership

positions and us. leading represent market connectivity, have and both tremendous opportunities electrification We growth in for areas

As capabilities areas. seating I our seat advantage are control. have via for personalized that in well-positioned mentioned business quoting to of significant cooling, individual increased the before, allow and We're also for shared reconfigurability, we mobility take seat-based these and heating intelligent

venture way to partnerships innovation new that perspective, the in and start-ups, first Our tech give capital monetize capital From developing to most accelerators, the new a needs, potential investment pursuing Technology customer strategic position. to current and pursuing a and access with invest quotes in to strategic companies, technologies allocation Chief dedicated Officer, and capabilities We strengthen also data. us best vehicle is our positioning profitable software, growth. enhance of a our our creation leading opportunities did for team, John and incubators software while market leading in opportunities thinking. the new services, pursue M&A our business a supports priority our that strategy We're allow is the Absmeier, us exploring to

we repurchase share return through our cash Finally, excess to our dividend shareholders and programs.

To capabilities have We business two up, it innovation credit. we maintaining industry that aligned segments technologies megatrends. tremendous are perfectly to and with in are and committed grade sum investment

the every like haul, This best over continuing achieving We of in in focus to the have across outperformed your doesn't group turn for and is our customers, investing consistently It performance business metrics. financial our happen. long major over team that, peer level having just I'd the with result of our the operational growth. questions. now profitable and excellence, the on to And it industry,

Operator

first comes Morgan the from with Our question of Armintas line Stanley.

Armintas Sinkevicius

you taking Good for morning. question. Thank the

stimulus conversations as we're in from the you about China local regards maybe with China the what could the and seeing think production talk Given Europe, about ground with on the macro around XXXX? and you're we headwinds regulators schedules for to your that potential seeing

Raymond E. Scott

Obviously, we was question. related environment softening. some of at I changeover some to consumers to inventory. a due given production had we some the And And issue seen We saw the peer-to-peer ability a good in Yeah, for have the right it getting products. some credit. China lender now, think that's the

days taking I nice some down. of the have job think the on done customers hand a of

see think, will obviously quarter So, will from that saw in potential don't hearing, be third be up. fourth exactly But put that that the some first we're saw we'll we stimulus XXXX. that place do know the softening in the will do I But I is that, some that, in believe put occur, there – place. maybe probably to will I too. into with market be of be quarter, the part I we stimulus there drive when that will believe what

Armintas Sinkevicius

being and takes puts at you Got our the are it. Just XXXX, And in still nicely Explorer, XXXX? level over some of want margins Ford puts the to production high the some there. quite highlight know for and margins about transition you and around XXXX? growth Anything holding with conference then, should just focus. as KXXX/TXXX the market the we're expect thinking I transitions what despite launches we takes and for in mentioned for

Jeffrey H. Vanneste

backlog release when X%, in a but guidance, do, IHS, we From tell line X% business production We've E-Systems' on their least that in Yeah. X% $X.X here's We'll of of is rolling as as of standpoint, and right can next what overall about color October, got is more At year; Europe, provide at forecasting disproportionate and least E-Systems, China. America related January, top I in XX% mix our backlog, and always that's current estimate. XXXX of North Lear in a you we now. global billion today. that's to given amount, the

$X.XX. if will in respect be current with year the go think down, next to at sales the into I currencies, FX something like environment, euro we

XX on half that's the cycle review significant the So, first bit his transition year, first for the of that this which of most a us of alluded foreign half them the launch customer year; year Ray the challenging a currencies. to related is known next are for the TXXX. of to launches XX in down-weeks next to of us. of the KXXX There's in

those from for securing what going realize next XXXX, XXXX, through to and year-over-year tariffs the in year. on – the our going XXXX get significant coming programs So, see that's as impact We've sales that is on in preempt environment, that And pre-inflationary back the have of half, our now likely through launch launches, didn't of tariffs. with past purchased our of higher into to a result, get levels the steel question steel be volume requirement XXXX to process the these be prices the half and inflationary suggesting a XXXX, it's buildup. the going when respect – we cost we first the of steel both to November second see of the steel, or to cadence a relates the steel half sales the full we'll current complete on XXXX in to higher. as so is because just because for tariffs really alluded downtime it steel steel is get the impact as we and we we'll then given the through first we right of the than impact half the had We're as of and price the year

steel tariff the seeing having have are impact next look the margins that and source to On side, it it together, seeing tend what points]. we're the as result, is somewhat a will I locally. right XX% about the or tariffs, to as those tariffs on to extent it to in we as to that company impact put you basis at year And the business, what the up To two XX we business (sic) wrap we small. now XXXX as [XX to relates overall of we're XX% potential on source

thing is for secular see respect The we a growth opportunity, huge with to growth as a this us. story E-Systems, other

to impact continue but the makes it see given So, that in business. small investment, where world – and further And think that that to we in with we sense given business. we invest positioning, are impact invest some will in all that the you'll our trends the margin of

