Matthew Elkott: I just was hoping to get some comparison between access to labor between the different regions. I mean, I think you answered that the Northwest may be a bit more challenging, I guess, than the rest of the country. But I also want to kind of ask you about what’s your — I know it’s difficult to say — to put a number of capacity — annual capacity numbers because the cycles differ and the types of equipment produced affects that number. But after the closure of Gunderson, how much annual capacity would you say you would have in the U.S.?
Lorie Leeson: I don’t — I think as we’ve talked about our capacity numbers, and I don’t — Jeff will have to correct me if I’m wrong, but I don’t think that as we’ve thrown out what I would a theoretic capacity for the North American market, we’ve probably not been for the last several years, assuming large numbers when it comes to the Portland facility just because we have been operating at a more modest rate. There was one other thing that I thought about in your — the earlier part of your question and thinking about our decision for ceasing railcar production in Portland. Part of it is also where our customers are and where our competition is. And as we need to be able to be competitive in the broader market, cost-wise for our customers, there has been kind of this transition to the middle part of the country and south which is also very good from a logistics and transportation perspective to get our equipment to the customers that want to use it.
So that also weighed into the decision that a location in the Pacific Northwest does have some difficulties as you’ve seen more and more freight moving to East Coast ports and the like.
Matthew Elkott: Yeah. Makes sense. And then I know most industries are having supply chain issues, but it seems a bit more pronounced in the case of the railcar industry, Lorie. Do you — I mean, first of all, is that the case? And second, why is that? I mean we’ve heard that maybe because of a more limited pool of suppliers on the component side. But are there any other factors that are specific to the railcar industry that are making the supply chain issues subside at a slower rate than maybe some other industrial areas?
Lorie Leeson: It is a little bit head scratching. I would say that it’s likely because we and some of the others in the rail space have been ramping up production. So we are putting some pressure on that supply chain that they didn’t have over the last two years. I think, quite honestly, in the rail freight OEM space, we’ve been — overall, I’m sure that my procurement folks are going to kick me after this. But I would say compared to the rest of the country, we haven’t had the big disruptions. So I think it’s as we and others in the industrial space ramped up over the last four to six months. It’s really putting that pressure on that supply chain to be able to be responsive.
Matthew Elkott: Got it. And then just one final question on margins. This is taking a long-term view. All the changes that you’re making, Gunderson and then the leasing. Does it change your outlook — long-term outlook for what kind of gross margin you can get?
Lorie Leeson: I think these are all steps that we need to take on the journey to having solid double-digit low — in the teens, margins on a regular basis is to look through our organization and determine where we can strain more efficiencies and costs for the business to generate that sort of return. So from my perspective, I and the leadership team, we look across the organization, and we’re identifying the areas where we can start to take some action, and we’re taking that action. Some of it is going to take a little bit of time. But we’ll do our best to be transparent with you and our shareholders about how we’re — what — the steps that we’re taking, but it’s all towards that longer-term goal of having those steady margins.
And I would say, truly higher highs and higher lows. So having the lease fleet will help, I believe, to take some of the trough out of the low cycles when it comes to railcar manufacturing. Potentially, we have a couple of years here of some steady demand on that side of the business, which will allow us to really look through the operations and see where we can continue to optimize them.
Matthew Elkott: Great. Thank you, Lorie. Appreciate it.
Operator: The last question today comes from Steve Barger with KeyBanc Capital Markets. Please go ahead.
Steve Barger: Thanks. Good morning, everyone.
Brian Comstock: Good morning, Steve.
Lorie Leeson: Hi, Steve.
