Jagadeesh Reddy: Yes. I would say that typically, it’s about a year when the markets sort of go down and then cut back to normal levels. We’re expecting, obviously, right, 2024 to be the down year. Even looking at quarter-by-quarter, we expect the softness to sort of hit mid-year and second half to be a little lower than first half of next year. And then 2025, the volumes are expected to come back up to normalized levels. So I don’t think we have a number from ACT yet. But our expectation is going to be somewhere north of 300,000 in 2025. Actually, I do have a number from ACT. The numbers are in 2025 are expected to be around 316,000 units. 2022 was 316,000. 2023 is the 336,000, and 2024 is the 274,000, right? So you can see that dip. So there was a pull-in 2023, pulled back in 2024 and then back to a normalized level of 316,000 in 2025.
Operator: [Operator Instructions]. We now have Tim Moore of EF Hutton.
Timothy Moore: Thanks for the Investor Day goals and those incredible bridges for your road map for EBITDA margin expansion and free cash flow. I just had a hypothetical question to start out here. Regarding the auto worker strikes, and if something like this occurs next year for a different end market or even a large customer disruption, then maybe there’s a mild recession in the spring or something, how much flexibility do you have to maybe shift some of the capacity or installed work to other end markets to backfill that in and cut overtime costs? Because I think you might have said on Investor Day about 20% overtime mix, but maybe you could flex it to 10%?
Jagadeesh Reddy: Yes. Great question, Tim. Yes, we were averaging approximately 20%-ish of overtime in many of our plants. Our long-term goal, our target is to be around 15% or so flex time or overtime rather, right? So immediately, we can shut off overtime. And also, we have the flexibility to freeze hiring. We still have about 100 job openings across the company as we speak today, and we can quickly free some of those hiring plans. But also, we have the flexibility to switch our operations from producing from one end market to another end market, given that majority of our plans, in fact, outside of 2 plants or a majority of our plant, 18-plus plants, we can make parts for any end market. So that gives us the flexibility to quickly switch our customer focus or end market utilization of those assets.
So those are the levers we have. And we — no one expects any Black Swan events or anything like that in the near term, at least we don’t know. But if something like that happens, we have the ability to quickly switch gears and shift our focus.
Timothy Moore: Great, Jack. That’s good contingency planning. And nice to hear a lot of companies actually can’t do that, but were as easily. What about Jag, now that you mentioned Kaizen, you spend time on all your plans to implement MBX, how would you kind of quantify maybe what inning your value base and strategic pricing is? Is it mostly implemented for contract pricing fresh start in January? Or do you feel like you won’t really fully achieve that maybe to the next summer?
Jagadeesh Reddy: So a couple of things. We’re just getting started on our MBX implementation and our Kaizens are ongoing every quarter, every month in every plant, right? So that’s a journey. So now were done with that. So I’m excited. In a couple of weeks, we’ll have our — in a few weeks, we’ll have our Q4 President Kaizen. We’re going to do somewhere between 4 and 6 Kaizens across the company in Q4. So pretty exciting events coming up for us. In terms of pricing, Tim, we implemented through our commercial excellence activities and TPI Kaizens a programmatic approach to value-based pricing. What that means is we have a new framework on how we think about pricing. It’s everything including cost to serve, right? Customers payment terms to complexity of their products and manufacturing processes.