Raymond E. Scott

clarify it's XX%... to not that XX% Just to

Jeffrey H. Vanneste

XX%, get basis you to to points. XX% that? Did XX XX Not

Armintas Sinkevicius

Thank Yeah, Okay. you that's Well, you. helpful. for questions. taking great. Thank the

Operator

Your with next Michaeli Citi. comes the question Itay from line of

Itay Michaeli

everyone. Great. Thank morning, you. Good

Raymond E. Scott

morning. Good

Itay Michaeli

on morning. Good just follow-up a that. maybe Jeff,

or seen reflects some that the half the second You in for sort year of we've of industry of billion mentioned year. a the pressures $X.X industry-wide? of changers the yet that fresh in some backlog Is number next not

Jeffrey H. Vanneste

that the that know point, be some January. don't I that mean, significant. impact we'll it, of there impact in out Itay, changes is to some to coming volume the may but And I be of

updating we'll giving as don't to well. backlog XXXX number. our be that see guidance, change In addition with respect a major But I that to

billion that a is think I still $X.X number. good

Raymond E. Scott

is mentioned XX% this our in And I crossover. exciting these Seating, What's CUV/SUV it's of on think is we've specifically before. backlog

So, from more it's seeing move perfectly with to the past aligned some cars as we trends we're the CUV/SUV. of

are products So, that demand some the hot them of there's a for.

Itay Michaeli

on very of can IHS. want That's just to square I Absolutely. guidance just your make clear. kind quarter fourth the with And then sure outlook,

thinking for or for maybe You Lear's could about revenue what production least in next assuming quarter, share year how of China auto and fourth the China kind you're maybe you're at China. preliminarily

Jeffrey H. Vanneste

Well, I quarter extent quarter-over-quarter North fourth up to so America. is not up of at fourth some they're in China down cases. IHS quarter, less But if QX and regions, our look think with significantly you going key each finds to nearly extent to be respect some programs, certainly that as from suggests those the relatively in in top programs to the our in IHS either industry they're or in Europe,

what the general. For Lear down maybe QX, be is China forecasted example, industry our to unlike saying are volumes in in

releases, I we business So, sales customer we've days this I and three as fourth weeks last overall third we'll really or the impromptu declines generally is industry. quarter, versus will that taking production look think say of quarter or the over what very schedules of that flat scheduling what the in seen out is that the at production schedule. sporadic given months see mix four are with

we're between it call are some factoring with guidance what that, result be call and seeing as is that flat be would of a there all I come. what what seen top still into recently. probably One that consistent likely But may associated is, to we've QX with to QX. our So, sales of line conservative. may

Itay Michaeli

component free then capital particularly flow touch And that. for on lastly, I to Thanks want just the clear. very and of guide-down. cash working the That's

pressure, sometimes Maybe think to become typically of in through when a could that bit next of well. think a could cash. I source that past the revenue under capital little you us comes supplier walk into kind working in about year as how

Jeffrey H. Vanneste

Yeah.

that are been nature the those. few both very a sporadic flow, a result, things. level QX primarily key QX driven And we've all difficult what react a cuts there's capital the So, have as some year-to-date cash in is we've to that of we've embedded as of business, given tied affected the of higher that which result. key by a production and level to One, of seen, couple of our working to seen seen free it's inventory a things

certainly we fiscal related affected see The thing second our saw normally quarter. payment the given new We timing payment of change in when of always primarily going new have payments. volumes anticipate time. non-calendar those broader that we is we that terms mix, customers, end our down, different. in bit would more some perspective, with terms customers each issues customers sales see our close, given historic this But we've and of quarter, some what have the is, timing from and that being lastly, we those we a seen And some in China, some to also up, close, the on customer a our have the of the customers,

down we've somewhat a paying and slightly customers paying sales up. result seen is mature, as longer what a the with elongation the payment So, customers' of quicker terms

result, So, year of and quarter seen what full associated in that. capital a both a the with is as the working buildup we've

cash that different. about fourth flow. typically in this assumption free we of that $X the Fourth of quarter quarter our billion fourth year is quarter, year cash flow $XXX best is no quarter being supports our full million the guidance Now, have free

a much of The to quarter more pretty have quarter and working being consistent year. as fourth generate and Now, that's capital last that into in be quarter, generation cash flow a result. we of free buildup some working come significant result we to the going fourth which capital free with difference as expect down, flow to we're a our cash this what comparison had fourth year's estimating

of it to in will in what that confident guidance quarter free very we're So, fourth our the there. way year full get flow longwinded take cash that's a saying and

Itay Michaeli

Thank helpful. very for all detail. That's that you

Operator

from America. comes the Your next of of question John Bank line Murphy with

Raymond E. Scott

Hey, John.

