Rich Lavin - President and CEO
Chad Utrup - CFO
Manish Somaiya - Citigroup
Commercial Vehicle Group, Inc. (CVGI) CITI 2013 US and European Industrials Conference September 17, 2013 3:30 PM ET
Okay. Thanks Manish. It’s good to be here this afternoon. I am – as Manish mentioned I joined CVG at the very end of May. So I’ve got about three and half months with the company. I worked for Caterpillar for 29 years and a good part of my career was spent living and working in Asia. I knew CVG when I was running the global construction business at Caterpillar, and so after I retired when I was approached the opportunity to go to work for CVG, I really jumped at it because CVG and Caterpillar had a reputation as a reliable trusted supplier and I think in the short time of being with the company, I have seen that that reputation has been well earned. So I am pleased to be here and I am pleased to be with CVG as well.
I am going to start my presentation just with a look at the organization. As you know, we announced a change in organization about six weeks ago, and we went from what I would characterize as a very product-focused organization where our group presidents were responsible for products to an organization where our group presidents now have global market accountability. We’ve organized around construction and ag, truck and bus and also the aftermarket. So the three presidents with responsibility for our global markets or global customers are really expected to take a customer-backed view of their opportunities and make sure that we have product plans in place to meet and exceed our customers’ expectations going forward.
A couple more comments about the organization once I get into the presentation. We’ve got a little bit of [matrix] [ph] challenge in the organization as well because we have MDs in Europe and in China. Those leaders are working very closely with the presidents on their plans for markets and customers in their part of the world and they’re really going to be on point in driving their strategies going forward. And Chad, on the service side of the organization, of course, has been with CVG for 15 years, about 13 years in position as CFO. So if there are any tough questions, you know who is going to field them.
Just a couple of slides about CVG. As I mentioned, I’ve only been with CVG for about three months. But I think there were a couple of things that have jumped out of me regarding how the company is positioned and how we need to be going forward at least over the short term to drive the value, at the top of the chart, that we are committed to drive for our customers and also for our shareholders.
On the right hand side, we say we’re going to be opportunistic. I mean this is a company that’s been built through M&A, about 18 deals over 15 years. So they have been pretty aggressive in the deal space. We’re going to continue to be focused on M&A but it’s going to be very, as I mentioned, opportunistic which is just another way of saying I think it’s got to be directly tied to our strategy which over the past of couple years and going forward will be focused on diversification – diversification of our product line, diversification of our customer base and also diversification of our geographic reach.
We’ve got a very strong values-based culture at CVG, creativity, innovation, integrity, teamwork I think is a very important for those to be called out as expectations for the people in the company because at the end of the day it’s about serving each other even as we are serving our customers.
We’re going to be focused on execution. I think we want to really gain a reputation, enhance our reputation as an execution company – a company that delivers on its commitments, a company that get things done when and how they say that they’re going to get it done, and finally we’re going to be global. I’ve got a chart in here that shows our current global footprint. I will be happy to take questions during the Q&A period about how we’re going to drive our global business going forward. But the opportunity in large part for CVG going forward is going to be outside of North America. It’s really going to be in Asia and principally it’s going to be in China.
Just to look at our product line, for those of you who are familiar with the company, I think you know our product lines pretty well. But we’ve positioned ourselves as a supplier of integrated system solutions for the global commercial vehicle market. And you see the breakup of our products along seating, electrical trim, cab structures and panels, and mirrors, wipers and controls and at the bottom is the percentage breakup by revenue of our product line. So you can see we’re heavily weighted in seating where we are selling five brands in different markets around the world. I’ve got a chart later on which really shows how we are positioning our seating product at distinct value points to make sure that we are covering as much of that opportunity as we possibly can.
I think one of the opportunities we have in the new organization, one of the things I have challenged our group presidents with is to ensure that we are selling the CVG house. In other words, we are not just the seat company. We need to set the expectation that with every customer, John Deere for example, where we are selling wiring harnesses, we’re going to be very aggressive in working with them to sell the entire line of products. That's where I see in North America the short-term opportunity for organic growth and we’ve got longer-term that type of growth opportunity in broadly serving our customers outside of North America and especially in China.
