Good morning. My name is Melissa, and I will be your conference facilitator. At this time, I would like to welcome everyone to the BorgWarner 2015 Fourth Quarter and Full Year End Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. [Operator Instructions] I would now like to turn the call over to Ken Lamb, VP of Investor Relations. Mr. Lamb, you may begin your conference.

Thank you, Melissa. Good morning and thank you all for joining us. We issued our earnings release this morning at around 8:00 a.m. Eastern Time. It's posted on our Web site, borgwarner.com, on our Investor Relations home page. A replay of today's conference call will be available through February 18. The dial-in number for that replay is 800-585-8367. You'll need the conference ID, which is 25547967 or you can listen to the replay on our Web site. With regard to our investor relations calendar, we will be attending the following conferences between now and our next earnings release; The Barclays Industrial Conference in Miami on February 17 and the BofA Merrill Lynch New York Auto Summit in New York on March 23. Now, back to today's earnings release. Before we begin, I need to inform you that during this call, we may make forward-looking statements which involve risks and uncertainties as detailed in our 10-K. Our actual results may differ significantly from the matters discussed today. Now, moving on to our results, James Verrier, President and CEO, will comment on the industry and provide a high level overview of our results and expectations for 2016. And then Ron Hundzinski, our CFO, will discuss the details of our results and guidance. Please note that we have posted an earnings call presentation to the IR page of the Web site. You'll find the link at the events and presentation section beneath the notice for this conference call. We encourage you to follow along with these charts during the discussion. With that, I will turn it over to James.

Thank you, Ken. And welcome to everybody. Thank you for joining us this morning for the call. As Ken alluded to, I'm going to provide some high-level commentary around both the industry and around BorgWarner. I will give a brief recap of some of our financial numbers and then Ron will go through the details around those numbers. So, I am now on Slide 1 for those of you following along with the deck. And I'm going to just provide a few overview comments about the macro and industry. Let me just start at a general high level. And I think what we are experiencing at BorgWarner just like everybody else, in general is a lot of uncertainty out in the world. And whether that's reflected in oil prices, strength of the dollar, Middle East and challenges. We do see a lot of uncertainty out there. But I think what we also see is a pretty solid auto industry. Now, I will provide more color and detail around that as I go through my comments here. But my message really is in spite of all of that macro uncertainty, we see strength in the auto sector. The other comment I'd like to just proactively talk a little bit about is China. And as you know, China is a really critical market for the growth of BorgWarner. So I want to spend a moment and just provide some overview there. So, as we go into the year, we see GDP levels for China in the mid-single digit type of a range. We see auto production in a like vehicle auto production in about 3% to 5% growth environment. We do see the incentive programs and initiatives that were enacted towards the end of last year. Our assumption is that they will…

Thank you, James. And good day, everyone. Before I begin reviewing the financials, I would like to commend all of our employees for their hard work in the quarter and more specifically a great finish to the year. Also as Ken mentioned, I will be referring to the supplemental financial slide deck that is posted on our IR Web site. I encourage you to follow along. Now on to our financials. Let's start on Slide 3. Sales on a reported basis were up 6.6%. However, to get a clear picture of how the core business performed, we exclude impact of FX and Remy. And excluding those items, sales are up 7.1%. Gross profit as a percentage of sales was 21% in the quarter or 21.4% excluding Remy, up 70 basis points from a year ago. SG&A as a percentage of sales was 8.4%. Again, excluding Remy, SG&A was 8.2% of sales, 30 basis points improvement from a year ago. R&D spending, which is including SG&A was 3.6% of sales. I would like to point out Remy did impact that number by 20 basis points. It was probably 3.8% without Remy. Now, let's look at the year-over-year comparison for operating income which can be found on page -- on Slide 4. Starting on the right, fourth quarter 2015 operating income adjusted for non-comparable items including Remy was $269 million or 12.6% of sales. Excluding Remy's $8 million of net contribution to operating income, operating income was $261 million or 13.2% of sales up 80 basis points from a year ago. Excluding non-comparable items, Remy and FX, operating income was up $34 million or $141 million of higher sales. That gives us an incremental margin up 25% -- 24% in the quarter. A reconciliation of the reported operating income to operating income…

Thanks, Ron. Now, let's move to the Q&A portion of the call. Melissa, please remind everyone of the Q&A procedures.