John Murphy

guys. morning, Good

the confident estimates mean, and quarter, estimates and fourth the keep are these you XXXX? during a get of and seems or going numbers than the shifting quarter slippage do in with, volumes mean, sort up forward. and of into on schedules question going faster the are the and like IHS and how in on IHS first customers I a in volatility scrambling. the I XXXX? how schedules numbers of is read even I Just near-term course world mean, given It kind IHS can you

Jeffrey H. Vanneste

it's pig now. certainly catch. Well, a slippery right to It's hard

As in come before, says the guidance decline sometimes that would that, at my the I the previous seeing John, end quarter, the internal we of what if I our said be sales quick production probably fourth we're forecast deep. and response new mentioned in you look what at high range. today,

What we've do take baked come we necessarily there's numbers is, element the with So, in some don't in of the more that the quarter. specifically conservatism run IHS with them. context well to in and fourth our as of belief we guidance

We customer now benefit to seeing have of releases the of the the end year.

We the customers. own have conversations internal our with

with up that So, guidance. And now there's come of we account said, production there be I belief based right as may some when all downtime more to come. a into of we the conservatism on take level that

John Murphy

how and helpful a image vivid is That's very pig Okay. slippery works. very in a this understanding

appreciate So actually Really does help. that.

Jeffrey H. Vanneste

use to it. Permission

John Murphy

and basis correctly, mix question have year-over-year, at XX mix I'm points, a mix looking and on a margin particularly revenue. what to and Yeah, mix, on you trying and or that was there if should as the is, you on. XX. XXX negative But there was be Seating someday. Seating and and decline went I'm volume volume negative But to title is at page what volume Is say really way parse look to E-Systems negative walks notes understand mix? the also, out I think op my what's we is from might just impact in just and I on XX pressure as and it volume what second in E-Systems

Jeffrey H. Vanneste

me up about Well, – talk let's a E-Systems size let to moment. try for

to that up. try size me Let

the programs like buildout E-Systems, each backlog North In you our platforms was some at primary of up. number were seen the regionally, key second a down, Focus, region. component If the America, and quarter. look the the building major Focus programs, of down it after Europe, then of in our we've be in is

there. the you a And down one that third fourth stratification, the were in plus year-over-year, platforms through one quarter ramp and at And a some on in look significantly announced China, quarter. going it's fairly particular. into downtime, in customer it E-Systems And then So, for overall product business, look if given customer which our disproportionately our JLR if the of customer example, the margin with there, in put issues element, given it a we impacted on a the at carries C's I you and benefit. on investment basis, T's higher this would WLTP a the were mix segment, lot into with – the which thesis carries key

in impacted were T's disproportionately there we So, Europe C's. on and

mature to programs, lion's But the volume declines, overall the to the the ones case, tend that's be in margins segment So, kind the share of incremental our had that the overall story. and it's some margins. mature with of the programs

Raymond E. Scott

it's been. E-Systems to high-growth, just high-margin always I mean, the add, John, is And, same business fundamentally

which secure lower but in of are programs. because let's up there's element the were saying, that more quarter. opportunistic. but quarter, time very up some in mature actually take a the it, base, let's and and we're that We excited to But issues rolling of addition delays on to this in and the we had impacted accretive a was We're programs, ourselves. to programs on about that margins back don't Jeff and is customers, it in mentioned in stoppages new the those Like before, sitting about. said, be investment. us older as some to not we're will invest. production great time that, some customers, these the more We launches protect advantage want as continue we invest. invest, we've bit diversifying time what some in going particular cut What And relationships we the margin, healthy, historical these looking time it's customer here reputation build to be profitability programs. and our a they little this would back to launches customers, with to separate during I and we And we talk are at build our coming really and our good addition now of think cases that the than the these said here with dealing build Jeff I And is time right we're to think with the

we to didn't so, programs. relative new stop And spending growth

think out this we to are important work opposed that's at a looking as we term so, to And very quarter trying that longer short-term.

like play talked within And we're We in than some the optimistic swings but we E-Systems. are very the on about, had Jeff ever. now more long-term positive quarter,

John Murphy

XXXX you're XXXX. there now for the right then might on was pass-through And pressure indexed from I buying the pressure But a steel just was steel you customer. raws. in it was way largely be like other in question it going discussing interesting. by buy like the indicating mean, sounds the I under steel I or OEM impression some you're sidestepped were November through forward the that as you XXXX. sounds working Okay. directly the mean, to one

ability derivatives, of of So, of we as petrochemical as pass there. explain that to what's customer like on just to the curious foam, if you sort going think of through can also, what's plastics, your well? resin, kind your And kind then

Jeffrey H. Vanneste

first. The latter is exposure I'll the us. take to chemicals a small and foam relatively

look say, on buy did are because the On way couple look of year's next to really like the whatever is securing we're the variance, next versus environment to year-over-year XXXX what steel based the I today from steel ago, the weeks. prices a up in at let's XXXX think year does steel side, it

of impact with our of additional to program necessarily some of part customers steel buy our a get mitigate increase from plan on some On today. the price not coverage that were the steel exposure, is to

view about steel, of of Just on overall customer. program year, the recovery or to steel is the steel some billion XX-plus resale buy that give pounds program, buy from under of we each X percent which

billion to that and that programs trying getting not So, at pound further of mitigate by buy, only that on we're on. roughly currently buy we're X steel increase some of coverage we're XX%, or exposed customers

percent really XX-or-less on So the of referred exposure. to that impact is that our I've