A look at our global footprint, we’ve got manufacturing facilities located in 12 states in the United States, 15 sites in 12 states. And then we are in seven cities outside of the United States. We’ve got a manufacturing operation located in Beijing, really up a heavy assembly operation, our China office is located in Shanghai. I am going to be visiting there in the fourth quarter this year. I am looking forward to getting back to China, looking forward to seeing the CVG presence there. But I am really encouraged, excited about what we’ve established in that part of the world and really excited about investigating, looking deeply into our opportunities to expand our presence in the China market.
Just a slide on strategic initiatives and outcomes that we’re going to drive, first of all, diversification at the top. We’re a product company. We design, manufacture and sell products. And so we’ve got to be driving excellence in terms of product design based upon the voice of the customer, product designs that will deliver real value for customers, differentiate us from competition and create the opportunity for us to drive price consistent with value in the marketplace. Expanding our customer reach, in the process expanding what we are selling to the customers that we are serving today. I mentioned Deere.
On the construction side of the business, I think we are limited in the products that we are selling. Construction today represents a significant part of our total sales but the opportunity there to sell beyond single products – harnesses for Deere, for example I think is tremendous. I mentioned the geographic expansion of our business with a really sharp focus on Asia and also the markets that we serve.
I mentioned product development. Again, we’re a product company. We’ve got to be excellent at that. We’ve got to understand the voice of the customer and we’ve got to be able to translate that into differentiated products that we can sell at a premium in the marketplace. I just mentioned world-class talent. In the short time I have been with CVG I’ve got to say I have been very impressed with the passion and the competencies of the people that I have come in contact with. I think we’ve done a very good job of hiring talent but now as we look outside of the United States to grow, we really got to have a sharp eye for talent and we’ve got to do a good job of hiring, training and retaining that talent going forward. That’s going to be the foundation of our strategy.
And finally, operational excellence. As we’re designing products that meet the expectations of our customers, we’ve got to make sure that we are excellent in manufacturing, efficient, effective, productive and able to deliver cost-effective products to customers on time.
As I mentioned the new organization is all about sharpening our customer focus. But the old organization was really focused on products. Now products are going to be a certain piece of our strategy but our designs are going to be based upon a deep understanding of customer needs, customer expectations, what they value, translate it into our design process. And so it’s going to be a global organization and each of my presidents will have all the leverage they need within their respective organizations to effect their results going forward. So Pat Miller, for example, in truck and bus, will have everything from product design to product manufacturing, the sales, the service, everything he needs to drive the number he commits to annually in terms of sales and profitability.
And importantly each customer will have really a single path back to CVG. In the short term, I do know the company I have heard from a couple customers that as we sold then different products, they weren’t quite sure who in the organization they should turn to if they had questions or if they had service issues. Today they’ve got a single president of single organization to turn to if they are a construction company, an ag company, a truck company or a bus company.
A look at our diversification, as I mentioned it’s going to be a key part of our strategy going forward and we are going to continue to drive the global diversification. These are numbers from 2012 and you see the breakup heavily weighted in North America 79%, Europe 12% and Asia 9%. In 2014, based on our current projection of sales by region, those numbers are going to be 70%, 15% and 15%. I don't have any explicit targets in terms of the geographic breakup of our business. But what I expect is as we really leverage the opportunities to outside of the US, especially in Asia, as we get our global presidents focused on those opportunities, the balance of sales will move from North America to outside of the US much more heavily weighted to Asian. Again I don't have a specific target but I'm confident that if we are really driving the global focus for our businesses, this balance is going to change as it’s going to be heavily balanced in Asia’s direction.
End market diversification, again, you can see the heavy weighting in the top two markets, heavy truck and construction. Heavy truck has been our sweet spot for a long period of time, that’s mostly North America. Construction is really – as I mentioned kind of a single product relationship by customer within construction. So our opportunity in construction is to really expand what we are selling to construction customers and as we do that to increase the weighted construction in the breakup of sales across the company.
Aftermarket and service, this is an area that Timo Haatanen is going to be sharply focused on. It’s the highest profit part our business and we feel like we've got great opportunity to grow the aftermarket and service end of the business. As indicated right now, it represents only 13% of our sales, we’ve got a chance, I think, to drive that number much higher.
