Andrew Wall: Yes. I think the only thing I’d mention just for a little bit more color. If you look at the projection on the slide that I had on the automotive side, it is a 4.6% jump year-over-year. but we’re still looking at — still short of where we were in 2019, pre-pandemic, right? So the context of that, I think there’s certainly some pent-up demand. Of course, the wildcard for it all is the potential risk of a massive recession, right? I think that’s the one thing that is hard to predict, but I think you outlined it well, where we’re at. So thanks.
Operator: Our next question comes from Tom Kerr from Zacks Investment Research.
Thomas Kerr: I think most of my questions have just been covered. Any update on the China operations? Is that back to business as usual or any news there?
Warren Veltman: Yes. Look, I would tell you that we had, what I would characterize as a pretty significant interruption in our business right near the end of the fourth quarter when the zero-tolerance policy went away. At one point in time, we had I think 70% of our employees were out with COVID between our JV and our wholly owned. But the interesting — I think the interesting aspect of it is they were out for a week, a week to 10 days or what have you, and then they were back to work. And they kind of snapped back. I would tell you, snapped back relatively quickly after the first week of January.
Thomas Kerr: Okay. That’s good. And then on sort of margin progression — sorry if I missed this, but looking out quarter-by-quarter during this year, how do we look at gross margin recoveries? Is it a later-half-of-the-year type situation? Or is it steady throughout the year?
Michael Felcher: Yes, I’ll take that. I mean, I think you’re going to see sequential improvement as we go through the year, certainly accelerating in the second half, I think for 2 primary reasons. One, we’ll have the benefit of the 5 facility closures that will be completed in the second quarter and that will be encompassed in our run rate in Q2 and then fully in Q3 and Q4. And then the 2 facilities Warren mentioned, we still anticipate some impact to those facilities, particularly Mexico in the first half of the year and that improving in the second half of the year. So those would be the 2 drivers and then also some sequential volume growth as we go through the year. So we would expect margins to be improving sequentially quarter-to-quarter through the year.
Operator: And our next question is a follow-up from Steve Barger from KeyBanc Capital Markets.
Robert Barger: Just another pricing question. You talked about the 5% price increases on new POs not tied to long-term agreements. What percentage of revenue is tied to LTAs? And do you expect you’ll build in escalators into LTAs in the future?
Andrew Wall: Yes. Steve, Andrew Wall again. So if you look at the business, Power Solutions, about half of that business is under some kind of formal agreement and the other half roughly is not. So that 5%, call it, $100 million, $105 million in that range. And then the other half of the business is under some term of agreement. Yes. I think your second question by way of the inflation of last year and things of that nature. We’ve incorporated both material and nonmaterial inflationary provisions inside of the contracts going forward. So we have mechanisms to exercise when those events do happen and that’s what we plan to do going forward.
Robert Barger: What’s the average term of the LTAs that don’t have escalators built in?
Andrew Wall: The average term you mean?
Robert Barger: How long do those contracts run before you can build in escalators?