Raymond E. Scott

could to just all smaller the that at just too. I it. not and is a if – competitors, our costs player have John, we more, Relative something past grow bit grown talked this little a we just to strategically we're about And in business

we've of not you our only some go and that that manage a structures. control we it components have components but directed into we to so, We business don't control to when large the these negotiate a because there's for. deals our want structures have of capabilities, directed we we chunk lot just in business. specific, more give We of And relatively And manage have suppliers. source and can our kind and kept smaller, – insight,

can And them in customers alternatives. we're situations, we that so, with up we and VAV, built contracts it we materials, when and queue go get these we're doing changes, do right In levers the other situations, a of particular on that now, that we design our offer if pull. our customers. And we very type have into aggressive have substitute can

ways aggressive of very the saying, here's heading front head into and a approach; them for things down. customers but XXXX, optionality or mitigate listen, in sand potential here's hopefully with not these out be continue it taking mitigate getting go a to could will obviously in some so, hoping just end our to we net burying at and what And day, this can you, we're things our away, and the that problem. of we have some productivities of reduce our some cost that then And we negotiate and

John Murphy

million. revenue on looking operating XX, core lastly million, up then only page Okay, just at $XX midpoint that's $XXX helpful. we're but And up earnings

So, that of at a sales XXXX? XXXX, and that large kind be saw everything mean, of in of operating kind basis billion, earnings small better are the reasons say than increase to we on, XXXX reasonably increase? else the I linear of And have and same in are margin XXXX a if just on incremental put as if is and a just go to what the about willing we equal I'm next increase revenue in with on you're see much there, you sort backlog grows hold should year up only the we or realizations sort $X.X we curious pressures illustrate core led hook on you then, that net what just think if XXXX can to look should

Jeffrey H. Vanneste

year of mix Seating, that of very with to in going thought changeovers half is I is a impact in Well, pretty year, significant year on the the and what beginning that more exaggerated are year think that level like. said than what we the originally so is the turned downward for an have we going we're the to what example, initially going in seen volume we've in consistent look have thought. was But second Obviously, program of in general what to margins. we it of impact the

of impact XXXX. the also We this tariffs, secured be thus in immune kind the was going on Albeit challenge. deal indicated higher was far XXXX commodities of we from a that pricing we've to been that year-over-year from

to impact as basis you also different E-Systems, see So, of E-Systems. margins dilutive business. margin. segment will up backlog that given business, broader grow costs It's the we be it's also think to is in of no And is our macroeconomic gets third wire that happened now environment that investment obviously, the very and had One, a significant wire course we before, the And in the harness business before. thought backlog, the we the have XX% associated that. to we segment. pouring point, it's industry we impacting we there. the that of versus potential saw on overall result. that in invest footprint margin growth what continue with because the other XX attribute the support what can we're different to continued we're things in had year points in on into the China, – launch in fantastic and But margins that segment decline to significant to but what north than roughly quarter going during us year-over-year, business, to the harness Ray's said a China the margins ability that couple But a were And that

lot that change. the platforms the originally production things So, of our of really and it's declines guided, from what key remain declines what created consistent is but specifically on we really level

John Murphy

we a so factors you of that forward kind seem things like were lot look those XXXX, elucidated or to far. if to So illustrated of

the Or saw factors stability of in still volatility come the pressures that in XXXX? which mean, So, in same really from the saw you you XXXX margins XXXX? that and that and of these around your maybe will do I would kind what understanding managing think is you kind it schedules drive sort just of potentially in that higher than of incremental there's

Jeffrey H. Vanneste

to in that think environment and same could – margins I macroeconomic XX% E-Systems Well, I to the if we XX% industry see speak range. that is the –

this as the Now, what and and change on that through grow. recovery C well business platforms, in affected disproportionately that? Obviously, the can key of some volume T's further that margins WLTP getting segment

there mean, industry should to we a primarily, margins. kind going to the command and be continue to But improve. (XX:XX:XX), we'll grows annual at not but, there's mathematically, we as of margins obviously, the business that programs, forward. electronics, see, I be going range connectivity which the is I margins, XX% be So, is growth as to given think basis an pathway at higher – it XX% look mean, And, today, a term I going longer electrification, improve in to more

Raymond E. Scott

Yeah, John.

we the mean, backlog. it's tied overall higher that and key our And I in business very revenue E-Systems is backlog have think in we strong revenue drivers one the our and in our about to today. growth earnings disproportionately I the growth, to relative is of talked growth and E-Systems, backlog,

are faster investment changing the in when the look and growth the margin that's profile, where and we're electronics, So, E-Systems is really E-Systems E-Systems electrification to but And so the electronics looking the higher relative engine split electrical so at – That between that but electrical opportunities is also though the is off great, profile. which not and but divisions but we're is the and taken the is And the why we're that's Seating, with connectivity. investment, with company growing, electronics. big business, – that at growing just to the electronics. we profile Seating. electronics, is that's even is And both too, are relative portion the going

that And so good grows the ourselves we're in putting earnings. position, a really and

John Murphy

could That's $X.X between really quick year, Okay. And if Seating, backlog what's next E-Systems last just very remind the just helpful. question billion you roll-on question. us. one and The split –

Jeffrey H. Vanneste

XX% E-Systems, XX%-ish.