And then customer diversification, again you can see the weighting between truck, PACCAR, Volvo/Mack, Daimler and Navistar and construction as we get more diverse in our product designs, more diverse in our product offerings, more global, I would say, in our outlook in terms of how we are trying to drive our business, the breakup of our customer set will certainly change. In construction, as an example, we are serving very well the big four or big five on a global basis. But when you think about the Koreans, you think about the Japanese, you think about the Chinese competitors, we’re now taking their businesses outside of China and other parts of the world, the customers that we are serving have to got to change, and at the same time as we begin to serve, for example, Chinese customers, we’ve got to have a strong sales to what Chinese customers are demanding in terms of the product we’re designing and manufacturing, we’ve got to have a strong voice of customer to make sure that we are well-informed in meeting their needs.
Couple of examples of technology leadership in the electrical space, one is hybrid power system cables and the other is molded wire harnesses. You’ve got to need to know a lot about these products. The point is that we need to leverage our design resources much more heavily to create differentiated products and intellectual property for CVG. Long term I think that's how we’re going to compete, that’s how we’re going to create differentiation and that’s how we’re going to drive price.
In the seat space, which is a big part of our total sales as you know, I think the company has done a very good job over time in creating different designs to meet different customer expectations at different price points giving us the opportunity to compete for a much larger part of the total truck seat business. This is showing – in our highway but the same chart can be created I think in the construction space.
That concludes my presentation. I will turn over to Chad for a financial review and look forward to the Q&A session. Thanks.
Thanks Rich. I have a few slides here. Really what I wanted to do is just hit some touch points on our recent trends and our historical view from a revenue and operating income perspective and then circle back with just kind of some summary conclusions, touch on our capital structure. So I will be pretty brief but I wanted to leave you with some takeaways in terms of how we’re looking at, not only where we have been and where we are, but really where we’re going and what we’re focused on.
So from a revenue trend perspective, this is not new from most of you but revenue trends for our space, for our company has mostly been negative since the middle of 2012. There was an uptick in Q2 this past quarter, mostly driven by a moderate recovery in the truck and construction OEM side of the business. But as you look at this, the takeaway -- I am going to flip to the next slide here – the takeaway is really driven by something that we’re trying to curve, we’re trying to mitigate with the strategy. And the downward trend that we've seen mostly since the middle of last year or the last 12 months has been driven by the OEM side of the business, when the OEM orders decline, when OEM construction orders decline, our revenues are heavily impacted.
So what we’re trying to do and I think what Rich touched on a little bit ago is the heavy focus on the growth outside of just the North American classed based OEM market and growth into the aftermarket and service side of the business so that we can continue to diversify and mitigate away from the impacts that we are seeing from the OEM side of the business. So again truck and construction end market build levels have declined. OEM truck this past quarter from a revenue perspective for us was down 24% from a year ago and construction sales for us were down 31% from a year ago.
From a profit performance standpoint, the upward trend we have seen in the last few quarters, and I am going to flip to the next slide here in a minute which shows really a much broader historical horizon over our operating performance. But we have seen some upward trend in the recent quarters. Our focus is to continue that trend obviously, not only focused on the top line but focused on the bottom line. So we do have some positive momentum but the key takeaway here is that we’re still well short even in this recent quarter. We’re still well short of where we want and we believe our targets for operating income margins should be.
And so when you look at – on the next slide here, when you look at our historical -- this is a quarter-by-quarter graphic going back to 2006, we often get the question of what can you do from your peak levels of 2006? So I think this kind of puts it in perspective what I was mentioning earlier, we’re currently heavily dependent on the OEM side of the business and what our focus is from a top line growth and diversification standpoint is, is to reduce that level of dependence so that we can mitigate the swings that we see in the profitability side of things. We’re constantly going to focus on margin improvement, cost improvement and capacity and fixed cost realignment. But there is an aspect of the top line diversification that comes into play, especially when you look at something like this which clearly highlights the dependence on the OEM side of the business as you look at revenue and operating income.
So when you look at the 2006 timeframe that is our peak historical margin era. We were in the 11% to 11.5% operating income margin level. As the downturn hit through 2008-2009, we all know what happened with margins, not only with us but with most of everybody in the industry. And then you look at the period from 2009 through really the first half of 2012 where we had 13 quarters of consecutive operating income improvement. We did have a slip as we talked about a little bit ago from where we were through the first half of 2012 through the second quarter of 2013 revenues have obviously declined impacting our margin. But we have seen some recent momentum in the last few quarters, so which is the point and the takeaway for the message today. So really building off of that 2009 and 2012 taking a look at our cost structure and diversifying the top line to continue to build off of what we've seen in the last few quarters.
