So that was both the, I’ll say, an idea in terms of both, I’ll say, the mix and also the exposure that we had on plants. And obviously, we got massive on recovered fixed cost, that’s a problem. And obviously, we’ve been moving through that well, and that’s why you’ve got some part of the margin rate improvement that we have in our fasteners business. It’s only part of it, as I think I described many other things in it. For the most part, elsewhere, I mean, there are flavors across our engine business, pretesentially, again, like our core making facilities, they don’t really know, what type of aircraft they go to or what customer they go to. It does matter what type of material are used in those cores. And therefore, as you, I think, know is the core manufacturing has been taking on quite a different completion over the last two or three years, in terms of the increase in requirements to the ceramic-based cores.
So, I think that probably deals with that and then say, structures wheels, there’s no – again, commentary on that like a wheel is – just goes to because we control not only the brand, but we control the design is that our wheels plants are in different to which end markets, which trailer or distribution and need which customer. So that’s a good place to be in, not to have customer dedicated plants and the most difficult while we manage is narrow to wide in the fastener business. Second part of your question was my plans. Well, I can’t say I’ve got any plans, particularly at the moment. I’ve always said to you, as I said that the pleasure of the Board, I’ve always been wanting to see Howmet through – I’ll call it, the aerospace recovery just that we never quite get to the good recovery part of it yet.
So one day, there’s going to be a really good time when – as I talked about in the press, the stated Grace, which I said maybe it will get second half of 2024 or early half 2025. And it just didn’t happen in right now. it’s – I don’t think any of us expected the Alaska Airlines incident and the concomitant effects on production and where we are now and also now the 787, so things are not smooth. And that’s the case for both Boeing, in particular, but also Airbus. So I’m convinced it will get better. And one day, I’ll tell you if I have a plan. How is that?
Gautam Khanna: I appreciate it. Thanks, John.
John Plant: Thank you.
Operator: The next question is from Ronald Epstein with Bank of America. Please go ahead
Ronald Epstein: Hey, good morning.
John Plant: Good morning.
Ronald Epstein: Yes. Hope you’re doing well. A question we get and we’ve heard maybe from some of the engine OEMs is that the supply chain needs to make more investment to have the capacity for the upcoming ramp, right? As you highlighted in your remarks that when Boeing does get back to rate, the number of LEAPs just be – it’s a huge amount of growth. And one of the areas that they’ve suggested that investment needs to be made is in tooling. Just curious your view on that and how you’re thinking about CapEx for this potential ramp going forward?
John Plant: Yes. So what I said previously, maybe I’ll just amplify a little bit today is that we said we were going to take back CapEx. And so if last year was probably just over $200 million. I think the midpoint of that guide now is around $300 million, it could be $290 million, but $300 million, give or take, I think, in that region. So maybe just below $300 million. And I think that we’re going to spend all of that this year. And there will be an elevated investment requirements in 2025 as well. And essentially, that’s because, yes, there’s a large increase in aircraft engine, both I think, for commercial and for defense. Because defense you’ve also got all the new rotorcraft programs or re-engineering of certain things, I think you heard of it, we talked about before.
And so those investments are absolutely required. And so you can assume that the investment is a lot more than the $100 million increase that I talked about, and let’s assume it’s something getting close to the $200 million, which if you think about that plus all of the additional facilitization and hiring, it’s a big bill. And that was essentially focused to one of the engine companies, I talked about last time. Because of our increased share that we’ve locked in for the next few years at that company. And hopefully, more to come. It’s because a good, strong, solid business. You’re seeing margin rates improve year-after-year, and you’ve seen another step forward this year. And I think in balance [ph], which we’re trying to hold it now and then maybe we’ll make further improvements as we go into next year.
But given the demand profile. But at the moment, it’s clearly one where there’s a willingness to invest because of the, I think, returns in that business. And I think the industry needs it as well. So that’s where we are on that. And probably a little bit more of a muted investment, for example, in our structures business. So you’ve heard me talk about titanium where to answer the question you haven’t asked, we’re still increasing production. You’ve seen that in the revenue numbers. We’re taking the share we’ve talked about and the increments we talked about as a result of the sanctions on VSMPO. So less occurring. But again, I’m not willing to put fresh capital in the ground for that given its long duration to come on stream and also the geopolitical risk that I’ve talked about in the past because we don’t know what’s going to happen, not even what happened after the election this year.
Ronald Epstein: Yes. That makes sense. Thank you very much.
John Plant: Thank you.
Operator: This concludes the question-and-answer session, and the conference has also now concluded. Thank you for attending today’s presentation. You may now disconnect.
