And then kind of when we look at the go forward, how do we think about this restructuring and how it impacts the business with your vertically integrated steel mill because I think volumes really need to run through that to make that profitable. So just kind of connecting all that aspect is the question.
Mitchell Dolloff : Tyson, I’m happy to hand that over to you.
Tyson Hagale: Sure. Thanks for the question, Bobby. So I’ll start just with the Open Coil part. We have seen just a long-term trend down in that category. Some of it has been just a shift from our customers from Open Coil to ComfortCore. So there has been — some of that drag on Open Coil has just been a shift. There has been some different sourcing options, especially during the pandemic when things were short. And then there’s also been some differences in U.S. steel costs versus Europe. So we have seen some growth in imported innerspring, especially on the lower end and then Open Coil. The other part you didn’t mention but does get wrapped up in our volume around innerspring is wire grids. And that’s been a significant decline in overall volume.
And that’s more of just a shift in consumer preference in type of foundations. So that also is impactful in overall volume in our innerspring business. The other part of it, back to rod mill, you’re absolutely right. I mean volume is a critical part. As we have seen the Open Coil decline in wire grids, a lot of our products that go into ComfortCore also consume more wire because we have products that go fully to the edge, replacing some phone components. So there is still a an offset, even with fewer units, we are still driving tons. And right now, it is a big drag because overall it’s the market where we are, we do have open capacity at the rod mill. But between market recovery and some of our efforts just to diversify out and selling into some industrial markets, we still feel good about the overall capacity utilization at sterling.
Robert Griffin: I guess two follow-ups on that, Tyson. I mean the different sourcing options that are popping up, I’ve noticed as well kind of just checking the industry. Are those — is there a way to compete better against those? Does — do we need to have lower pricing or do we have some type of different product offering to compete against the different sourcing options to maintain those customer relations? And then just more of a financial question. Hypothetically, if the rod — or I guess not hypothetically, if the rod mill goes back to full capacity, what does that benefit? What is the drag on segment profitability from the rod mill running at partial capacity today?
Tyson Hagale: Sure. Yeah. So to your first question, yes, I mean, our biggest job is to help our customers succeed. And so we want to make sure that we’re giving them options to compete with especially just low-priced goods. So we will help them with VAV opportunities even on the low end, but also offering them different product options that help them compete there. I mean our restructuring effort is a big part of that as well. I mean us becoming more efficient utilizing our assets in a more efficient way in distribution is in a large part to serve our customer better and help them succeed. So all of those things factor in. I mean, definitely around the innovation, trying to do the VAV work and just in the different options is a way to help offset some of those low price options.
And then overall, I mean, not just in the rod mill, but running all the way through our vertically integrated rod wire spring value chain and also at ECS, the volume has, by far, the most significant impact to our margin profile. So that would be the biggest driver of recovery overall for the venting (ph) segment.
Mitchell Dolloff: Tyson, maybe just to add on there. So a little bit in the — what you talked about is refocusing our strategy and not just focusing on volumes. So if we talk about the Open Coil opportunities are after [indiscernible]. We could go chase pricing, but that comes with our risk, right?
Tyson Hagale: Definitely.
Mitchell Dolloff: In terms of some of the financial stability to [indiscernible] participate in the market today and just what the margin proposals of those products would look like. Do you agree with that?
Tyson Hagale: Absolutely Yeah.
Robert Griffin: Perfect. And I guess, Mitch, switching gears here, and sorry just to kind of zero on our margins, but I think that is the kind of the debate over the next couple of years. A lot of news in the bedding products and getting that restructured differently, specialized roughly a 10%-ish EBIT margin versus historical high-teens levels, auto production globally is coming back. What is the other aspects that need to happen there to rebuild the margin profile of that business over the next, call it, one, two and three years?
Mitchell Dolloff: Yeah. Thanks, Bobby. I think that we have been making progress as we’ve gone through the last couple of years. We’ve seen still a lot of dynamics in the automotive industry, but we definitely see volume coming at back and that’s helping and we see improved margins and in automotive we still have work to do and room to make those improvements, but we’re definitely on the right path. Similarly, although, it’s smaller in aerospace, very strong backlogs in the industry. So that volume will continue to come back, again, not as just as large of an impact as automotive, but it certainly will help. And then we’re seeing a little bit of a challenge in the year — in this year on hydraulics, where there’s really strong backlogs, both in material handling and heavy construction markets.
And we see, the strong backlog at least through the first half in the U.S. on the on that part of the market. But the heavy construction side in Europe, particularly in Germany, it seems like it may be a little bit more challenged in demand. So we’ll see some ups and downs. But I think that the progress that we’ve made over the last couple of years in specialized, I think, demonstrates our confidence in the ability to return back to a higher margin profile, certainly, maybe it doesn’t go back to the peak margins that we had. But certainly back to the higher margin profile that will provide a lot of benefit to the company.
Robert Griffin: Okay. I appreciate the details. Best of the luck here in the first quarter.
Mitchell Dolloff: All right. Thank you, Bobby.
Operator: Thank you. [Operator Instructions] Our next question comes from the line of Peter Keith with Piper Sandler. Please proceed with your question.
Alexia Morgan: Hi. Good morning. This is Alexia Morgan on for Peter Keith. My question is on anti-dumping scenarios. I know we’re expecting a decision later this month. Can you give us an update on antidumping legislation? And then what are the best and worst case outcomes that you’re thinking about once there’s a ruling?
Tyson Hagale: Sure. This is Tyson. I’ll jump in and tackle that one. So yes, we’re a part of that. And kind of what we said in past cases, the U.S. industry just needs a level playing field, and that’s really what the industry is after. No matter which scenario we think might play out. We fully expect to see some level of imported mattress activity. It may move around to some different countries. There may be some shoring in the U.S. for former importers. But we still see that dynamic playing out regardless of scenario. It really is difficult to say how much will come back to U.S. producers just given potential moves to other regions. Also right now, things are a little muddy just because ahead of a potential decision. We have seen a higher level of imports over the last couple of quarters, just I think with some of the importers attempting to get in ahead of any impose duties.
So that will take some time to work through, especially in a really soft market. So we’ll see what kind of overhang there is in kind of the near term. But overall, I think we would see just that kind of helps support the continued hub of the industry. So overall, I think we’d say it’s still to be determined how much impact would come back to the U.S. producers.
Alexia Morgan: Okay. Thank you. And then my next question is related to spring and foam pricing. Is there any deflation within those categories? And then any deflation baked into the sales outlook?
