Chris Mapes: Yes. Mig, let’s start with the cobots, which is a great question. And I will share with you that as it relates to the financial profile of Lincoln Electric, the cobots are probably not going to have a significant impact. The bigger impact is the acknowledgment by the customer that Lincoln Electric is a solutions leader and we are going to Lincoln Electric to assist us with these solutions, which many times our entry-level automation projects inside manufacturing force. So, it’s the acknowledgment of us in our leadership position with this solution. That’s what excites me about the cobot piece. And then I will tell you, we have not seen any change in the activity level of interest on the automation side. Our activity has stayed very strong, and I think it’s not that complicated.
At the end of the day, we are seeing an increase in the cost of capital. We are now where we see the 10-year at a near 5% rate. But we are also continuing to see inflation and a lot of that inflation on the labor side that you are seeing it near the 4% rate. And so quite frankly, the economics around the need to drive automation because of either a scarcity of labor or cost of labor has not diminished. And I believe we will continue to see that trend for the foreseeable future as we have been sharing with you and our thoughts on the automation business. So, to-date, not now the business because of the size of the business, it does have some choppiness to it at times because of the way you may have large orders that moves through the business.
But as this business continues to grow and we have enormous confidence, and ability to achieve that 2025 higher standard target, and our willingness to continue to invest in this business both organically and through acquisitions, we think we are well positioned, really love the impact it can have on our portfolio, not just for our customers, but also the excitement it brings inside our organization.
Steve Hedlund: And Mig, this is Steve. I can’t resist the opportunity to give an advertisement for our product and the kudos to the teams. But you know at FABTECH, everybody and their brother has a cobot out there in the market. And getting the torch to the work piece by dragging the arm to it is the simple part and everybody can do that. The challenging part is, once you have the torch in place, you have about a dozen welding parameters you need to set to get a good weld. And so you are still relying on the operator to have some knowledge of the welding process. And our Cooper software app basically automates all that and allows you to pick a picture of the welds you want, is it big or small, is it thick or thin and then we do the rest.
And that’s what the market is really reacting to as Lincoln as the welding experts bringing solutions that makes their life easier to deal with these labor challenges. And it’s not only the scarcity of labor, is the quality of the labor that you can get in a factory these days. So, you have got to make it simple for people to use and the market’s reacting to that.
Mig Dobre: Alright. Appreciate the color. Thank you.
Operator: Thank you. Our next question will come from the line of Steve Barger with KeyBanc Capital Markets.
Chris Mapes: Good morning Steve.
Operator: Our next question will come from the line of Walter Liptak with Seaport Research.
Walter Liptak: Hi. Good morning. Can you hear me?
Chris Mapes: Yes, Walt.
Walter Liptak: Good morning. Congratulations on the quarter. I wanted to ask a clarifying question, too, about the Americas next automation and what you are seeing with the pickup in October. Maybe could you talk a little bit about where you are seeing the pickup? Is it for consumables? Is it for machines? What sectors? Is it that, are we ready to go through a channel restocking? Just to clarify a little bit.