Good morning. This is for Deepa Raghavan for Rich Kwas. A few quick questions. What is your incremental margin assumptions by segment for 2016?

We don't provide that kind of guidance by segment. We just give the total company guidance which is on the deck that I was referring to earlier.

Okay. Secondly, could you also give us early read on integration synergies from Remy?

Sure. Back in the announcement in last July, I believe it was, we gave guidance that the synergies on the cost side were going to be $15 million. I would say we were on track of hitting that goal at this point. We didn't give any synergies at this point on the sales side but we are getting momentum there as well and now we have more clarity as we go forward.

Okay. This is for 16 -- 2016?

The cost synergies were 2016.

Okay. Thank you. That's all I have.

And to be more specific, we will realize half year savings of the $15 million in 2016, the run rate in 2017 would be $15 million, I need to be more specific there.

Your next question comes from Brett Hoselton with KeyBanc Capital. Your line is open.

Good morning.

Good morning.

Let's see here. Can you talk about Remy as we look into 2017 and 2018 and specifically your revenue growth expectations and your margin expectations?

Yes. I can -- let me take a shot at that, Brett. From the revenue perspective, I would say our outlook for growth is pretty similar to BorgWarner in general. So mid-single digit growth as we see it today Brett into 2017 and 2018. And from a margin perspective, what we are starting around that mid-single digit growth that's the start point is mid-single digit growth. And I believe -- and again, it's a little early in the process, but our belief is that we will be able to take that up to high single digits over the next two to three-year period.

And as you move into high-single digits, is part of that purchase accounting or is it, basically doing -- is it more restructuring oriented or is it some combination of the two?

I would say it's not purchase accounting coming off. It's more operational driven.

Is there a step function improvement as a result of purchase accounting at some point in time in the near future?

There is but I think its 18 -- maybe 18 or 19. Some of the stuff comes off after three years, some of its 10 years. There is a long tail for that. So we won't see some of those benefits for some time.

Okay. So hopefully we will be on a beach by then. The 2017 margin drivers in general direction, what are the -- maybe the key one, two, three margin drivers and then just do you, is it likely that they are going to go up or down. It seems like it should go up. But, I just want to know what your thoughts are?

So Brett, you are saying 2017, not 2016, right? I want to make sure I get the right -- I would say some of the -- as you know, we always target mid-incremental margins, mid-teens incremental margins on our sales growth. And that is above our nominal value right now. So that would drive increased margin expansion. Then you still have -- I will admit Drivetrain is still not where the Engine group is. So we still probably have more tailwinds there. Trying to think what else, probably the Remy what we just talked about as well. And then Wahler; Wahler as to also contribute more going forward. So I don't have all the numbers there Brett but I would say there are a lot of tailwinds I just mentioned.

Okay. Do you see any particular headwinds?

We don't see headwinds now. Commodity prices is still -- I think we are predicting those to stay flat, right? Oil prices and so on and so forth. I don't see them right now, no. I don't see anything right now.

Let's go. And then very quickly share repurchase what did you do in the quarter and what's kind of the run rate -- your expectation for run rate going forward?

Before we did 220 million a quarter, 350 for the full year, obviously, we are very heavily weighted in the fourth quarter. We purchased a lot. We intend to stay at a healthy pace right now as well, I would say that in the first half of this year, 2016.

Well, I guess my question is, that I mean, you did 39 million in the first I think and 25 in the second and 67 in the third and then you did 220 million in the fourth. And so do I model 50 million per quarter or do I model 200 million per quarter. I mean if you were me, what would you do?

I think at this point it may be more linear at this point to model, okay.

I guess, I'm not sure what that means.

Well, like 50:50 number you gave out, I would say at this point.

Okay, cool. Perfect. Thank you very much gentlemen.

Appreciate it, Brett.

