Joe Giordano: Yes, that’s okay. With respect to the new — the ramp-up of Decatur and things like that, like — what do you need to see to kind of know that you’re on the right track? Like how far into the year or like what kind of trigger points along the way kind of give you comfort that, okay, like this is progressing, how we need to see like this is going to work?
John Hall: Yes. I mean we meet every week, how many parts are PPAP, where is that on our PPAP schedule? Of those parts that are PPAP, what’s the machining trials going like? If you look at our 4K process, you start out kind of with a dimensional answer and Gate 2, you get into whether it’s form fit function porosity, all of those things in machining and then your date free as a game around that some significant volumes and then Gate 4 is machining and significant volumes and looking at tooling wear or things like that. So we know where we need to be to get those top 170-ish parts that I talked about in our last quarterly call through by the end of March. In my prepared comments, I said we’re on track for that. But there’s a thousand things that can go right and wrong in these next 90 days.
But at the end of the day, our exit rate at 2023 of pounds produced pass to approach somewhere between 50,000 and 70,000 tons a day. And we get into that 60 range at the new foundry and we can afford to then shut the existing founder and satisfy all of our customer demands and all our internal demand. So I don’t know how to really answer your question other than to say, one thing gone right, another thing will go wrong. At the end of the day, you would react and adapt, react and adapt, react and adapt to ensure that you get to the capital project targets And that’s what we’re focused on. And so yes, there’s a huge part of our margin improvement. It comes from avoiding the outsourced premiums we’re paying because of our inability to produce brass.
And that’s job 1 in this project execution.
Joe Giordano: Can you maybe speak to like what the cost differential is between these outsourced products that you have to bring into what at scale the cost would be internally?
John Hall: Absolutely not. And it’s not because I wouldn’t it’s that, obviously, you have multiple partners and I don’t want people trying to infer you’re paying this premium here and that premium there. They obviously know what we’re paying. So no, I’m not going to get into the spreads of premiums. I’m sorry.
Joe Giordano: And last for me. You mentioned your expectation for housing starts for the year. Can you kind of maybe compare that to what you think lot development will look like this year?
John Hall: Yes. As I said in my comments, look, we still believe that a lot of inventories and even options on loss. I know a lot of the builders are talking about in their prepared comments now what their option portfolio looks like. It’s still, I think, if you think about a 1.4 million housing start year and then you try and back into that which we try to do but it’s more art than science, unfortunately, because people don’t publish the numbers. We still think a lot of inventories are relatively low and that there’s not a huge backlog of developed lots for the builders to sell either spec or custom order or homes into. And so I guess the way I would describe it is after living through the 2007 overhang as a business, I wasn’t here but certainly, lots of people work and how long to work off that overhang, this one looks like it will be measured in days or even weeks but it’s not going to be measured in years.
And so the inventory is I think at a much, much lower level than it was in 2007 by a factor of 2 or 3.