From a capital structure standpoint, as of the last quarter we got about $65 million in cash. As most of you know, our notes -- 7.875% notes are not due until 2019. We’ve put those in place in 2011 $250 million. We do have a $40 million revolver, about $37.2 million availability which leaves us with a little over $100 million of liquidity. So from a capital standpoint, we’re very comfortable with where we said, we’ve got a lot of flexibility and headroom to focus on the strategic initiatives and perhaps as opportunities M&A opportunities come to us as Rich mentioned. So from a capital structure standpoint, very comfortable where we are today.
And lastly, just a few summary points. The top line has trended with the markets. We’re very OEM dependent. We have mitigated that a little bit over time. Our focus from this point forward is clearly going to be to mitigate that further, not that we want to get out of the OEM side of business by any stretch of the imagination but mitigating the impact that just pure market swings can have on us. So new business, as you have seen us announced over the last two years, we've announced about $75 million or so of new business and also as Rich mentioned a heavy focus from our side on the aftermarket OES side of the business.
Margin trend, we’re focused on industry leadership, building off of the recent trends, not only the 13 quarters that we saw from ‘09 through the first half of ‘12 but even the recent few quarters through second quarter of 2013. So we are focused on industry leadership there. Again we’ve got a strong capital structure to support all of the initiatives, strategic and M&A. And lastly, another point, just on the industry leadership, it’s something that we’re focused on heavily internally as a management team and as a company. And there is really about five metrics that, that -- we actually measure a number of metrics but there’s five from an industry leadership perspective that we’re heavily focused on. And this is in a comparison of what we determine as our peer groups in our industry and that’s operating margin percentage RONA/ROIC, we obviously want to take a look at leverage perspective and then of course, total shareholder return. So just a little bit of a flavor for how we view industry leadership and where we want to take our position within our peer group in the industry.
And Manish, that kind of wraps up at least the presentation. So if you have any questions.
Manish Somaiya - Citigroup
So why don’t I kick it off? Thanks Rich and Chad for the informative presentation and discussion thus far. Let me start off with a big picture question. Maybe if you can touch on current business environment what you're seeing out there and then how should we think about ’14?
I’m a little reluctant to talk about ’14 because we haven’t put anything out there publicly yet. What we talked about recently is kind of where we look -- where we see the back half of 2013, Manish, from both a truck and a construction perspective. We believe the truck market as it is today is kind of running in that 250,000 unit run rate from a North American class 8 perspective. We kind of feel that, that’s the underlying demand level. So we believe truck market for this year and currently is kind of running at what we see as a sustainable level. And from a construction standpoint, clearly there has been an inventory build-up that has been, we believe -- been depleting over the last two to three, maybe even four quarters. And so we’re optimistic that, that inventory reduction is nearing its end. But what that means in terms of global construction build-up and production levels going into 2014 and beyond is yet to be seen. Our current view right now is heavily focused on the organic growth side of the business and really not planning or banking on any type of market uptick as we look at not only the balance of ‘13 but into ’14.
Manish Somaiya - Citigroup
And just specifically focusing on the construction market, can you talk about any sort of potential signs of [inaudible] in the US construction market or in China’s construction market?
I think construction in the US in 2014 is probably going to be up modestly and I think it’s going to be somewhat improved environment. Caterpillar in its quarterly results call, I think, was cautiously optimistic about 2014. So we expect to see a little bit of growth in the US. One thing I would ask you to think about in terms of our opportunity to grow American construction is not necessarily the growth that we are expecting to see in the industry but I would say the very slow share bases we’re competing from in that industry, I think we’ve got tremendous opportunity to get a larger share of what’s going to be manufactured in 2014.
Outside of the US, the GDP situation in Europe is not very exciting and frankly the industry outlook kind of follows that; we are expecting a little bit of an upturn in construction but not much. Asia, I think is where the excitement is in construction. China continues to be where the excitement is in construction. The GDP rate in China, I don’t think, is going to dip below 7.5% and I think it’s kind of the tipping point for the Chinese government. It’s still all about urbanization, it’s still all about job creation in China and 7.5% GDP growth seems to be the level at which they got to continue to grow to create the jobs they need to accommodate the move to urban China. But again we are coming from a relatively low share point in serving the construction industry in China. So we expect to see better growth in China in 2014, especially I think as some of the OEMs deal with the inventory overhang situation. But we’re looking forward also to growing our share among the customers we serve even as the industry grows in 2014.
