Operator: Excellent, thank you. We will take our final question from Ron Epstein with Bank of America. Your line is open.
Ron Epstein: Hey, good morning.
Jason Aiken: Morning Ron.
Ron Epstein: Maybe just two. On land systems, given truly the surge in demand relative to where everybody thought it would be, from a capacity point of view, from a labor point of view, how are you guys set up there to handle it all?
Jason Aiken: You know, I have to give a hand to the guys in the combat systems group in general, and land systems specifically. You’ve really not heard us talk about supply chain bottlenecks, labor capacity or other issues in that group, and that does not mean they have not faced them, they are just–they stand out amongst even a spectacular crowd in the way they’ve handled it. I don’t have any expectation that we’ll see any issues as we look ahead, even as the demand for their product, both domestically as well as internationally, continues to grow.
Ron Epstein: Then maybe just changing gears a bit, nobody really asked a heck of a lot about GDIT.
Jason Aiken: Thank you for that – finally!
Ron Epstein: Let’s talk about that, it’s a big piece of the company, right? You know a lot about it in particular. When we think about a path to double-digit margins, how do we get there, and then maybe from an operational point of view, why does not integrating mission and GDIT together kind of make sense, because there’s this bigger demand for software-driven solutions and software and hardware, and you’re seeing this synergy coming out particularly with the application of AI to legacy systems, and so on and so forth.
Jason Aiken: On the margin side, just to be clear, as I think about double-digit margin for the group, not specifically GDIT – it’s the mix of the two of them together, I absolutely expect this group to be on the march back to low double-digit margin. It’s where they’ve been historically. I think if anything I could articulate as a headwind to that, it’s to the extent that the GDIT side grows faster than the mission systems side, that obviously creates a bit of a macro mix issue that could be a little bit of a headwind in terms of how long it takes us to get there. But frankly, I expect to see us get back into the double-digit margin range here in the fourth quarter, and we’ll see how quickly we can get there in the outlook as we look at ’24 and beyond, but I do expect them to get back on the trajectory toward low double-digit margin.
In terms of integration, the way we see this is while they’re very symbiotic businesses and they are dealing with a market that’s dealing with a convergence, to your point in terms of their capabilities, we think that having them separate is appropriate because the investment thesis and the way you run an inherently people business versus an inherently technology development, hardware and production business, are fundamentally different and take different leadership, different priorities and sort of different investment theses. The good news is that by having them together in the same group and in a coordinated way, we are making investments and addressing the evolving technologies jointly as a group, and we are making sure we are being efficient at that and effective at that, not duplicative, not missing anything, and bringing the requisite skills, to your point, from end to end, whether it’s the hardware side, the services, the software capabilities, solutions as a service, software services and so on, together in joint capability.
I think we get the best of both worlds that way in terms of the way we manage and run the businesses, but also the way we can bring combined capabilities to the customer set.
Nicole Shelton: Great. Everyone, thank you for joining our call today. As a reminder, please refer to the General Dynamics website for the third quarter earnings release and highlights presentation. If you have additional questions, I can be reached at 703-876-3152.
Operator: Ladies and gentlemen, this concludes today’s call, and we thank you for your participation. You may now disconnect.