Your next question comes from Joe Spak with RBC Capital Markets. Your line is open.

Hi. Good morning, everyone. Thanks for some of the -- first for going over the guidance again and also, I think adding a touch more color on some of the regions and some of the different puts and takes you see. If we sum it all up, though, and I think you even said you are sort of close to IHS, I just want to make sure the right way to think about the sales growth for this year is that an industry volume level it looks like you are probably looking for 1.5% to maybe 2% volume growth which may be offset, you know, the annual price downs. So if we look at the midpoint of your organic growth guidance, that is still about 4% which is -- if we look at it another way basically what you think you guys are adding in terms of content to the city? Is that a fair assumption?

Yes. This is James, Joe. That's a really good summary. I think markets are close enough to offset each other, which implies about 4% of organic growth. That is a good summary.

Okay. And then, so, it was in the range it's mostly volume or sort of timing of some of the programs come on that are going to take us from the high-end to the low-end?

Yes. Let me, maybe, if I can try to give it -- on this way. What's driving that organic growth obviously is the net new business. I think just to add a little bit of color to it, it's stronger obviously in China and Asia particularly. We are seeing some good launch activity in North America maybe a couple of good key program launches in Europe. So that's what's driving the growth. I think as we outlined in Detroit, Joe, as we built this up, we have been fairly prudent around the volume and the cadence of those launches to make sure that it's more pragmatic and we embedded in that number, we asserted some macro pressure as well which we again talked about in Detroit. So, it's has it was in Detroit, if that helps you, Joe?

Yes. Okay. That is helpful. I guess just -- sorry, if I missed this one, but the -- just the incremental flow through volume on power train in the quarter, well over 100% -- maybe -- sorry if I missed what drove that? If you can just review that? But then also, can you just remind us how we should think about the cadence of some of the European restructuring that you have done, how that should flow through this year? I believe you should be sort of at the right run rate in the back half? Is that the right way to think about it?

Right, Joe. Two questions. First to talk about the Drivetrain incremental margin of 156%. In my script, I pointed out that in Q4 of 2014, if you go back to transcript you will see $5 million to $6 million headwind. And you would have saw that actually sales erupt and incremental margins down a year ago. That's behind us. So what you're getting, are you're getting $6 million of flow through that we didn't have a headwind on in the fourth quarter of this year versus last year.

Okay.

So that $12 million, half of it is in one area right there. Then as we go forward into 2016, if you recall, if you go back in our notes, Q1 of 2015 was about a $9 million headwind -- $3 million headwind. And then we had another headwind in the second quarter as well. So, obviously, we're going to have those headwinds behind us in the first half of the year and we'll get tailwinds there -- they have strong incrementals and then we level off like you said in the back half of the year to more normalized margins. Hopefully that helps.

Sorry, but those headwinds you faced last year were for some of the costs associated with moving equipment and some other restructuring. I guess what about the benefits from the actions you've taken like when do those start coming in like aside from the non-repeats of the costs you incurred?

Well, right now they are starting to coming in. Remember, I also said --

Okay.

-- that we were running at 9% margins. We are up in the 12s, right? So we have been getting benefit quite frankly over time then this volume comes into play. So we are seeing the benefits now and then we are also seeing the inefficiency headwinds going away, so it's a combination of both that's uplifting those margins to the -- in this 12 range right now.

Okay, great. Thanks very helpful.

You're welcome.

Your next question comes from John Murphy with Bank of America/Merrill Lynch. Your line is open.

Good morning, guys.

Good morning.

Just a first question and I don't necessarily you won't agree that we are facing down the barrel of the abyss in the cycle here but clearly the market is indicating some extreme concern of a downturn hitting very soon. So, if we were to think about a downturn of 5% in volume and then maybe 10% in volume, could you just sort of run through how would you think about reacting from an operating standpoint as well as maybe capital allocations standpoint?

