Andy Cheung: Yes, so say short answer is, well, it will be net cash positive for us. The amount of CapEx required to execute the cost reduction is not high. And back to the cost reduction and the EBIT margin comments, what John, you can look at this year as a year, that will continue to optimize our cost with our existing business. That’s what Harold is talking about. At the same time, we are building two new factories, right? So there’s a little bit of a ramp up curve there with productivity for the new businesses. So net-net I think right now we’re looking at pretty stable, slightly positive, but I think as we ramp through those new factories, we’ll see a benefit down the road.
Harold Bevis: We’ll modify our comments, John, as we get through a couple quarters of performance, but for now we just wanted to break the ICE and let everyone know that we’re going after our cost structure with gusto in the areas that we’re not going to be growing as much.
John Franzreb: Okay, got it. And just two quick ease I guess, on the pension settlement. Is there any impact from that on the P&L and in regarding to the tax? What is the tax rate kind of look like for the year? And you, I think you said you expect a reversal again at the end of the year. Can you just easily walk me through those?
Andy Cheung: Yes. So the couple things here, one is, we completely finished the settlement of the pension. So now in the U.S. we no longer have a pension liability, which is really a good thing for the company. So you can see in a filing, we recorded the settlement charge for the follow and you can see also the filing the tax implication on that. And the other topic that you mentioned here is the tax rate. I think right now we have put through a lot of the large adjustments at year end, the special items. So the biggest one is we evaluated our deferred tax assets on the book and based on the evaluation, we made the determination that right things due to provide a evaluation allowance, which is in the €“ in the size of about $14 million, $15 million.
We believe that as we are going to the future, right with the profitability, that allowance may not be necessary in the near future. And then you ask about the tax rate. I think at this point our effective tax rate will be in the high 20s. That’s where we are looking at. So, but I know that there’s a fewer big items here, but these all items are all done cash and as Harold mentioned, there’s no impact to operating results short-term or long-term. So if you feel comfortable with those.
John Franzreb: Great. Thank you very much, Andy. Thank you. I’ll get back into queue.
Andy Cheung: Thank you, John.
Operator: Thank you. Next question comes from Steve Emerson at Emerson Investment Group. Please go ahead.
Steve Emerson: Congratulations on a excellent quarter in a tough environment.
Harold Bevis: Thank you, Steve.
Steve Emerson: What proportion in terms of your goal year 2027 and 2022 were EV related?
Harold Bevis: What are you saying? What proportion of our new ones were EV related in 2022?
Steve Emerson: No, like your $1.5 billion objective in 2027. How much of that is EV related?
Harold Bevis: It’s going to be good question. Good question. I’m going to say it’s going to be around, the electric system’s going to be 40%. The electric vehicle portion of that is going to be around half, 20%.
Steve Emerson: So 20% of the business. And do you have a similar number for 2022 or 2023?
