Good day, and welcome to the Aptiv Q2 2023 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Jane Wu, Vice President of Investor Relations and Corporate Development. Please go ahead.

Thank you, Elaine. Good morning, and thank you for joining Aptiv's Second Quarter 2023 Earnings Conference Call. The press release and related tables, along with the slide presentation, can be found on the Investor Relations portion of our website at aptiv.com. Today's review of our financials exclude amortization, restructuring, and other special items and will address the continuing operations of Aptiv. The reconciliations between GAAP and non-GAAP measures for our second quarter financials, as well as our full year 2023 outlook are included at the back of the slide presentation and the earnings press release. During today's call, we will be providing certain forward-looking information that reflects Aptiv's current view of future financial performance and may be materially different for reasons that we cite in our Form 10-K and other SEC filings. Joining us today will be Kevin Clark, Aptiv's Chairman and CEO; and Joe Massaro, CFO and Senior Vice President of Business Operations. Kevin will provide a strategic update on the business, and Joe will cover the financial results in more detail before we open the call to Q&A. With that, I'd like to turn the call over to Kevin Clark.

Thank you, Jane, and thanks, everyone, for joining us this morning. Beginning on Slide 3. We delivered a record quarter, demonstrating outperformance in an improving supply chain environment. Touching on a few of the highlights. Revenue increased 25% to $5.2 billion, a new record for quarterly revenue, representing 10 points of growth over underlying vehicle production, driven by strong demand across our portfolio as well as across all geographic regions. Revenues in our active safety and high-voltage electrification product line increased almost 50%, underscoring the strength of our safe, green, and connected product portfolio. EBITDA and operating income totaled a record $695 million and $530 million, respectively, reflecting solid flows on volume growth and fewer supply chain disruptions. Partially offset by unfavorable foreign exchange rates, commodity prices, and ongoing material and labor inflation. New business bookings totaled $6.1 billion, further validating our industry-leading portfolio, the strength of our customer relationships, and our ability to execute flawlessly in a dynamic environment. Turning to Slide 4. Our first half performance substantially in line with our expectations. New business bookings totaled over $20 billion, driven by customer awards for our SBA compute and software, high-voltage electrification, user experience, and active safety solutions. Record revenue, representing 20% growth, 8 points over underlying vehicle production, in line with our long-term framework, record EBITDA and operating income as well as significant year-over-year margin expansion. The result of strong volume growth and increased operating efficiencies, partially offset by the headwinds I mentioned on the prior slide. And we're ahead of plan for both Wind River and Intercable Automotive solutions with both companies experiencing an uptick in commercial engagements and customer awards. Although supply chain issues persist we experienced a sequential improvement in the supply of semiconductors resulting in more stable vehicle production schedules. From a macro and…

Thanks, Kevin, and good morning, everyone. Starting on Slide 11. As Kevin highlighted, Aptiv reported another quarter of strong financial results, reflecting robust execution across both segments and continued improvement in operating performance. Revenues were up 25% to $5.2 billion or 10% above underlying vehicle production, excluding the impact of acquisitions. With outgrowth driven in part by strength in our ASUX segment, particularly in active safety as well as continued traction in our high-voltage and commercial vehicle product lines. Adjusted EBITDA and operating income were $695 million and $530 million, respectively, reflecting flow-through on increased volumes of approximately 30%, continued progress on our ongoing performance initiatives, including a $70 million improvement in supply chain disruption costs from last year, and margin headwinds of 90 basis points from FX and commodities primarily due to the stronger Mexican peso and weaker Chinese RMB. Earnings per share in the quarter were $1.25, an increase of $1.03 from the prior year, driven by higher operating income, which more than offset the negative FX and commodity impact. Operating cash was $535 million, which was $440 million above the same period last year, primarily driven by higher earnings and reduced working capital investment during the quarter. Capital expenditures were $222 million. Looking at revenues in more detail on Slide 12. The Revenue in the second quarter was a record $5.2 billion, representing adjusted growth of 25%. Growth was broad-based across regions and segments and our recent acquisitions added $176 million of revenue in the quarter. Net price and commodities were positive, more than offsetting the FX impact on revenue. From a regional perspective, North American revenues were up 19%, 4% above market, reflecting program timing at several customers with increased launch activity expected in the second half of the year. In Europe, revenues increased by 28%,…

Thanks, Joe. I'll wrap up on Slide 17 before opening the line for questions. 2023 is off to a good start with record first half revenues, EBITDA and operating income, and strong margin expansion. We maintained our momentum on new business awards for optimized full-system solutions that deliver increased performance at lower cost to our customers. Our outlook for industry volumes has increased and easing supply constraints have led to fewer production disruptions and improved operating efficiencies. And we continue to focus on optimizing our cost structure to further enhance our operational resiliency. Our culture of innovation and commitment to keeping our customers connected is clearly translating into strong commercial momentum, which gives us confidence in our ability to execute our strategy, maintain our track record of performance and deliver sustainable value creation for our shareholders. Operator, let's now open the line for questions.