Jeffrey H. Vanneste

Yeah. Yeah.

Jeffrey H. Vanneste

so going like that XX% in is gets to Seating. that And our current Ray's mix XX/XX, point E-Systems. of business in we're faster

John Murphy

guys. much, the pig. you catch to very you Hope Thank slippery great. Okay,

Raymond E. Scott

Thank you.

John Murphy

Thanks.

Operator

Colin UBS. question line of Your with Langan next comes the from

Colin Langan

my taking question. for Thanks Great.

I is make this, think covered John sure my enough. already but math

the as margins for margin? to I get full QX, we correct? guidance flat implies but the that roughly Is about should think sales year for worse. QX into deterioration what think your And

Jeffrey H. Vanneste

is, of that that in had levels earnings kind traditional in think quarter, Seating respect range, Well, QX issues those of E-Systems some of that related the of some X% maybe that with commercial around in low that, really had to But there, flat was Seating in the are other I is third that the to and than seen what resolved in QX, to tailwind more we've part in points in it that basis that the there was XX% about which territory sales. settlements. it's the of timing area. XX the speaking, same generally XX% margin saw quarter were level similar Seating And of on we level

Colin Langan

mentioned risk? this guidance about we Should the year any into about it. mean, commodity, of you for Got mean, to X% mean, maybe should some And XX% is sort launch looks XX% range putting the I margin? there? right type E-Systems. I costs next at point? that of I think right a like year full how Seating we the think

Raymond E. Scott

we're what that think number. I annual I X% of did it is quarter, of going quarter-to-quarter. some the mean, yeah, on cadence. highlighted want understand basis, through And cadence X%. are great more the that really Colin, and and Yeah, give of idea range some But, that first launches intentionally from the I I you to everyone launches annual is margin an in that

Jeffrey H. Vanneste

X% the given I But see others. or And in of in is is X% X% to probably to cadence above to in what add color that on in that Ray's X% launches number. an annualized and think add a we're and in some and point be around, and Yeah. just volumes, we going below to

the half lower So first half. second we'll that's launch, And in and that be in higher view. given an annual again, the probably

Colin Langan

should quarter Got if of in issue the too QX, terms it. sort market? we of any the gauge IHS, more That China if for mean, sense that a in makes just we if for of down percent, bit circling weakness see lastly optimistic how sensitivity it's sense. one China overall on I And is back the the

Raymond E. Scott

– I customers growing Yeah. with Geely but and overall Geely, it outpacing domestic you market. and we're our the I guess, position of that's one customers, is the we customers. mean, market, the with look have at

not way look like only with as what's in with or the look the selective we so, specific or we're been then And at why programs And industry on. it products the platforms and the what are, China launching those we're far domestics demand. there's the and that is, do they of we've that's placements very there's product some China where growth, as these

volumes of happen, of And just and growth we're our with to the fourth next and not lot with. what's study of Audi quarter, launch the there's so, we're going things even that China programs launch though there player and we the a relative now into – a talked and the well-positioned about year. heading But in Geely And to customers today. excited smaller major that's of one because, – in exception we're Jeff is it right to we're to the growing one, and but fast IHS, different other there going it and alluded with cadence

Colin Langan

my right. taking Got it. All Thanks questions. for

Operator

Rod the of The from Research. Wolfe comes line next with question Lache

Rod Lache

everybody. Hi,

Raymond E. Scott

Rod. are doing? Hey, you How

Rod Lache

you hoping I things. a can few clarify just was

as a of the from year, about the the during was revenue first what's of actually year Because well. next there fair of that for comment half downtime perspective a you? downtime magnitude this Your amount

Jeffrey H. Vanneste

downtime January. did and the downtime, that to of probably did that quarter. was get – we we to year. We quarter. what's at there we've third is this we But going the it's mean, we'll a to significance had not it But I'm it I want Rod, in I unlike our in guidance what But typical had not January. insight we the do. those year have give significantly we'll numbers different it. that out, this of highlight mean, first in more in amount time. and want That's into the give fact point

Raymond E. Scott

a down, eight this Maybe four known pickup respect with going Rod, SUV the and first customer downtime, GM and first there's the of plants of offer you, and I couple quarter, would second weeks which to to In other to the quarter. of four relate that's relate and that to Explorer, the Ford in GM weeks is going vehicles And launch. of the to relate of pickups quarter, Chicago, through three one all downtime customers and then the and have in there announced the the SUVs. second

So, they're truck-type contented SUV, high obviously vehicles. on

Rod Lache

Yeah.