Yes. I can -- let me John take a short at the operating side. First of file, so the good news for us as we look around the world of the company and I compare it to some of the last, our temporary employees are in much healthier state. And depending on the region, John 10% to 20% of our workforce is temporary and that allows this opportunity to react pretty quickly flex on the labor side. Europe we -- I think we have more progressive agreements in place we had before. So, I feel comfortable on the labor side that we can adjust. And I think the other area that we got pretty proficient in this, if we need to flex on discretionary spend, we, how to do that from prior cycle. So that probably the two dials that you would move pretty quickly all leading to target and detrimental sales at around the 20% rate is where we look to manage the business to. But I would just add anecdotally John, for each other operations around the world have those plans in place kind of on the shelf in a lot of detail by region and by plant. So, bottom-line I feel pretty comfortable, if there is pressures we will be ready.

I understand capital allocation depending on the cash flows, we will have to reassess what we do with capital allocation, 5%, 10% might have some impact I think, we would have to watch, John. But I don't know 10% will become more stressful, I guess, 5% probably wouldn't.

Okay. And then just a second question, I mean Ford announced this morning that they are launching four new SUV's in the North American market and actually maybe beyond that. FCA is talking about adding truck capacity or changing over car capacity to truck capacity. So it just seems like the whole world is moving towards these cross-over in trucks. That should be good for your content. Can you talk about what you are seeing in the market and what kind of potential you have both in engine and Drivetrain as we see the shift going forward?

I think your thought is right, John. For us and I'm talking obviously, just North America at the moment. The truck to car mix generally speaking the truck mix is slightly favorable for us. I think it's pretty well known we have, you know -- it varies a little by customer. So we are well contented clearly on the Ford platforms and F1 50 platform in particular. FCA were well positioned, GM would have a little less well positioned but we are taking steps to address that. And I would say to you it's pretty well-balanced both on Engine content and Drivetrain content. On the Drivetrain side we are well positioned on the transmission content, but clearly the transfer capability that we have there is strong. And on the Engine side, I would say one of the big shifts has been more turbocharged engines for those vehicles which we benefited from, which is a bit positive for us and on Engine timing also were picking up good content. So net-net it's a positive tailwind for us.

And on margins, any color there on the delta between the car and cross-over and truck?

Not really much of a difference there for us, John. It's pretty consistent cars to trucks and region to region actually which we've set fairly consistently so it doesn't change that much for us.

Okay, great. Thank you very much.

Thank you.

Your next question comes from Brian Johnson with Barclays. Your line is open.

Good morning. Yes, I wanted to talk a little bit about the transmission business. The short-term question like a mid-term question, the short-term question is, what's behind the lower transmission component in Europe. You talked about maybe some programs being phased out, there are replacement programs coming later in the year. Are there any trends we need to think about in terms of AMT versus traditional, planetary versus CBT going on?

There is a couple of moving pieces on that transmission Europe aspect. One aspect is, one of our German customers did inventory shifts in Q4 and we saw a little bit of that in Q1 on transmission related products. And you have seen that's been in the news publicly so you probably know that. That was an element of it. The other element of it was European transmission programs that are phasing out for us. The replacement programs, I would say net neutral to negative for BorgWarner. It's hard for me to speak to the exact detail because of the customer. Importantly these were planned, this is all part of our net new business assumption. It was all expected for us, so it's not a surprise. It's nothing knew. And I would say a high level brain it's a signal of a significant shift in transmission architecture. This is not people making massive moves between stepped automatics to DCT or automated manual. I think it's more specific program by program for a couple of customers.

And then, second question which you kind of touched on but maybe just kind of pull the pieces together, X Remy a fairly incremental margin which means pricing or restructuring or some benefit. Can you kind of elaborate on the margin improvement ex-Remy and the Drivetrain and the cadence of that as we think about the rest of the year.

Okay, Brian, so, the incremental margin for the quarter 24% was primarily driven by the Drivetrain segment being up 156%.

Yes, that's 156 in Drivetrain.