[Operator Instructions]. We will take our first question from John Murphy from Bank of America. Please go ahead.

Good morning, guys. Thanks for all the information this morning. Just a simple question first on ASUX. It seems like you suddenly just kind of got into escape velocity here. And I'm just curious if that's kind of a fair statement, particularly with these margins at 9%, they're weigh down by some other factors. So, I mean, on a normalized basis, they're actually reapproaching 10%. In the ramp-up of some of these growth segments, I mean, is this where we should be thinking sort of the travel rate for margins? Or is there something else going on in the quarter other than just this kind of escape velocity being reached?

Yes. John, it's -- I'll start and Joe certainly should add to it. Clearly, the environment for semiconductors and supply chain associated with semiconductors has improved. I think as an industry with the semiconductor manufacturers, we've been working over the last couple of years to enhance visibility to enhance alternatives or choices. And with the slowdown in some of the consumer electronics markets, it certainly freed up incremental supply. As a result, it's made our supply chain much more efficient, which results in lower cost from a manufacturing standpoint as well as from a freight and other standpoint, that's reflected in our numbers to date. And then we would expect that to continue into the -- obviously, into the back half of the year as we lower -- Sorry, it sounds like we had a little feedback. As we have lower disruption costs, more operating efficiency, we are able to operate more efficiently and then continue into 2024 and beyond.

Okay. And then just one follow-up on Intercable using that sort of as a test case for some of these acquisitions that you're making. I mean it sounds like you can't sell this or explain it well enough at how the -- or the expansion opportunity is in front of you for Intercable. I'm just curious in the current base of customers, and the $1 billion that's been won year-to-date or booked year-to-date, are we still looking at a European centric revenue base as far as the customers and there's just extreme opportunity in other regions and with other automakers outside of the European automakers. I'm just trying to understand where this is ultimately going to go.

Yes. I make sure I understand the question. I think today, the bulk of their revenues are related to European unbalanced programs. But as we talked about, previously. One of the reasons that we acquired Intercable is in addition to their technical capabilities and their broad portfolio a view that we could easily provide them with entrees into the North America market, which we've done to date, as I mentioned in our prepared comments, we're already producing products in one of Aptiv's existing manufacturing facilities in Mexico. Then we'll be delivering product to a North American OEM starting this quarter, and we see significant opportunities with the other North American OEMs. And then similarly, with China, although they have manufacturing capabilities in China, just given our knowledge of the market and our experience there, we feel as though that we -- we're a great leverage point for them to sell their product into that market as well. So, as I mentioned, their funnel for bookings opportunities is well over $2 billion. So, the opportunities are really significant with Intercable. They have a great portfolio. They have an even stronger management team. So, we're really excited about the acquisition.

Great. Thank you, very much.

We will take our next question from Itay Michaeli from Citi. Please go ahead.

Great. Thanks, and good morning everybody. Just two questions for me. Just first, I was hoping you could just walk through the how you think about the H2 versus H1 margin bridge embedded in your guidance? And then just secondly, I didn't notice restructuring expenses kind of moved up in Q2. I think you raised your outlook there. Maybe just hopefully you could elaborate on where you're seeing these restructuring opportunities? And how much more of the lever that could be going forward for margin expansion?

Yes. Let me start with that and then I go to H1, H2 Itay. I would say that, that is -- we've talked about that, not necessarily in the context of the restructured dollars, but things like pivoting engineering to best-cost countries those types of activities, it's obviously what you're seeing. And as we laid out at Investor Day, particularly with engineering, that's really the established margin guidance into 2025, right? So, I would think of that as us taking the necessary actions over time to continue to move toward that commitment versus something incremental. From a bridge perspective, from an H1 to H2, I'm not going to give a lot of detail, but you're going to see a couple of things. There's a slight volume uptick, a little less than $100 million. That sort of flows at call it, 30% on volume. FX will be better. We had about -- be better by about $30 million. We don't expect that these current rates to have as much transaction hits as we did in the first half as we adjusted down. And then you've got, what I'll call, performance initiatives as well as some inflation recovery, that's going to be over $100 million. That's really the big bucket. Some of that's coming out of disruption costs. The other, as I noted, is going to be a continued march on these performance initiatives that we've talked about, and they'll continue to improve over the back half of the year.

