So the value capture there is tremendous on a mix lift basis. So the EV trend, and we are aligned with the top players on this with our products is a significant opportunity. I’d also say head-up display in general, not just in EVs, but all cars have a lot of growth momentum. It was a big mix uplift last year and even though down market, and we think that trend is going to continue and accelerate into this year as a result of the semiconductors, there’s a lot in the HUD. There’s a lot of times if you were trying to buy a car last year, they would let you order the HUD because of semiconductor limitations, that’s going to resolve. And so we see the HUD market picking up. I’d also note that, that’s in large. The paint protection business and the performance films business is doing fantastic, very strong growth, very high margins.
So we got a lot of mix uplift relative to the underlying market in auto that helped us offset some of the challenges last year and certainly will be a significant lever versus last year into this year.
Operator: Our next question comes from Jeff Zekauskas with JPMorgan.
Jeff Zekauskas : Of the $200 million in cost savings, how does it split between SG&A and cost of goods sold?
Willie McLain : Jeff, thanks for the question. I would highlight we have two major pillars within this. We’ve highlighted roughly $125 million of this we’ll be taking from our operations, which would include manufacturing and supply chain and then $75 million, I’ll call it, more in the non-operations which would be SG&A and — primarily. So I’ll break it down a little bit for you. So on the $125 million, what gives us confidence is we expect more efficient operations as we run at lower rates due to moderating demand. As you think about the supply chains as well as our planned and unplanned schedule last year, we expect a significant improvement. I also think we’ve demonstrated even back to the COVID environment that we also leverage a pretty variable cost structure when it comes to leveraging overtime contractors, and we’re already taking the actions at the end of the year, starting in Q1 to change that cost structure to the current demand levels.
And we’re very focused on operating at the most efficient level from an operations standpoint as we assess the demand environment that Mark has highlighted here. On the supply chain and the network optimization, we see $30 million to $50 million in that space as you think about us having to air freight, use inefficient modes on a year-over-year basis. So a substantial increase on that front. Also, as you saw in the prepared materials, we expect to have roughly $25 million lower maintenance year-over-year. And we’re also looking at our asset footprint and as you saw, some restructuring charges there as we look on a go-forward basis. So that’s on the manufacturing front. On the non-operations I would highlight, we’ve already, I’ll call, reduced discretionary, and we’re starting that here in Q1.
So as you think about external spend versus our workforce reduction, that’s about 50-50 from a cost impact on a year-over-year basis.
Jeff Zekauskas : Okay. And so these are net reductions. So does it mean that SG&A should go down $75 million all-in in 2023, exclusive of the $110 million lift in pension expense? And can you explain what the event was that caused the $110 million lift in pension expense?