So the Drivetrain really drove the full company, right? Although we had 14%, 15% in engine. I would say that there is about $6 million or $5 million last year of headwinds that we didn't see. So, of that $12 million increase in operating income, half of it alone was just not having those inefficiencies in our face quite frankly. The other half I would just say is that the business is improving. There is a whole point of the restructuring. As we go forward, remember, we had -- Q1 and Q2 of last year we still have these headwinds coming. It wasn't until 3 and 4 that the headwinds dissipated and the incremental margins started returning. So the first half of 2016 should have good tailwinds because we don't have those inefficiencies in front of us any more and then they will level off in the second half to more normal incremental margins.

Yes. Then finally within Drivetrain is there a way to think about the Remy contribution in terms of an engine -- the Remy contribution in terms of traditional Remy products versus new growth in terms of getting them into new areas or kind of showing efforts together and how that is begun to shape up since you closed the deal?

Yes. Let me talk to that a little bit, Brian. I think what we have alluded to so far, we feel comfortable, as we look out into the next couple of years that Remy is going to deliver good mid-single digit type growth for us. As you can imagine, that's primarily driven off the existing portfolio products into new channels. So what I mean by that is, this two primary channels of growth for us with the current portfolio. One is customers. They have a relatively narrow band of customers. With BorgWarner's breadth of coverage on customers that's going to drive content with their existing products. The second growth driver for us is a regional play where they have a strong position in North America, they are well positioned in China but quite weak in Europe. So that's going to be a series of opportunities for us to sell current portfolio of products. And that will drive the content growth over the next two or three years. Then to your point in parallel to that, there is a lot of discussions that we are having with customers around combination products of the Remy architecture and BorgWarner architecture. I'd say there is a number of areas and we can talk more about this offline. But the most prevalent area of discussion right now is the notion of a P2 hybrid architecture, so combining clutching know-how together with the motor know-how and we got a lot of interest in that. That's likely to be a revenue stream that's probably four to five years out but it's very active and driving it. So hopefully that gives you a sense of both the shorter term growth levers then the longer term growth levers.

Thank you.

Your next question comes from Rod Lache with Deutsche Bank. Your line is open.

Hi, everybody. A couple of housekeeping things first. Just I apologize for asking this again, but in the Drivetrain business, can you clarify what the combined benefit is of the non-recurrence of the headwinds plus the restructuring savings that you expect for 2016?

If you go back to our guidance full year, I think it was on slide deck -- that we gave at Deutsche Bank, Rod, remember? There is a slide in there that shows that we have about $10 million to $20 million tailwind for the full year -- that was a headwind in 2015, okay? So, it's $10 million to $20 million as a full year. It's in that deck. And that's what drives the 18% to 20% incremental margins for the company for the full year. Normally it's mid-teens. But the tailwinds are driving it around to the 20% range.

Right. That part I saw. That's the non-recurrence of the headwind. I just -- there is an additional part that you were asked about earlier on the savings from some of the restructuring actions you have taken.

Sure. If you go back in time -- this goes way back in time. We said that the benefits were going to generate about $30 million of operating income benefits going forward. What's really happened over time, was we probably incrementing and getting some of that as we go forward and the margins have lifted up over time from 9% to 12%. So we have been getting a little bit of these benefits as we go forward because the labor cost are lower for example so and so forth. So we have been getting some of these benefits. But it's over 3 almost -- three years now, right? So, that math looks a little bit more difficult. But basically its absolute rise in the margins as well that we are getting.

Okay. So, a lot of it is -- we are seeing it in the numbers on that part of things?

Yes.

And can you remind us what your R&D assumption is for 2016?

It's still -- well, all right, so, it's 4% but I will be honest right now with the Remy coming on board, it might be 10 basis points lower. I'm splitting hairs right now.

Okay. Got it.

But I've got it 4%, all right?

Okay. And then, just lastly on the organic growth, is it correct in, you know, if we are looking at 2.5% to 5.5% that's basically all engine this year because the transmission programs that are phasing out? And when we look at the organic growth over the course of the year, it's starting off obviously below the full year forecast. So, what kicks in over the course of the year that causes the acceleration?

