Lear Corporation (NYSE:LEA) Q4 2022 Earnings Call Transcript

So it is used in a very collaborative way with our customers to help offset some of the issues we’ve been talking about. And I think the customers have been receptive to working with us given some of the different situations that we’ve been able to help them out with either through supply or through launch or through production. So it continues to be a relationship game and making sure you’re balancing between productivity and some of the issues that you’re confronted with on the cost side.

Unidentified Analyst: Okay. Cool. That’s helpful. And then lastly, just on labor. I think you called out $85 million impact in 2023. I think recently in Mexico, there was a minimum wage increase of 20%. Is that baked into that $85 million number?

Jason Cardew: Yes. It’s one of the factors baked into that. And the minimum wage increase of 20% has sort of an indirect impact on us. Most of our — for many of our wage groups in Mexico are well above the minimum wage. And so there — it creates some compression in the wage scales, but it’s not a 20% increase per se in our Mexico labor rates across the board. It’s less than that.

Unidentified Analyst: You call it like 10%?

Jason Cardew: I’m not going to get into a specific percentage for that market.

Adam Jonas: Sure. Thank you for taking my questions.

Ray Scott: I think that’s it, and probably the only one left on the phone now as the Lear team, and I just want to again say thank you for your incredible accomplishments last year. It’s amazing what the team has done collectively around the world. We’re going to have our challenges this year, but I know this team is absolutely capable of continuing to accomplish some of the great things we did last year. And I just want to say thank you for everything that you’re doing.

Operator: And ladies and gentlemen, with that, we’ll conclude today’s conference call. We do thank you for attending today’s presentation. You may now disconnect your lines.