Perfect. I appreciate all that detail. Thank you.

We will now move to Rod Lache from Wolfe Research. Please go ahead.

Good morning, everybody. Had to just ask you kind of a couple of big picture things. One is in the margin bridge that you presented from 2022 to 2025 at your Investor Day, you had a bucket of $1.7 billion. It was -- I think you called it performance. It was elimination of COVID costs, part of it was some supplier costs. Can you just update us on where that bucket stands now? And what proportion of that $1.7 billion you think we will actually see in 2023?

Yes, Rod, it's Joe. Let me start. So, remember that Bucket big -- that was a '22 to '25 bridge, right? So, you had -- the biggest individual item in that $1.7 billion is about over $300 million, call it, $330 million to $350 million of supply chain disruption costs. We expected a lot of that to come out this year. We had $130 million in the original guide. It's improved now, maybe around $160 million coming out this year. The balance will come out next year. The remaining is just sort of what I'll call sort of those annual material and manufacturing improvements for the three years, '23, '24, '25. I would say you could sort of take those across each of the years. They're a little back-end loaded. They grow into '24 and '25. But for the most part, we're on track. It's really what you're seeing sort of come through in the performance bridges as we've talked, just even over the past -- this past quarter, right, $70 million improvement in supply chain disruption costs alone. So, I might say we're tracking in line with those expectations.

Thanks, for that. Okay. And just switching gears. A few western companies seem to have lately realized that the EV forms that they were working on were just too expensive and we've already seen Volkswagen reach out to Xiaoping to use their platform and seemingly, there's a few other discussions in the industry about using Chinese platforms. So, I'm just wondering from Aptiv's perspective, how you -- how that affects you. You did mention again on the call that you've been working with Volkswagen on the architecture of the future. So, would you be agnostic to that? Or is there some -- are there some implications for you if that is something that continues?

Yes, Rod, maybe I'll start with it. Listen, I think as we've talked about in the past, our overall outlook for penetration of battery electric vehicles and electrification overall has been -- I'd say, a bit on the conservative side relative to kind of industry perspective. So that has been our underlying perspective and a significant amount of that perspective is shaped on costs and an understanding of our OEM customers and sensitivity to cost and sensitivity to the cost of new technologies. So that's one. Two, just given the breadth of our product portfolio, given our full system approach to high-voltage electrification in this particular case, we have an opportunity to present our customers with a solution that is much lower cost than a traditional approach to battery electric vehicle architecture. And we've had examples, and we've talked about this in the past, where existing customers with existing -- both platforms have come to us, ask us to evaluate opportunities to optimize. And using our design capabilities and our portfolio of solutions, we've been able to reduce weight and mass by 25% to 30% and overall systems cost by 20% or more. So, given our historical capabilities given our strength, and from a product portfolio standpoint and our knowledge of vehicle architecture, we bring a lot to bear. I'd say the third piece as we've talked about this transition to battery electric vehicles, which in reality has been underway for a long period of time, and we've seen elements of fits and starts during that period. And we've been impacted by those fits and starts. We've been very selective as it relates to those customers, those platforms that we operate on. And we operate on those that we have a high level of confidence they'll be global. They're designed specifically for battery electric vehicle platforms; therefore, we'll get volume. And then from a contracting standpoint, we contract very carefully to the extent we see volume reductions, there are changes in pricing. So just given our past experience, again, as we've seen battery electric vehicles developed and the attempt to introduce some into the markets for the last several years, we've learned a lot of lessons, and we've lessons -- and we've established a really, I would say, a fairly conservative approach in terms of how do we manage risk, but at the same time, how do we develop a portfolio capability that provides our customers with lower cost solutions because we are big believers that over a period of time, you're going to continue to see significant penetration of electrification in our industry.

Great. That’s helpful. Thank you.

We will take our next question from Chris McNally from Evercore. Please go ahead.