Raymond E. Scott

running; up up we'll have thing, Blazer running. and Ranger the running; that we'll the is up have GLE again, have the we'll and Rod, the and But,

in now these be full and but of first downtime quarter. running quarter run into heading that will up rates is right programs there and launching the key hopefully So, we're some second platforms, these

Rod Lache

launch and about a has costs that this Okay. plants just just two be How You Yeah. seems this to the we thinking year should had versus size bit, changed It about next tone up. trying reacceleration like down year. your year? we're GM go

the in goes You've the not it's year actually is got going middle the down then Arlington till the in – of late duty two heavy one, year, down. and very that

is higher? thinking costs there should So, being we about launch – be

Jeffrey H. Vanneste

a fulsome come would out. give level I going January we're very to I guidance this, of Rod, said when in say we

time. at we'll give that information more So much

Rod Lache

Okay.

of what you're trying here, to providing. work hints so, sort about we're around giving You're things

backlog. about $X.X You guys have talked billion

You on negative typically just million of your based $XXX price price do deflation. historical

the about you're tailwind changes of to year, instances. some from And just be in production got next year billion you've like $X it this factors those So, that excluding production. lower sounds versus any suggesting will

Raymond E. Scott

all, Rod. No, that's not saying at what we're

you saying disagree – you're said. anything I pieces which out is don't I the we're think think I with picking what is

industry production So, we $X up of got billion X%. backlog,

given going that the talking to about the its think draw It's to a second bit But schedules you what everybody's FX by sales What we're to announced year. top half, we're customer terms we're is situation you're think message to what to the line be the disproportionate in across. The during cadence current attention be conclusion to I more the trying get trying on environment draw point heavy which we're launch see out I LTAs. and a year. is out little in for trying down. can to customer roll probably going of the we're would That's the downtime.

Rod Lache

Okay.

I clarification. that's, So an think, important

that trying or a your year. to not suggest that this you're versus Is today as you're be fair... that looking down at will So earnings flat things

Jeffrey H. Vanneste

come again, we're to with... Rod, going Look, out

Rod Lache

right. what I know you're not saying is – guidance

Jeffrey H. Vanneste

Yeah, what is we're today. not to That's going earnings guidance for reserved be on say January going in Detroit. to

Rod Lache

your... And Okay.

Raymond E. Scott

this think had public don't we're – was that down before. to was weeks quarter there's more historically isn't information I not that just had Rod, We've trying mention. we've then, put it said, of downtime we're out first I Like only them year. in anything type the I And trying Rod, to remember there, the this it. the timing can't having Yeah. of point

Rod Lache

this should Okay. that terms on lastly, flow things at, cash on differences with how some you've And you also year. color free to in of just customers you the based restructuring any adjust the just hinted and then alluded got we additional

that's you free there from flow give into that can we of color now think and business see kind of next the we As what changing? the on is generative right power cash year, extrapolating about any how us

Jeffrey H. Vanneste

to changing I that in sudden this flow. I change all don't sudden significant it a the there's of cash cause don't that for generate see any that see there's dramatically. alarm ability

and will changing, the never think continue power is I the generation stronger. of power business flow, we to not earnings been significant opinion has our cash cash it generate in the

Rod Lache

million the it cash adjustments that. lower Okay. you free your I and flow to to you $XXX restructuring this – some changes – to was year, contributed sounded cash and and lower million like were that mean, $XX I were $XXX million your there there EBITDA flow was your or, actually and by free lowered EBITDA the guess, changed almost But about by terms some

Raymond E. Scott

these events. payment of times are lot customer A onetime

over mean course pinpoint at the deal It period getting it if then you with paid. we're of it the time, that be You change. it will. new doesn't doesn't It you means and But less. could when time, of that norm, happens, a not that's it it, when initially

Rod Lache

Okay.

that's you. So extrapolate prospectively? Okay. right. we should Thank All not something

Raymond E. Scott

Thanks, Rod.

Operator

comes question with of next The from Tamberrino the David Sachs. Goldman line

David Tamberrino

revenue got simple going a bid you. margin million, with the headwind Can questions to on E-Systems the you down. Yeah. two segment? up operating $XXX We backlog tell that us it and business of what's margin's in came for that why as you

Jeffrey H. Vanneste

the to specific sorry, backlog? I'm

David Tamberrino

I'm I your Well, walk XX, slide looking backlog million sales up and... see $XXX has at and

Jeffrey H. Vanneste

Yeah.

David Tamberrino

the margin segment just headwind. trying XX and it, came below margin. earnings ...at adjusted why to than bps I'm in understand that a right it's worse

Jeffrey H. Vanneste

that. Yeah, here's in the story

that came in onboard typically number we've So, segment. that with came million at that's business overall comes the a said of margin this of a than backlog lower XX%. times profile This that margins approximately onboard, $XXX

last year XX% quarter. we saw third that the than the less intuitively that's in So,

So, business. But it's improve. great day under margins. Those they're will one slightly margins segment the backlog, from

David Tamberrino

Okay.

Raymond E. Scott

Yeah.

