Patrick McCann: And I think Swamy, just to add to that. So Swamy, you’re exactly right. So relative to expectations, we underperformed and that’s what drove the decrease from the $550 million down to the $530 million. Mark, on a year-over-year basis, you’re correct, where we do have pediments on a year-over-year basis. So relative to expectations we outperformed on a year-over-year basis all for the quarter.
Mark Delaney : Okay. And just one last one for me, if I could, please. The warranty expense, I believe I heard it’s contained to ’22. So you’re not expecting that to be an issue in the ’23 guide. This underperforming facility, maybe you can elaborate how much of a headwind do you expect that to be this year? Thanks.
Patrick McCann : Relative to ’22, Mark, the operating facility in Europe is expected to be a positive. So as we said earlier, we have the headwinds of 2022, relative to expectations. We move into ’23, we’re seeing improvements. We have this is full focus. We have a team dedicated to it. and we’re driving to execute everything Swamy is talking about as far as increasing capacity, reducing the outsource, and we’re seeing the benefits of those actions take place already, and they’re going to continue to improve both throughout the year.
Operator: Our next question is from the line Itay Michaeli with Citi. Please go ahead.
Itay Michaeli : Great, thank you. Good morning, everyone. Just two questions for me. I was hoping we could go through some of the segment margin walk on Slide 30 and particularly on a complete vehicle assembly for ’23 and 2025. And then just secondly, hoping you could also comment on kind of what you’re seeing the latest on overall production volatility by region and whether you’re starting to see any signs of stabilization that kind of supports the outlook for improvement in Q2 and beyond.
Patrick McCann : Good morning, Itay, it’s Pat. I’ll start with the first one as far as the margins in complete vehicles, and Swamy can jump in on these schedules. So looking at the complete vehicles, the margin from 2022 into 2023, there’s a few factors that are driving that. In ’22, we did have — we did benefit from some customer settlements and licensing income, so we have licensed out at EE architecture. Both of those are expected to recur in 2023. Those two factors are a negative drag of about 70 basis points. The second bucket I would refer to is we do have higher input costs. This is an operation in Europe where we do have significant labor and energy headwinds. And at the same time, we do have engineering program specific costs that are accelerating in 2023 versus ’22.
Those two factors combined for about a 90 basis point impact. And then obviously, as we’ve discussed previously, we’re transitioning that facility as we move certain programs out and launch new ones. And those costs are a drag on earnings just by the nature of incurring costs and lower revenues.
Itay Michaeli : Terrific. That’s very helpful. And maybe just a comment on the production volatility.
Swamy Kotagiri : Yes. I think the production volatility in terms of a couple of programs, right, significantly lower than what the expected volumes there. And we always plan to some degree, launch-related costs where there’s more than estimated, sometimes I’ll just go through. And I think there is a little bit in terms of that level of cost associated with this transition that’s been a drag.
Itay Michaeli: Got it. Perfect. Thank you, that’s very helpful.
Operator: Our next question is from the line of Colin Langan with Wells Fargo. Please go ahead.