Manish Somaiya - Citigroup
Just sticking on China, maybe if you can touch on status of new business with Foton and what the opportunities are near to intermediate term?
Sure. I think the Foton business, we've announced over the last couple of years a few pieces of new business for China. Foton is obviously one of those, JAC, Hino and UD. So those are four that we've announced recently, or recently being the last couple years. The Foton piece is probably the largest piece which was -- our expectation was at peak it was probably around $30 million to $35 million in revenue for us. That program was based on new models being introduced, Manish, and as we’ve said in the last few conference calls at least the start of production for those models has just been pushed back. So we are providing product today and our expectation is that, that value will continue to grow and ramp up through 2014, not to the peak levels of the $30 million to $35 million but start to ramp. We initially expected that to ramp up the end of 2012. And so we’re about a year behind from where we thought that would be.
So just a quick update on Foton there and then as Rich said, I think the biggest opportunity and the thing that we’re focused on in China specifically, I just mentioned four truck customers, there is also a significant amount of new vehicles on the construction side and truck side built in, in China and Asia markets specifically. And the opportunity we have there for organic growth regardless, if the market goes, stays flat, goes down 10%, it’s still three, four, in some cases maybe even five times the size of the market here. So our opportunities in that region of the world are significant, and the Foton JAC, UD, Hino are just a few examples of recent wins and it’s pretty exciting.
Manish Somaiya - Citigroup
And I guess, Rich, this kind of takes me back to the initial comments you made upfront in the presentation about diversification and really sort of having a larger Asian footprint in particular. Maybe if you can just touch on what kind of bench strength you might need as you look to grow in that region and just more broadly expand outside the US?
We’re in the process really of putting our plans in place to move ahead with our Asian business, firstly in China. But if you think about the special needs, I think, of the Chinese customer, we’ve got to have design resources on the ground in China who can translate the voice of customer into competitive designs for the products we’re going to be offering in China. I think one of the things I learned on the construction side of the business is that China is not a one-size-fits-all market. And so in Caterpillar we came up with different product plans, different products offered at different price points to serve the needs of the Chinese customers, and I think that’s exactly what we’ve got to be doing in China with the CVG products.
So heavy focus I think on design engineers but also heavy focus on go-to-market resources, including sales reps and sales engineers. Chad mentioned the size of the China market. We’ve got to be very selective I think on the customers we’re going to be pursuing. Certainly it’s going to be all the multinationals doing business in China today, we’re in touch with them, we are selling to them today to a degree. But we’ve also got to be in contact with, building relationships with the Koreans, the Japanese and the top-tier Chinese. So the resource needs for us, I think, in China, applies across Asia but certainly in China on the design side and on the sales coverage side.
Manish Somaiya - Citigroup
I also wanted to touch on India. Clearly India has been on the news quite a bit about some of the challenges they’re facing. So maybe if you can just kind of update us on some of the recent acquisitions you’ve had in that market?
We made an acquisition – was it end of 2012 – November 2012. It’s really a seat manufacturer focused on the bus market in India. A modest acquisition in terms of size but a starting point for us in terms of design and manufacturing in India. So we are going to be talking about plans as we get into the fourth quarter this year. We are taking that business forward in 2014. Despite some of the problems that we have seen in India economically over the past 12, 18, 24 months, I still remain quite optimistic on India. So even though I think the growth prospects in India are not quite as bright as they are in China, it’s an area of Asia where we’ve got to be invested, we’ve got to be competing and we’ve got to be building a product line in India to compete there just as we are going to be building a product line to compete in China.
We’re going to cross sell between regions as much as we can look. Okay, product design in the US, sold in China, sold in India, if there is a market for those products. And the same with products designed in China or designed in India but we are going to be investing in our manufacturing footprint and also in design and sales coverage in India as we ramp up the China.
Manish Somaiya - Citigroup
I guess by the same measures can we talk about the Brazil, maybe just touch on some of the opportunities that might be available to CVGI?