David, – a expanding little this. We're I that, mentioned customers. think I just our talked really about we we diversification of mean, bit

Geely, Mercedes. business, and new we're Audi, I and Volvo, so, launching said, and like And with

we launching work with performance we're as here start – there's time build as so, element relationships though great to programs, And profitability business customers. these and a some even they're these and we from the work standpoint,

at So, not rate customer of but base that and we're seen. profitable, great building the are what of launching great products a historical you've diversification some

Jeffrey H. Vanneste

Yeah.

depict happens that to graph, margins. that if of think as XX% of meant implications to I baseline that the opposed that great or a it those against note slide it's XX%. important XX.X% And is just to you is to business, will, be items

David Tamberrino

balance chop earlier were on of inventory levels speaking both your inventory at your about Understood. versus piqued your inventory today do the levels my sheet feel and And customers interest, products? you for sporadic some production the and you changes. How your are

Jeffrey H. Vanneste

quick. cases, you of it so can and was One, intermittent and timed, was was some a that there said; we In significant actually adjust some quicker. like cut,

customers right over that three And next inventory In launches aggressively. attacking are so or our something of some to to now. cases, we're weeks we're our very protecting that the going occur right now occurring is four levels because

In we I So some In like aggressive taking excess their mentioned, other cases, how us. held protect launches. inventory at some of more much steps, they're cases, we're intermittent. have quickly because came to they

David. to resolution And and right now, take have so commercial we're something actions aggressively internally, the but there's we that's attacking

David Tamberrino

So there down bit a that is opportunity work an too inventory? much little have to you and

Raymond E. Scott

Yes. Yes.

Jeffrey H. Vanneste

Yeah. And historically we do.

inventory lowest and to adjust the typically we inventory level chance because the whatever. is downtime inventory year-end Our levels, have we down given Christmas have, a

a that the of lowest levels So the the at inventory historical at end fact the is year. year point that is of

David Tamberrino

All you, right. gentlemen. Understood. Thank

Raymond E. Scott

David. Thanks, Yeah.

Operator

question The comes next the with line Leiker David from of Baird.

David Leiker

morning. Good

of booking mix are a Just I'm wire like Almost of and launches, of about harnesses on have might than any in new at question. your E-Systems looking how your launches XX wire – wins that much for more wins all a harness? of X than something one contract are them business? Can more look have wire something there think half us of and slide I them terms your you harness. give your characterization How there.

Raymond E. Scott

of then the I at looking But in can heavier backlog and just book we're what now, – today. a update. is our business given electronics, give Right Yeah. are wins

And so XX% the we're at electronics business XX% winning of is range of electronics. in we're the looking to

David Leiker

That's All all. right. much. Thanks Okay. so

Operator

with line the Joseph comes question Capital of Spak Markets. Your next from RBC

Joseph Spak

globally, at you seen of that. about if $XXX But close that. bit just this wanted because the lower don't what does million relate free of year. sort end and experience it year know anything of you've We changes get to of I seem in well lower sort I some down – at because in flow cash I here we of Thanks. excess – little about a analysis cash of timing free to the I $XXX think get like the didn't is back your showed downturn the and the it, flow free that be really right, that of to annualize income, operating that talked we guess, scenario, sort anything of flow. to sort million XX% all, you cash

really in business have react? it timing of is the how you or anything learned will So, else terms all

Jeffrey H. Vanneste

time and indicating. I see result, all and as I think of within picture And as a associated equalized what I any long paint the that's capital see Again, trying period customer do haul. payment we're time. end no, we're change and December, over of that the defined payments the don't customer a of the to timing a working over it, major terms with business in gets

XX/XX – no generate cash basis, but there all date, as of major flow. to ability As at that be of implications that given significant a is on long-term of yeah, the going to free to company some amount change

Joseph Spak

Okay. Thank you.

Operator

comes Your from Research. the Deem Longbow of question of next line Anthony

Anthony Deem

Hi. Good morning.

Raymond E. Scott

morning. Good Hey.

Anthony Deem

at on materially allocation M&A what capital priorities. a had question for or just with wondering your appetite group these your Lear levels; valuations quick is I'm lower, share I repurchase reset prioritizing is share over buyback.

Raymond E. Scott

priorities. through So, I the went

returning as I our we of then is and our is have right last board business valuation in profitable as November. invest one soon of priority as first to meetings directors is excess obviously, we'll even the And the with at obviously, to cash shareholders. second, growth; now mean, M&A; Lear, Our for look the

type But those as And those our things. our have so, are as of we'll consistent, very far discuss priorities go, our and remained priorities priorities.

