John Lawler: Yes. Thanks, John. It’s a great question. That’s exactly it. The headwinds are $4.5 billion to $5 billion, as we pointed out. And we said we expect on the tailwinds pricing to be about neutral. The market forces, I think, are going to drive average transaction prices down. We think probably around 5%. And that will come some from the dealer margins, but also from higher incentives. And then you step back from it, and we do have the new Super Duty, and we expect that to be a positive and we also have a very strong order bank on our commercial vehicles. So we’re looking at pricing being about flattish we said volumes, there’s a slight opportunity as industry comes along. So the rest of it falls into cost reductions, and that’s exactly right.
When you look at those cost reductions, you have to see what’s happening relative to the material. And in, there’s two phases there. There’s one, it’s — we do expect commodity prices to come off a bit to improve a bit, but we also have significant opportunities in our material cost, and we have several initiatives going on to identify those efficiencies. We also have quite a bit of cost when you talk about schedule stability. I don’t have the exact data from the competition. But when I look at our scheduled stability, there are significant opportunities through changes that we can take to improve that schedule stability, which will flow straight through to lower surcharges from the supply base because they have to deal with that instability and there’s cost that drives as well as the significant premiums we paid in freight for expedite, air freight, et cetera, to just try to keep plants going and keep our suppliers’ plans going.
So, those are two immediate actions that we can take based on the inefficiencies we saw in ’22 that cost us the $2 billion. And then on top of that, we have to build through the core industrial platform just productivity and efficiencies to drive even more improvement. So that’s how we’re thinking about it, and that’s how we’re going about it.
John Murphy: Okay. That’s actually incredibly helpful. And just on the long term, I mean you mentioned, Jim, about scrubbing things foundationally and really getting to some costs there excess, and I appreciate the three areas you’ve highlighted. But as we look around the world, I mean, Europe is — had fits and starts of making us all kind of excited that it’s going to work and then it doesn’t from time to time. And China, you kind of been chasing competition there, and it hasn’t really paid out for you. But there are two very important parts of Europe and China that are very strong for you. Commercial vehicle in Europe is incredibly strong. So could we just strip Europe back to pure commercial vehicle and could China just strip back to pure Lincoln?
Two places we know you’re making money and cut out the other stuff so that you can actually fund the transition that you’re talking about? I mean, just — we kind of all dance around this stuff and you’ve headed in this direction with the global redesign, but there’s real opportunities here to be really profitable.