Rod, this is James. It's absolutely both Drivetrain and Engine. So we are delivering growth on both segments. Those two phase-out programs I talked about are relatively small actually. They are in there. Just to give you a sense, to put a bit more color there to help you, it's -- we drive upwards through the year. So, our launch activities are a little backend loaded which is not unusual for us. But it's across both Engine and Drivetrain. So, we are launching for example DCT uplift in China. We're launching Solenoid activities in China. We've got all real drive launches with another Chinese OEM that's Asia. If I talk about North America, we got a super duty launch. So it's a real mixture, Rod, I wouldn't want you to think its only engine. It's certainly both. And I would say it's weighted to China and North America which is consistent with the net new business announcement.

Okay. Great. Thank you.

Thanks, Rod.

Thank you, Rod.

Your next question comes from Patrick Archambault with Goldman Sachs. Your line is open.

Yes. Hi, good morning. A couple from me. Just on Wahler, if I have this right, I think you had extended the timeframe to become -- for margins there to converge with the corporate average I think over three years. And this is, I believe probably the last year, right? And, so, how much of a tailwind is that in the walk that you presented for your guidance, was it included in that 18% to 20%? Because I didn't really see it broken out and conceivably that would be yet another area that would be over earning from an incremental perspective relative to other things.

Sure. So, the guidance that we've issued implied about $8 million nominal value of extra operating income related to Wahler. The other thing I want to clarify is, when we purchased Wahler, we said two to three years. And we also said after we got into the business it was going to be more like three years, not two years. And that would still take us into 2017. It's where the run rate would be where we are happy where the business should be.

Got it. And that $8 million is -- is that sort of incremental -- I mean, is that just the contribution -- how do we think about it, is that kind of the margin contribution piece of it I guess?

Yes, the margin improvement, correct.

Got it. Okay. And then the other question I had is, I think James in your comments earlier, you had spoken to not really seeing any changes on the regulatory front and there does seem to be an initiative by some OEMs to try and change the cafe standards right at the mid-cycle review which I think is happening this year. It's not to say that that may not have as much of an impact on internal combustion engines as it will on perhaps EVs but you just -- wanted to get your opinion. Is that sort of incorrect or do you have a view that that initiative is not going to be successful? I mean just a little bit more perspective would be helpful.

I would be happy to do that. And let me give you some commentary. Our view is that there will be the mid-cycle review obviously that's all planned. Our view based on the multiple different inputs we get is -- we are not anticipating significant adjustments or change to the plan. There is going to be sure robust discussion. That's obviously even more robust with gas at less than two bucks a gallon. So I think there will be discussion. But I think significantly or changes I don't think are going to happen is our view of the world. So we think it's going to continue on as planned frankly speaking. What we do see, which I alluded to in part of my comments, Pat is, there is absolutely a push for a spectrum and alternative types of power trains. So, we are not seeing people at all step away from advanced IC engines. That's absolutely front and center. There is a tremendous amount of activity and launches around advance gas engines. Yet we see a strong push for the pure electrics which we are right in the middle off and high breads as well in the many different configurations of hybrids. So I think there is a general March towards execution of the standard maybe with a few tweaks and each of the OEMs getting a suite or spectrum of architectures that they can get to deliver on those numbers and we are right in the middle of all of those architectures in discussions with them. So that's our view of how we see it right now, Pat.

I mean it sounds like it's more based on what you are hearing from your customers rather than an opinion on sort of regulators?

Yes. I would say it this way, Pat. Clearly we are engaged very deeply with all of our customers. That's a real strength source. But we talk to regulators, we talk to different business groups, different industry groups. So we are taking a large variety of inputs, it's not just our own narrow self view, if that makes sense to you, but it clearly is driven off a lot of what the customers are doing. Because they are the ones that are working with us on what the architectures need to look like.

Got it. Okay. Thanks for the color guys.

Thanks Pat.

Thanks.

Your next question comes from Ryan Brinkman with JPMorgan. Your line is open.