Jeffrey H. Vanneste

in to one in result I'll a result. generate a and what our a buyback our in our to result quarter flow. flow. of were ability of valuation, cash extremely opportunistic the and that that, and and on free seen as share as share elevated significant thing, price we our we And cash of as we've gets We add back feel questions confident free amount And Yeah. had the we've

Anthony Deem

of happening expectations, but assume you. if saw expectations. the question. end through like, other suppliers last that on you throughout cuts of your order Thank October. from order one cuts here, near October obviously seeing I'm just week-to-week wondering well. sounds lowered heard incremental quarter it incremental the then and And you. you're third Thank trending in the customer third But We've quarter, you're high I week-to-week as

Raymond E. Scott

at cuts reason start seems hands, why going been we've schedules. we been and on the even look forward seen And quarter. inventory that's – But, Monday days not what recently historically to on what's a how levels, it doing, has the fourth come I those releases, described Yeah. recently the Well, on of the what what's conservative, there's customers changes Monday but yeah, I as looked and been really one at in, think going looked with it, every pig. everything at and we've is always know the you going are to the most in guidance changed greased

Anthony Deem

one just more Can assume Europe. there? mainly I China ask follow-up that's I and

North too. in America if incremental any custom cuts Just order wondering there's

Raymond E. Scott

Yeah, of and a China primarily been categorizing. been It's China Europe. way and that's good Europe. has It

Anthony Deem

Thank you.

Operator

comes Evercore. And McNally question of with the line Chris our final from

Chris McNally

much, five customer rolling discuss asking the of again. QX margins you The rehash, XXX in production, I to guys. year. over margin I'm headwind WLTP, call Then from maybe electrical XXX. can same China this is so fourth down know order XXXX, talk outlook, I've business going everyone's but standpoint, said because mentioned question some customers China mix, most? discussed to over sort then higher I production, and just try three – those restricted two Section year-over-year. of how you've headwinds, think off on. you're from rolling the listening is a backlog lower But you Thanks dragging basis written you the down and the know qualitative to the I which the want you the of points new fifth, rank and either to the margin terms about or about of down

Jeffrey H. Vanneste

OEMs far declines significance Well, platforms, say, ranking, impact. Focus – key our platforms the volume declines I key of in biggest me second. they would that necessarily were by a not that on terms about of those the think – that let more the significant. very that The next, in would that platforms, North was some customer/T's the on would And Europe, I I was think mature business of specifically say significant. where but America, business. say built-out also and China, European for program I in European America-focused, very would some then, and significant primarily C's European us and say North of pretty But a OEMs, was have I key impact America. of we the North T&C the the

Raymond E. Scott

to we want out but to this invest. I in up a timer, And was quarter-by-quarter. one electronics point Like investment said, year-over-year as we our continue

There's factor want issues the But supplying there's smaller issues. those you the that supply having think lot would was issues. that of And big trouble just parts They're quarter. So, was prioritizing some within looking manufacturers. relative a a chip be to to in it, disruptive if quarter. the at – say I

Chris McNally

will ask key if XX% really second about that of XX% to that's helpful, as think continue a those four, in half of in or I of would low a one there's look China. you a of the headwind because be to we probably much at And new Focus the you obviously, in year-over-year at for XXXX. going XXXX, this, basically then, is look XX.X% think implied platforms norm post the I the visibility sort when questions build-out and margins less this mean, Okay. people not call WLTP the talking is, to as the obviously, around

a people better, in downward huge are China some know particularly if second that we reverse we've to you mentioned. and want half? of Could that's if, move that to seen gets I going think as

Raymond E. Scott

I for We're a way environment and look Yeah, factors, to looking and annual or we're and if lot midterm, factor of think XX% at believe in the That that would in a a near back lot that's we're I today, China looking macroeconomic snaps – I the what us, term margins, it, we not you of should production absolutely. big at we there's right we current persuade the at. now. think be at that factors to like mean, XX% perform will around see mentioned. E-Systems what that, just there's in

pretty that's talk snapback. you a the when E-Systems, of up to given producing that relative some to about a big products range margins, in sensitive accretive a are of that the volumes size go quarter. Some we're the It's

can think that I So, and In take the move in a right looking it a it what much term big doesn't for long looking both business and on to doing going. not down, at term picture, something. building it we're do specifically that's the that And where up business. we're and optimistic that quarter, longer at we're that very much business in is everything either, is

Chris McNally

that's great. Okay,

XX%? actually backlog of think a growth Is about the And the in back number growth some you the targets, comes between and of the about the XX% that term your one, bridge of that platforms your – that key medium mature. sort margins term near for markets the clearly that, good type margins assumes some to and and in talked way so that previous essentially the this probably

Raymond E. Scott

great at that's looking Yeah, of way a it.

Chris McNally

Okay. Thanks so much, guys.

Raymond E. Scott

Thanks.

Okay. the this say to is for people some right we thank the XX and manufacturing the a know now how these I things. but been in situation. left employees have over business can only We've in We've us, things work. call we more do this and in One, just I conditions. in now, type I think Lear and never tell a because Well, of team team Right that I you – front put on I the want to you there been challenges probably and this plants the your can few – the we can in all best I operational well excited, know are hard place. excellence operate are we've how last And years. of the built to the want

what We ourselves I two know can do, excited. doubt separate running you because want I from segments well. can And are that looking without that I'm great and businesses extremely we forward to have a business competitors. our know we just I'm to

And serious now. for right are having launches. issues have that. don't We competitors built we're some success Our with

looking for you're thank the to and do what I'm doing So, you forward everything going future. to we're in

Operator

Thank you. conference That this concludes call.

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