As Rich mentioned, the opportunities that we see in China and India, Brazil is a place that we are interested in. We talked about it for a number of years and we do have global customers and multinationals producing a product that we can support in Brazil. The thing for us as we look at opportunities it's not an area or a region that we will shy away from but when we prioritize our resources on our capital, on our investments and where we believe the biggest return for shareholders and the biggest return for the company are, it's clearly in the China and India markets. So and Europe it falls into that same scenario, Manish. Europe is somewhere that we want to be, Brazil is somewhere that we want to be, but as you look at the short-term focus and allocation of resources and capital, and you go through a prioritization process, it's leaps and bounds China and India deserve the focus for what we believe is the return.
Manish Somaiya - Citigroup
I want to see if anyone in the audience has any questions before I go ahead with more.
On your current book of aftermarket business, can you describe that and what (inaudible) you’re seeing there? And then going forward how are you going to in terms of M&A, where you are going to stop from that business?
What we’ve seen from the aftermarket indexes that we follow is kind of a flat aftermarket purchasing, I believe if you look over the last four quarters, if memory serves, there was a dip in the fourth quarter and nothing too exciting from an index perspective. What we've actually seen is some decent growth out of our aftermarket side of the business. It's not a significant piece of our business today. That’s obviously one of the things that we want to change. So when you look at what we call our aftermarket and OES side of the business which is 12% or so of our total business, it's roughly a 50:50 aftermarket and 50% OEM. So when you look through aftermarket for us today on a global basis it’s in the 5% to 6% range of our sales. So we believe we have a lot of opportunity to improve that and the most exciting thing about the aftermarket side of the business is the margin that, that comes with it.
That’s kind of what we’ve seen from an index perspective and we have seen positive momentum. You wouldn’t quite see it in the CVG picture as a whole just because it's not a large piece of the pie. But we have seen some positive movement. We’ve dedicated quite a bit of resources and time to it in the last few years and we have seen some success.
To the M&A part of your question, I think that deal may be the best way to advance our footprint in the aftermarket. But what it really challenged the Timo to do is to take a look at if it meets the aftermarket customer in a product sense. I mean we could design solutions to broaden our product reach to include the aftermarket. My own feeling is this, there are different expectations, there are different buying criteria for customers in the aftermarket versus new equipment buyers. So we need to understand, I think, upfront what we can achieve ourselves through design and manufacture of new aftermarket products. But that’s really what would drive our focus on M&A as well. Can we get a product line that especially serves the needs of aftermarket customers and acceptable level of return for the company? I think the biggest opportunity we have to move ahead in the aftermarket is in the scope of our sales coverage. We have a sales force – contracted sales force in the field right now that’s doing, I think, a reasonable job in North America covering the aftermarket. But as Chad said, the sense is there is more there. So we may have to be investing in coverage resources and certainly driving (inaudible) much more professional approach to sales in that part of our business.
And aftermarket outside of the US today is largely an untapped opportunity. And so Timo as the global leader of that business is going to be challenged to define the opportunity in China, Europe and other parts of Asia and put a plan together to take advantage of what is a developing opportunity, because as equipment ages obviously in China, we’ve been selling products for some time the aftermarket opportunity is going to be increasing year by year.
Manish Somaiya - Citigroup
I think as we have about two minutes, I am going to ask the last question. Is there a way to think about making the business less cyclical? Obviously now we saw on the chart of Chad that he showed earlier, and clearly the business is still very reliant on OEM, clearly the aftermarket focus would help, the geographic focus would help but I mean what else can be done to make the business less cyclical and not have the severe sort of downturns as it relates to your company and the financials?
It’s a good question. I think if you step back, I think my broad answer would be diversification, that's really what it is. So when we look at our top two markets being the class 8 and really OEM truck and in the construction side of the business, and if we look back – if you allow me to look back, say, 10, 12 years ago we were significantly more weighted on the truck side. So at one point back when I started with the company we were probably 95% truck – OEM truck class 8. And so diversification I think has pushed us along that way. We’ve obviously grown significantly, but it really gets down to getting into other regions of the market that may be truck but it may be countercyclical to the North American class 8 market. So aside from general economic swings which, if they are global there is not much you can do to take cyclicality out of it, it’s going to be aftermarket, the OES and the focus on things like bus and agriculture and military and those key five or six end markets that are in the commercial vehicle space globally, if we can somehow get closer to balancing those out, not further from what we are today, I think that goes probably the furthest objective than anything to taking cyclicality out.
Manish Somaiya - Citigroup
With that, thank you so much. Thank you, Rich, Chad, John. Thanks for coming.
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