Maybe I could start on the top line and macro. I know it gets kind of confusing, talking about North America with the upcoming UAW. So maybe Joe, we can focus in on Europe. Just some quick numbers on the 4% to 6% production, which is lower than the forecasters, I think we have something like 15%, 16% in the first half, so it implies down in the second half, obviously, inflation prices and cost of living, et cetera. But curious if your seeing anything specific. You obviously have a lot of insight there or is there's just a bit of conservatism built in for the next couple of months as schedules firm up?

Yes. Chris, it's a good place to start. I would say Q3, we're on production schedules, right? So, we're sort of locked in at this point with our customers, and we've obviously have been through July. Certainly, and as I said in my prepared remarks, certainly, to the extent there is more production in the back half of the year, I think we'd certainly benefit from it, remaining a little cautious, just given all the -- all the potential sort of macro ups and downs. It's still. The environment is not perfect. It's still a challenging environment. It's -- as Kevin said, it's much better. But yes, a little bit of caution and -- but more in the fourth quarter than in the third. And third, we're fairly locked in at this point on customer schedules.

That's really helpful. And if I could just follow up some numbers to Mark's comments on ASUX where the margin progression does seem like it's starting to take off. I think from your 8% to 9% a full year it sort of implies the back half roughly 10%. So, we usually because of some of the price issues we can sort of use it as like a base, and you have a 13.5% -- 13% to 13.5% target for '25. Given that I think that $190 million you just laid out in recovery, a lot of that will come in ASUX assuming that we have, okay, up small, low single-digit volumes next year that we can kind of split the difference, and start to think about '24 being somewhere in between the halfway point of that 10%, and let's call it 13.5%. Or is there anything that takes longer, why it would be more of a back-end loaded 13% plus margin in '25?

Yes. We--I'm not going to get into '24. It's a little too early in the year to do this. I think we remain confident in the '25 numbers for both total active as well as the segments. I would think it will be a steady march of continued volume growth in the key product lines, continued improvement. The price -- the team has done a good job on inflation recoveries. The environment, you could still have lumpy quarters between then and 2025 but feel like it's going to be a pretty steady march. Exactly where 2024 falls out, it's obviously something we've got to work out. But as we look at what's rolling on in that business, increase software content, those types of things still remain confident in that 2025 range.

Very helpful. Thank you.

We will take our next question from Adam Jonas from Morgan Stanley. Please go ahead.

Thanks, everybody. Kevin, I thought your answer to Rob answer, a question -- there's a bit of an echo. On the pulling back on the more conservative EV targets given your experience was really well done. I guess if I follow up on that if there was a scenario where your 2025, and then longer-term EVs assumptions were really dominated by Tesla and the Chinese, like I'm thinking 5% plus share of the EV market being those two regimes, would that be mix adverse for you? Or, Yes. I just kind of leave that open-ended, but just kind of think -- curious how you would approach that level of concentration because there may be some scenarios where there's a win or take most on these global platforms. And then I have a follow-up. Thanks.

Yes. I'm not going to talk about specific customers, Adam. I would say when you look at -- our revenue mix by region were pretty balanced between North America, Europe, and China growth opportunities in China, I'd say on a relative basis, are more significant. So, from a funnel standpoint, any bookings opportunity standpoint, that is an area that we're -- we're very focused on. Your comment on a winner take all. Our China high-voltage or BEV customers are very focused not only on the China market but increasingly regarding exports into other markets, which I think is a part of what you're alluding to. China customers from a system standpoint tend to be more clients to buy a full system solution for us -- from us. So, that tends to be a higher margin solution relative to selling component parts. So, I'm not sure if that's a net benefit for us or just a net neutral.

Okay, Kevin. And either Kevin or Joe, on Motional, can you give us the latest update on the capital need there in terms of cash consumption? And then what have you got left in the tank before we need to put more in the kitty? Thanks.

Yes. Yes. No, Adam, no changes on that front since the last couple of quarters. They have cash through or at least into Q2 of next year, and continue to make progress on the technical and commercial side of things. And as we've said previously, probably not the most receptive capital market at this point. Obviously, our partner, Hyundai, and ourselves are looking at it. I had to call it today, I'd say the partners fund another year of operations. I haven't made that decision yet, but that would be the most likely outcome. I think if we had to call it today, and they're going through about $500 million, $550 million of cash per year. So, it would be a split of that.

Thanks, Joe thanks, Kevin.

Thank you.

We will take our next question from Dan Levy from Barclays. Please go ahead.

