Jim Farley: Right. Yes, great question. We’re going to see that on Pro first, and this year is a breakout year for Pro because we have brand-new products, both core in Europe and U.S. are most — the highest volume, highest profit vehicles are all new. So, a very important year for us, I would say we absolutely have a fantastic business plan that’s very specific about software and physical services. The biggest opportunity for us in the short term is the after sales business. Only 10% of our Pro customers do business with us, and we hardly do any financing with them. And so between financing and parts and service, we have enormous upside in the short term. And those are very profitable parts of our business. So I would think of it this way, Ryan.
It’s like software is starting to drive a closed loop where the customer wants to do more physical service with us. We have all those mobile units, more and more dedicated dealers and more of our commercial customers because of the use of the software is coming back and buying parts for us. And then the next level of performance is really going to be prognostics. When we could put predictive failure in all the vehicles, like you see on John Deere and Caterpillar, and then drive that into our physical repair facilities, we’re going to see a much larger retention in parts and service. So I think the basics of the business are, these are profitable vehicles. We’ve got new ones coming out. We’re going to grow that. We’re — I mean, we blew through our parts and service profits and revenue for Pro last year.
It’s almost like we can’t even predict as this — that software starts to really drive a different behavior for our customers, the growth in parts and service. But that’s the monetization in the short term for these services in the integrated ecosystem. And then long term, the real game changer kind of like autonomy in the retail space is going to be that prognostics.
Operator: Our next question comes from James Picariello from BNP Paribas. Please go ahead.
James Picariello: So the third quarter negative pre-announcement had a narrative around it, right? It was very high mix on wheels inventory that you couldn’t ship and the additional $1 billion of supplier costs. I know Adam hit on this in his question, but this quarter is missing that storyline. I know it was mentioned that you have line of sight to $2 billion in profit that you left on the table. But what could really turn around almost immediately in this first quarter in ’23 here in terms of like what operational mishaps you know will reverse in the coming months and quarter, whatever the time frame might be?
John Lawler: Yes. I think it comes down to the key driver for the in the fourth quarter was the volumes. And the volumes was on availability of key commodities, primarily chips and the fact that many of our suppliers had equipment issues as they were ramping. We think we’ve worked through a lot of those issues on the ramp in our supply chain. And as far as the rate inflow on the commodities, the chips, it continues to be hand-to-hand comment. But we’re putting corrective actions in place. We’ve got better pipelines from brokers and spot buys, and we’re working very closely with our supply chain down to the Tier 2 chip suppliers. So that’s execution, it changes that we’re putting in place on the rate and flow, and it’s being more efficient in our scheduling and the stability of our production to reduce expedited freight, expedited costs at our supply chain, et cetera.
So, part of it’s operational. Part of it’s what we’re doing working with our supply chain partners. And part of it is getting through the hump on ramping up run rates, et cetera, throughout the system.
