Bill Siwek: Yes. Yes, so as the line count was a little bit different last quarter, and that’s because as we’ve gotten deeper into discussions with customers, and we looked at blade sizes. The number of lines have actually come down a little bit. But if you were listening to the prepared remarks, we wind up with the same number of gigawatts of the same capacity of 15 gigawatts, because the larger lines will generate – obviously, we can produce the same amount of gigawatts or megawatts that we would have otherwise. So we add to four lines. We had four lines in Mexico; We subtract four lines in Mexico as well, the Nordex lines, right? And then we were – you think about Iowa, which is probably four to five lines at this point. And then India, adding a couple of lines there as well.
Justin Clare: Okay.
Bill Siwek: Do you want me to be exact? Yes, we’re at $37 million you add four in Iowa potentially. Again, all, we’re working with GE to still determine the right time for that to open based on clarification around some of the IRA and what their demand needs are. So, that’s still to be determined. But think of it as four lines, Mexico, too, we just talked about, which is four lines, two more in India, two lines in India. We take out the – or the four lines for Nordex and Matamoros. When we transition to a larger blade in another plant in Mexico, we’ll go from six lines there today to four lines. And then same in Turkey, in both Turkey plants transitioning to larger blades, we actually lose a line in each – so if you do that math, you get to 39%. But it’s the same number of the gigawatts, if you will.
Justin Clare: Right, okay. Okay, that makes sense. Thanks for walking through that. And then just on the cost of inspection and the increased focus on quality here, I was wondering, does that serve as a headwind to your gross margins as you move into Q3 and Q4. How impactful might that be? Maybe you can just speak to that element.
Ryan Miller: Justin, this is Ryan. I think a lot of that’s behind us. So we went through a bit of a learning curve and some catch-up on some blades that were – and we talked in the first quarter about how we had – we slowed down deliveries, and so we were catching up on some of those inspection and repairs. We’ve now got a lot of that behind us so far this year, and you’ll see this disclosed in the 10-Q. We probably incurred around $10 million of higher inspection repair than what we had planned at the start of the year. There’s probably still a couple of million dollars left over the balance of the year, so a total of, call it, $12 million or so. But we think a lot of that increased cost is behind us. I think we’ve gotten through a lot of the catch-up in learning curve that was the pace we’ve gone through those.
It actually has helped us identify areas where we need to go back and build more quality upfront and make it more proactive instead of reactive on the back end and catching it later.
Justin Clare: Okay. Great. Thanks very much. I will pass it on.
Operator: Your next question comes from Eric Stine from Craig-Hallum. Please go ahead.
Eric Stine: Hey, everyone. Thanks for taking the question. So, I’m just trying to think through these quality issues and what this could mean longer term. I mean, clearly, it sounds like you feel that the one quality issue you’re having in the smaller ones that you’ve kind of got those ring fenced. And historically, I don’t think you’ve had many of these warranty programs. I mean do you see this at all changing kind of the whole in-source versus outsource dynamic? Or I mean, is this something that could permanently slow-down that move to larger blades, which I guess would mean fewer start-ups and transitions for TPI.
Bill Siwek: Yes, I don’t think it changes the outsource, in-source discussion, quite frankly. And the new product introduction has already slowed down. I mean, do you just have to listen to what our customers are saying publicly about new product introduction and the need to standardize, and industrialize and running these modularization of the turbine. So, we’re seeing that already. But I do not think it impacts the in-source versus outsource. If the market goes to where we think it needs – where the – where many think it’s going, there’s going to have to be a ton more capacity in the market over time. And I don’t think the OEMs are going to want to absorb – are going to have the appetite to spend that capital on blade plants, quite frankly, or another manufacturing facilities.
So no, I don’t think it impacts it. I think to your point, we have not had significant warranty issues in the past. We see this as a unique event for us. And we will learn from it and continue to improve what we do and work very closely with our customers. One of the important things that we’ve talked about in the past is collaborating more closely and deeper upfront with our customers. So that we can minimize the potential for risk areas in the manufacturing process and in turbine design. And our customers recognize that. They are engaging with us more deeply and earlier. And I think that will help in the long run with minimizing the types of risky manufacturing operations that we see at points in time today.