Hi, good morning, and thank you, for taking the question. First, I wanted to just ask on commodities. It was -- you noted it was a headwind in the quarter. Maybe you could just provide us, Joe, with a bit more color on what the drag in the quarter was related to? And more broadly, what are you seeing in semis? Is there -- it sounds like the environment is getting better, it's more stable. Is there any path to relief on the cost pressures that you saw in recent years in semiconductors?

So, two distinct questions there. Let me take commodities. For us, commodities is still mainly copper, sort of nothing -- nothing's changed over the last couple of years of that. We copper, we're indexed to copper with our customers for the vast majority, 80% of our copper buy those prices get adjusted either quarterly or in some cases, semiannually, we have one customer or a large customer, we actually do monthly. So, all we're dealing with there is really the lag. How much copper do we have in at a certain price before we can pass it along or before we can, in this case, increase the prices. So, you wind up with that lag every once in a while. And copper tends to be more of a margin rate impact in margin dollars. As it relates to semi, we've obviously passed along the price increases that we have received to date. We've been sort of direct a chip goes up, we pass that cost along to our customers. We will continue to do that as if and when we see additional inflation coming in the year. I would tell you at this point, don't see any indications of chip prices coming down. And I think if you look at least in some of the chip folks that are -- have a large automotive presence, I think they've been sort of echoing that, at least the potential to hold or maybe even go up in some of their public comments. So, we remain vigilant. We would expect to pass additional price increases through to our customers, but certainly don't see any downside on those prices at this point.

Okay. Thank you. And then just a related question. If we zoom out and look at the last few years, obviously, the results have been dragged by all the material inflation headwinds, largely semiconductors. And I assume that when you're booking your bookings that pricing is based on the commodity or input cost outlook at that time, and obviously, it's progressed to be a bit tougher since then. So, what steps are you taking to ensure that -- as your backlog rolls on, as that becomes revenue and launches that you're going to get the appropriate pricing to ensure that the margins are in line with what you'd like them to be as opposed to being dragged maybe by an input cost outlook from a prior time.

So, Dan, we've talked about this a couple of times before. So, the renegotiation on price with customers covered in-process products, right, products that were being manufactured and things that were near launch, call it, within sort of 12 months plus to launch. For programs that are longer further out from a start date perspective, we have the opportunity, and we've done this even before semiconductors prices have gone up typically, before we really start to put capital on the ground, right, you got a sort of a two-year to three-year window before program start, there are various touch point customers around the economics of the program. Customers need that. We want that. Suppliers want that. Those tended historically to have been around volumes, right? If a program looks like it's going to be significantly higher in volume, the OEM wants to have a discussion, if it's going to be lower in volume, the supplier wants to have a discussion. Bond costs are historically part of those. So, as we get up to the point of starting production or putting capital to work to start production, we have a mechanism in place and the team does a good job at it to go back to customers on the overall economics of the program and bond costs are going to obviously now are included in that have always been but are now sort of at the top of the list, particularly with semiconductors of things that get discussed. And sorted out to get the program back to the original economic deal that was struck.

Dan, if I could add one comment? I think Joe did a great job explaining how we contract and how we operate with our customers. At the same time, right, the last couple of years, there's been a lot of focus on, one, keeping our employees safe and then more recently, obviously, just supply chain connectivity by keeping our customers connected, and as Joe articulated, passing on price increases to customers. At the same time, we've been very focused on how we continue to enhance our business model. So, from a supply chain standpoint, whether it's semiconductor chips or is resin or other inputs to what we manufacture. We've been very focused on how do we redesign the product and take out content, lower cost, how do we operate with our supply base more efficiently and more effectively to lower cost how do we operate with our customers from a supply chain standpoint as well to increase efficiency and take out cost. And then at the same time, when you look at inflation in around areas like labor, we continue to rotate where we do things, how do we increase our -- how do we move manufacturing, engineering, and other as well as how do we improve the productivity within the existing four walls so that we -- again, on an organic basis, we're driving down our cost of operating. So, it's really a two-pronged approach in terms of pushing incremental inflation onto our customers, while at the same time, trying to operate more efficiently, whether or not we're getting -- we're experiencing material inflation and other items.

Thank you, that was very helpful.

We will take our next question from Mark Delaney from Goldman Sachs. Please go ahead.

Good morning. Thank you for taking my question. You mentioned that Aptiv has been a little bit more conservative on its EV volume projections given the cost of those platforms. I'm hoping you can clarify, whether has there been a change at all in Aptiv's own outlook for EV volumes this year because some OEMs have certainly talked recently about seeing some slower EV growth, but perhaps some or all of that is being offset by upside that other OEMs may be realizing?

