Jim Kamsickas: Yes. Ryan, I think you hit it right on the head. So I think as you think about the inflation effect on the business. It has — even if you were to recover 100% of your inflationary costs, which would keep your total profitability the same, you’re going to have a margin squeeze because the customers are not paying any margin, any profit on those costs. And in fact, if you look at us this year, right, we still expect to see a $50 million net headwind. So that not only do we have the margin impact of just — if we were to recover dollar for dollar, we haven’t recovered dollar to dollar. So I think when you think about the supply base, I think it’s going to be more important over the longer term. Over the longer term, as all the programs turn over and things get repriced, and all the costs get built in, I think you’ll see margins start to move back to where they may have otherwise.
But I think that’s a long road. I think the better metric to be thinking about is total profitability, total amount of dollars generated and what that return is. Because, our view is as we move through, especially as these large programs are now rolling on and we’re seeing them come through and we get them repriced, while we’re recovering those added costs, we’re not recovering all that margin. But what we are doing is getting these programs back to an equal or better economic return. So I think as you think about return on invested capital, that’s a really good way to think about these programs and the way we are continuing to think about them because margin as a percentage is, I think, going to be — continue to be lower than what it was pre pandemic.
Operator: Your next question comes from the line of Dan Levy with Barclays.
Dan Levy: Hi, good morning. Thanks for taking the question. Jim, I want to start with a high level, please. I think the theme that we’re seeing from some of the legacy automakers on EVs, seen this week in earnings is it’s just a tougher environment for them on the EV. This EV euphoria has dissipated, volume targets are getting pushed out for just pushing out some of the volume targets on EVs. There’s an increased push to be a bit more efficient on spending, maybe more reuse of architectures. How does this impact. Are you seeing automakers change their focus on the light vehicle side on vertical integration? I mean, this used to be very heavily focused on vertical integration. But perhaps with the idea that if there just isn’t enough volume those volume targets are getting pushed out, does that maybe change the way that some of the automakers are looking at vertical integration maybe opens up more opportunity for you?
Jim Kamsickas: That’s great questions. A lot to unpack there, but I’ll do my best. The way I see it, first of all, in terms of the volumes, I absolutely follow the same commentary that you follow as it relates to that. But at least from our line of sight, at least in the truck business, and I think we have to remind ourselves of that quite regularly. Truck business versus car business is two different things, right? And at least from the truck business and where we see electrification going, at least from our line of sight with our customers, I think they see it going as well. It still is nothing but green shoots and positive. So I’m not trying to market a positive story there. That’s just the facts as I see it based on a bunch of other data points.