Hi. Good morning. A couple of questions on backlog, first on China. Now for the tougher backlog developments in China in 2015 which included delay of some vehicles, lower sales in production of others. I'm curious if the stronger trend of sales and production in China in 4Q and So far in 1Q might be possibly impacting your backlog in anyway. Are you seeing any signs that earlier delayed vehicles might be coming back on the schedule or vehicles from which you've trimmed yourself in production expectations or maybe selling faster being produced in higher quantity?

I would say, I will give you this sense that Q4 is a good quarter for us in China. We had about 20% growth in the quarter in China very strong and as I alluded to earlier, part of that was some of the incentives. And we are seeing that strength roll into Q1. So, it's still early in the year. We feel comfortable in the net new business announcement. We feel comfortable with our guidance around growth. I'd say if anything I feel incrementally a little more positive about China than I did a few weeks ago. How much of that is going to translate into real revenue by quarter and by backlog, we will see how that plays out. But I would say I'm feeling more comfortable around China after a strong Q4 and the incentives flowing into Q1. And you know, Ryan, a large part of our backlog is China related. So I think it's a net help for us right now.

Okay, great. Think this is the last question on backlog relative to Remy, on the revenue synergy which you talked about earlier, given your comment that you are making progress there but haven't quantified the opportunity, is it fair to say then there are not any such sales synergies included in the backlog through 2018? And then what is the timeline for realizing such synergies if they occur. Is there a chance it could positively impact the backlog within the present window or would the benefits more likely accrue beyond 2018?

Okay. So in the net new business we delivered a couple of weeks ago, we didn't have those -- those synergies were not in, Ryan. And the reason just to be transparent with that, we only owned the company a few weeks. It was premature. I think give us a little bit of time is what I would say is, as we walk through that this year. But if I was thinking out loud, I would say, as we get our arms around that, I think the contribution to the net business as we go forward will be stronger from Remy than it was in this one. And again, you got to hopefully give us a little of time to flush that detail through and go after meetings with the customers et cetera. But I think we will see a step up in contribution from Remy in terms of growth when we do the next new business. When that will play in and how much, Ryan, we need a little time there, but I will tell you direction, I feel very positive about it.

Okay. That's great color. Thanks a lot.

Thank you.

We have time for one final question and that question comes from David Leiker With Robert W. Baird & Company. Your line is open.

Hi, guys. This is Adam Schmitz on the line for David.

Hi, Adam.

Just first on the Remy cost synergies, can you outline some of the low hanging fruit that you expect to occur in 2016 and now that you had the business in house for a few months what are the longer term opportunities for cost synergies?

So when we made announcements about a year ago, we identified corporate governs cost is a really easy one to grab. Obviously, they don't have a Board of Directors any more and the executive group is gone. That was one. Another was cost synergies on our purchasing side. That's the one that will take more long-term, I would say. Over time, we'll get those benefits. But those are the two main ones we pointed out at the time. Then there was another one, just basic redundancy, I would call active corporate, not the corporate officers but corporate staff itself, some redundancy cost there. We said that we need to get about $15 million full year run rate which in 2016 we would see about half of that.

Okay. And then last one from me, James, as you alluded to the company saw a kind of number of market headwinds in 2015 outside of just China, off highway, Brazil among others. Can you just talk about some of the biggest headwinds you saw in 2015 and kind of where you see those affecting the company in 2016?

Yes, the -- you covered the two big ones which was the China was a lower absolute growth market for China and everybody. That was weighted because of our launch activity and commercial vehicle was the other significant headwind we faced. In commercial vehicle, and I would say that was globally. But Brazil to your point was probably the worst. As we come into this, our assumptions are based off 3% to5% light vehicle production growth in China. No growth in commercial vehicle globally. Those are our two macro assumptions and that's how we are going into the year and that's how we built our guidance. So --

All right. Thanks, guys.

Thank you.

Thank you.

I'd like to thank you all again for joining us. We expect to file our 10-Q before the end of the day -- excuse me, 10-K before the end of the day which will provide details of our results. If you have any follow-up questions about our earnings release, the matters discussed during this call or our 10-K, please direct them to me. Melissa please close out the call.

That does conclude the BorgWarner 2015 fourth quarter and full year end results conference call. You may now disconnect.