No. Listen, our assumptions have always been lower than what I think some of the industry forecasts have. So, I'd say from a baseline standpoint, overall view on BEV penetration, high voltage penetration has been lower and has been for an extended period of time as we evaluate business cases for specific platforms or customers, our assumptions on volume tend to be on the more conservative side. And as I mentioned, as it relates to contracting and pricing, we have some levers that we include to provide us with some risk mitigation. So, nothing has changed in terms of our overall outlook. I would say the industry is probably coming closer to where our initial perspectives were as related to bet penetration. Having said that, although we're more conservative revenue growth in the second quarter on high-voltage solutions is close to 50%. So, -- and we're still expecting very significant growth for the balance of the year and into the out years.

Yes, Mark, it's Joe. I mean we had talked about at Investor Day high-voltage being at least 30% grower per year for '23, '24, '25, and that view has not changed at all. So, I think that's -- that was reflective of sort of where we were on our estimates relative to the broader sort of forecasting community.

That's very helpful context. Thank you. And my other question was just around software, and Wind River and some OEMs have continued to struggle with the understandable large challenge of software integration. You mentioned momentum with Wind River and I'm curious if you could elaborate a bit more on the types of engagements Wind River is seen with auto OEMs, and perhaps there's been a recent uptick to some of these challenges that the industry is facing that Wind River can help to address? Thanks.

Yes. I'm not sure there's an uptick. I think the industry still wrestles with software. I think there are still major challenges. Wind River has announced a number of program wins with OEMs, I think today we're, we're actively engaged with, I don't know, 10 OEM to 12 OEMs as it relates to their underlying kind of software architecture and some of the needs that Wind River can provide a lot of momentum there. As I mentioned in my prepared comments, I would expect by the end of the year to have some additional amounts to make. So, those challenges present an opportunity for Wind River. And then when you think about the middleware, real-time operating system as it relates to Aptiv, whether it be in user experience or ADAS or other areas, certainly opportunities for Aptiv as well.

Thank you.

We will be taking our final question from Tom Narayan from RBC. Please go ahead.

Hi, thank you for taking the question. Joe, maybe can you help us understand ASUX timing in 2023? I remember from Q1, I think there were some orders that may have been pushed out. Did those really come in, in Q2? Or are there kind of more to come there on H2? And I know there were I think there were some engineering credits that you expected later in the year. Just trying to understand how we should think about the ASUX business.

Yes. On the -- on the engineering credit, that's a very normal flow that happens every year on ASUX. Last year, by way of example, it was about $40 million of credits in the back half of the year. I'm not saying it will be that amount this year, but that's an order of magnitude, call it, somewhere sort of $20 million to $40 million is sort of a good range to use on that. As it relates to -- you're right, as it relates to Q1, ASUX had a couple of launches that launch, but we're ramping slower than expected due to supply availability from other suppliers. As we talked about at the time, those programs really came back online in March, and have been hitting schedules since -- and that was in North America. I think ASUX North America's growth over the market was north of 20% in the second quarter. So, those are back what you saw now in North America, I referenced, we've got -- which is, again, nothing to do with supply chain, sort of getting back to sort of normal ebbs and flows of the business. We've got some -- on the SPS side, we've got some programs winding down. We've got a heavy launch calendar in the back half of the year. So, I think as you get to the end of the year, North America's growth over the market will look like the rest of the business, but you always get a little bit of lumpiness from time to time in some of those numbers.

I don't know if you guys can answer this. But on the whole UAW situation, and this might be a question really for the OEMs, but -- have you guys noticed OEMs kind of building inventory ahead of it? Or maybe put another way, looking back at what happened in 2019 for you guys, is there anything you've learned from that experience that could help you prepare in the event something happens? Thanks.

Yes. Listen, I think we direct you to our OEM customers. So, we don't have a UAW workforce in North America. So, from a direct employee standpoint, that's not something where we have exposure where we have exposure. I think we would say, having gone through it in 2019. There's some small operational lessons learned as it relates to kind of supply chain management, and inventory management. Things like that. But I think it's a question more appropriate for our OEM customers.

Got it thank you.

That concludes today's question-and-answer session. Kevin Clark, at this time, I will turn the conference back to you for any additional or closing remarks.

Great. Thank you very much. We appreciate everyone joining us this morning. Have a great day. Take care.

This concludes today's call. Thank you for your participation. You may now disconnect.