Colin Langan: Yes, that makes sense. If I look at the guidance and I look at the high end and I think about what’s implied in Q4, it does imply and I feel like I’m nitpicking because it’s look like pretty good guidance given all the strike issues. But if I go quarter-over-quarter, sales actually still at the high end look pretty flat. But EBIT falls off a bit, almost 80 million or so at the high end. What would drive that? Is there seasonal issues? Is that just sort of abnormal sort of drag from the strike? Why the big margin drop into Q4?
Timothy Kraus: So our Q4 margins are generally lower. I mean, we just have a lot of down production days in the fourth quarter when you think about between the Christmas shutdown and Thanksgiving here in the States just makes the the absorption on the fixed costs a little bit harder when you think about it. So it’s definitely seasonality as you kind of go through that.
Colin Langan: Got it. If I could just squeeze one more in. I think in your last presentation, you indicated sort of a 50 million full year inflation drag and a 20 million EV investment drag. Are those still the right numbers? Have they changed at all?
James Kamsickas: Yes, inflation on a net basis has moderated a little bit, but nothing significant. We’re seeing a little bit lower overall EV investment. You saw that sort of in the quarter. We call out some of its deferral, but we are as we as we start to ramp these programs. We’re getting much more efficient and better as we as we time and bring on resources, getting them up to speed and getting them really productive faster. So there’s some efficiency built into that as well.
Colin Langan: Great. All right. Thanks for taking my question.
Operator: The next question is from Dan Levy with Barclays. Your line is open.
Dan Levy: Hi. Good morning. Thank you. Just wanted to follow up on Colin’s line of questions, but maybe just a slightly different approach. Just if I’m looking at you, you’re saying the upper end of your guide is equal to the midpoint of your prior guide, but that has within that, $250 million of revenue impact, at a 20% decremental, so that’s 50 million EBITDA, but you’re still holding the guide. So specifically, what is better, at least at the upper end of your guide that is offsetting the UAW headwinds that you’ve incurred so far? Is it the thing, inflation is sort of a neutral, somewhat moderated? Is it EV that’s holding in better?
James Kamsickas: So it’s a couple of things. Number one, we continue to deliver and get the operational efficiencies back into the business. You saw that in Q2 and accelerated into Q3. So when you think about both from an operating and cost performance perspective, we’re seeing that flow through the business. We’re also, continuing to see good work from a commercial recovery perspective around margin improvement, and then, the work that the teams continue to do on managed spend. So all of those really core things that drive increased conversion, we’re seeing come through the business. And then, like I said, while inflation is net neutral or maybe a little better, we’re but generally that’s the big driver as to why we’re not seeing or able to cover some of the downside from the strike.
Dan Levy: Right. Thank you. And then just as far as, and I recognize you’ll give a guide on 2024, on the 4th you call, but just conceptually as we’re looking into next year, is it fair to say that there’s more runway on flowing through these business efficiencies, maybe some inflation unwinds starting to hit, are those fair tailwinds to consider into 2024?
James Kamsickas: Yes, I mean, obviously we’ll give guidance, we’ll update guidance in February and we’re watching all of those factors pretty closely. Obviously as we get through the restart and we get a better feel for how the customers are going to run and what the outlook for production is going to be, I think it’ll be, we’ll have a clear picture of what some of the impacts will be for 2024.
Dan Levy: Okay. Thank you. As a follow-up, just wanted to ask Jim about, the strategy on EV, this is a question that came up earlier, two-thirds of your last backlog update was EV. So presumably there is a fair amount of spend that you have on these programs. And I recognize, you’ll give us an update on where the backlog is, but, to what extent do you have the ability to moderate your spend on EV or is it that if you have programs that are in place, this is spend that’s occurring regardless, even if there’s risk that the programs may not materialize? So maybe you could give us a sense of, we’re hearing from automakers that are pulling back on spend. How are you thinking about your spend in light of this pullback?
James Kamsickas: Yes, that’s a really good question, but a very broad question. So I hope I can get to a good point here so it’s clear. But, the first thing I’d start with, any supplier, we’re the tail on the dog, but tail on the dog in a good way from the standpoint, if they push out their spend, that means they’re pushing out their programs, it pushes out their timing, which pushes out our spend. So that’s kind of the first kind of high level way I would think about it. The second thing I would tell you is just that, and it’s hard to articulate and maybe even illustrate for you, but, when we think about the way we’ve set our company up, let’s take motors or inverters, we set them up not to be a program specific product. They are very much so, and obviously they have some exclusivity and specific designs to them by the customer, but the core of our products, that actually goes for the mechanicals as well, is all of those are scalable up the curve.
So if we implement or we install the capacity, human capacity, equipment capacity, it’s essentially all flexible and modular, and we’re able to kind of pull that in. So long story short, as volumes on programs are pulled in, let’s say for the sake of discussion slower, we just have to spend a little bit lesser depending on the volume pull through so on and so forth, but we still will need the products. I mean, none of us on this call are at all in denial that electrification is still coming at a very fast rate. Whatever it was last year, 1% of the North American market, this year 7% of the North American market, etcetera, we all know the stats. So there is going to be plenty of pull through market, maybe not as fast in North America as Europe, or maybe not as fast as Europe as in China, but the markets are going to be there.
Our products are global products. We’ll be able to scale up as the customer pull throughs come through and as the end markets come through.
Dan Levy: Great. Thank you.
Operator: The next question is from Joe Spack with UBS. Your line is open.
