Christopher May: Yes. So if you think about €“ they came on mid-year, June 1, 2022. And if you look at the full-year performance, the Tekfor had for us and contributed in 2022 from an EBITDA perspective, it was just a little bit north of 7%. And you may recall, going into this transaction, we saw a great opportunity to expand some of our diversification in customers, but also a great synergy opportunity. So the incrementals you see coming on line for 2023, you’re sort of more than 10% to 12.5% range. So you’re accomplishing a couple of elements that you’re bringing on the full cost business for the first five months, plus you’re starting to see some of those synergies start to kick in, in 2023. So that implies sort of $5 million to $10 million range of synergies coming online because you’ll get a holistic lift to your margins.
I would expect synergies to continue to grow after this period as well. And then obviously, once we transition past the full-year 2023, their change in revenues will be on a variable profit basis.
Emmanuel Rosner: Yes. That makes sense. I wanted to ask you about non-material cost inflation. I think you had previously indicated you expect some of this inflation to be sticking around for the year. I don’t really see it as a sort of a major factor in the walk. Is this not a headwind for this year? Or do you anticipate offsetting these cost increases with productivity?
Christopher May: Yes. No, it continues to be a headwind in particular areas such as labor and some other costs that we incur. It’s included in our productivity, inflation and other common net column. If you think about in 2022, our net residual after customer recoveries for the bulk of this type of inflation was about $60 million. We also had some labor inflation on top of that. Our expectation is that on a net basis is lower than that, lower than half of that here in 2023 versus 2022. But again, customer recoveries and productivity initiatives will help us set a lot.
Emmanuel Rosner: Okay. And just very finally, if I can squeeze one more.
David Dauch: Sure.
Emmanuel Rosner: So I guess in terms of overall message, right? So your industry conditions are still fairly choppy, and that sort of continues to put some pressure on margin. What sort of €“ what do you need to see to get back towards sort of like a path of stable margins or margin expansion? Is it just €“ is it mostly around the volatility of schedules? Is it sort of like additional industry volume growth? I guess what would be needed for that?
David Dauch: Yes. Emmanuel, this is David. I mean, clearly, the first thing is we just see stabilization in our business, right? We were dealing with so much uncertainty and volatility in our production schedules. So first thing is stabilization of the production schedules. Clearly, any growth, as the market starts to recover and rebuild some of the inventory, I don’t think the inventory will ever go back to historical levels, but incremental growth will be positive for us. And then we also need to see stabilization of the workforce from a labor standpoint. And we’re not waiting around for that. We’re making investments in automation and other things to take those things into our own control. But the biggest thing would be stabilization across the board.
Christopher May: This is Chris. That’s from the labor perspective. Your question even more broadly as it relates to margins. Obviously, volume drives a lot of that stabilizing or reducing, even metal market reimbursements, obviously, inflation that we just talked about that you’re asking about. And ultimately, as David mentioned in some of his prepared remarks, it continued to squeeze down on some of our fixed cost and capacity utilization increases will drive margin as well.
Emmanuel Rosner: Thank you very much.
Christopher May: Yes.
Operator: Our next question comes from James Picariello from BNP Paribas. Please go ahead with your question.
James Picariello: Hi. Good morning, guys.
David Dauch: Good morning, James.
