Brent Yeagy: Yeah. I think when you look — I mean, first off, Mike, you know as well as I do, we saw yet to unfold what will happen in the world around us, both globally and domestically. So I can’t speculate on what might happen. But what I will say is that if we can keep to one, worst case two, Fed rate changes. I think we’re in a decent place for us to anticipate that overall freight has the ability of recovering to a degree that allows the strongest players in the industry to move forward with their growth we’ll call it aspirations and strategic direction in 2025. Those happen to be the customers we tend to do business with based on the backlog/customer portfolio, we create we’re in conversations with those customers to understand how they view 2025.
That’s more important. That’s about how we view, it’s more about how they view it. They view it as a 2025. I would say, differently. The tail end of 2024 should start to be bit give them the confidence to lean into 2025 as they look to gain market share, while everyone else is somewhat still really from the trough that we’re in right now. So that’s why Wabash is so pointed in preparing itself to be ready at the, call it, earliest notice to respond to that demand signal when it comes. We think that will actually come a little bit ahead of what the overall market will be signaling based off the customers that we do business with.
Mike Shlisky: Understanding. Can I just squeeze one last one in here. Can you update us on the impact of the UAW strike on orders of your business? I guess, on the truck body side, has there been chassis supply issues, they’ve been exacerbated over the last couple of weeks. And on the trailer side, are you getting a sense that some of the fleets are holding off on ordering, because they’re not sure if there will be excess capacity if there’s no auto parts components and autos themselves being shipped around the country.
Brent Yeagy : Yes. I’ll take the last part of the question first. I don’t really believe yet we are seeing a significant impact in any type of 2024 order behavior based off of what’s going on with the current state of the UAW strike. I’m not going to quote them all, but I think there’s a series of metrics out there, at least that I’ve been exposed to that say that we haven’t really even seen truly material impacts of the UAW strike in terms of real freight impact. We also know that it’s not a, what I’d call, full strike yet. It’s more of an iterative process that they’re going through. So I don’t think it’s material yet in any decision-making. And I don’t think it would be until we get into something into the first quarter or to last that long.
And even then, it might be somewhat limited to the carriers at which it really does impact, okay? It’s not a high item on that front from a risk management standpoint for Wabash’s demand profile. When we think about it from a truck body standpoint, we’ve had a limited impact, and we probably will see what I would call limited incremental is not the right word, sporadic impact in 2023 that we’re able to maneuver around that is a nuisance, but I wouldn’t call it a headache. If this were to get into 2024, so this is again a first quarter protracted more full. We’ll see a larger amount of impact. But we’ve got enough lead time, good or bad because of the way they’ve done this with the incremental nature of how they’re rolling this out, not taking them all to their needs right at the moment.
We have plenty of time to adjust in how we demand plan to fill the first half of the year to move away from the chassis pool, Big 3 supply, call it, line of businesses, there’s enough other out there, specifically during the first half of the year that we’re able to maneuver accordingly. So while it may operationally change how we do demand management, at this point, I would not see it being a material impact on the actual output of Wabash.
Mike Pettit : Yes. I think just to add, Brent mentioned there, but just double click on it. We do have a pretty significant percentage of our truck value build is medium duty and not dependent on the Detroit 3. So there’s a lot of our mix that isn’t impacted at all.
Mike Shlisky: Great. Perfect. Guys, I appreciate the color. I’ll pass it along. Thank you.
Mike Pettit: Thanks, Mike.
Operator: Your next question comes from the line of Jeff Kauffman from Vertical Research Partners. Your line is open.
Jeff Kauffman: Good morning, guys. Congratulations.
Mike Pettit: Yes. Thanks.
Jeff Kauffman: Thank you for the view. So I hear your message, which is rest in 2024, you’re seeing the numbers already. We’re going to use that rest to make our business stronger. We’re going to have a better bottom. You talked about the big announcement today in parts and services as well, and that will be bigger piece of the pie. So two questions here. Number one, you’ve ceded a little share over the last year because you took the factory down to do the transition for the dry vans, you move reefer up to Minnesota. So you’re on track to do about 45,000 trailers this year, give or take. So based on what you’re saying, is it possible that even if the total trailer industry is down 15% or so next year. I don’t know what the real number is going to be, that you could potentially still be making about 45,000 trailers as you ramp up reefer and you ramp up this new capacity and dry given some of your market opportunity. Am I thinking about that wrong?
Mike Pettit: Well, Jeff, as always, you asked very astute questions. What I would tell you is — I’m going to correct one thing, no.
Jeff Kauffman: Okay.
Mike Pettit: The set we ramping up of our dry van manufacturing and the transition of reefer really has had no real impact on what I would call our literal market share as we think about 2022-2023. What I would call any gross material way that affects 2024 at all, right? I know there’s some math in between, but it really doesn’t. When we think about market share in 2023, this is much more about a deliberate management decision to drive pricing, to maintain pricing in the second half of the year based off of the level of demand in security that’s been caused by the overall freight conditions. We felt as an organization as the premium supplier into the market that maintaining pricing was paramount as we move into the order season for 2024.
It also just happened to match the level of capacity smoothing that we needed to do to prepare for 2024. And so there’d be no reason to chase pricing in order to run up against a hard stop and then an inefficiency hit going into 2024. That would not be the smartest business was on the plan. So when we think about market share in 2024, I think you’re absolutely in the ballpark of the market share is inherently available for us as we adjust our pricing to still be premium in the market, still be at a much higher level than what we’ve seen over past cycles, will be in a nice place that we can maintain plus or minus, probably in that range that you’re alluding to with the capacity that we’ll have on the ground starting 2024.
Jeff Kauffman: Okay. Thank you. And then just following up on that, and I want to follow-up Mike’s question on — is 24% just a single backward year. And of course, none of us know but I’m thinking about this big EPA mandate out there for the fleets in 27, which means you probably get a tractor pre-buy of some kind in 2026, it may even start in 2025, and we all know that unfortunately, in that situation, even if truck P&L is better, you may get a crowding out of capital for trailers, maybe, maybe not, right, who knows. But I’m just thinking about the shape of industry demand for the next few years, 2024, we’re going to get a respite but 2025, we probably still see a little bit of a respite in the early part of the year, then it starts to get better.
