How's it going, everybody? Really happy to have Magna, our representative up here, Pat McCann, Executive Vice President and Chief Financial Officer, and Louis Tonelli from Investor Relations. Thank you both for being here. We were talking about the drinking water in Sudbury. We can continue that conversation another time. A lot going on, and we have, obviously, as you foreshadowed a few months ago, potential strike action, which we'll get into, but putting that aside for a second, what are some of the key messages you have for investors today? I'm not sure if you listened in last week. So we did an investor update- Mm-hmm. Last week, and it was really focused on, we closed the Veoneer transaction. So that's a big transaction, and we're focused on three pillars. It was an update, and we're focused on megatrends. So where's the car gonna be growing? You know, really talking about EV, ADAS, and those are the two big ones. You know, there's various categories within it. Then, but really, if you take a step back where we've been coming from, Magna's a manufacturer, and with the inflation in the system, getting back to basics, focused on cost improvements. So we're seeing, you know. So we're focused on driving margins up through 25%. Mm-hmm. We reiterated those, and I'm much more confident, you know, where we are this year, sitting here, than we would have been a year ago with where we are with the inflation and all the cost improvements. Yeah. I mean, we got $10 billion of sales- Mm-hmm -growth, so lots, lots of growth to, to launch in the next few years. And I guess the other thing was the, the balance sheet, strong balance sheet, bringing our leverage ratio back down by next year, the important message that we have. Yeah. Same capital allocation principle apply. Strike does add a little bit of volatility, but if I ignored the strike, potential labor disruption for a moment, any comments on the quarter, and your kind of rest of your production outlook, and then we'll kind of talk about strategies? I don't think we like, we're not in the business of updating quarterly. You know, my takeaway from the quarter would be, you know, I think we had a really strong Q1. We outperformed in Q1. I think we outperformed again in Q2. So we're building a foundation of walking the talk, right? And we're talking about increasing our outlook from 2023 to 2025 by 230 basis points. Mm-hmm. It's the traction, the execution, the credibility, is be my focus. So, latest thoughts on electrification, we've had a couple car dealers up here today saying it's slowing down. But of course, non-Tesla dealers. But even Tesla, I mean, if you look at them, they've cut price almost 30%, and they're gonna deliver the volume that they thought they'd deliver at the start of the year. No more. No less, but no more. And their margins are, their gross margins are almost half where they were, a little over a year ago. So are we seeing some growing pains here? I don't know if you, you know, as you build out your electrification portfolio to support your customers, we're curious your thoughts on whether you think that some OEMs may have overpromised or maybe got a little ahead of themselves in the pace of adoption in some of your key markets? My starting point would be electrification. Electrification is coming. Mm-hmm. It might be a little bit slower than people have projected, but when you look at Magna's view of EV penetration rates, I would say we're more within the norm. Mm-hmm. We're looking at penetration rates of about 24% by twenty- globally- Yeah ... by 2025, and about 34% by 2030. So we're not really seeing this, there's gonna be no ICE by 2035 type view of the world. You know, that being said, it's important to get onto these programs, and it's having the optionality of how do we make sure that we have our ICE business, it continues to grow, so we can have optionality there, but where are you selective on the EVs, and which platforms are gonna succeed? And Louis and I have talked before, Adam, is once you get into, like, the frame business, if we compare getting on battery trays or eDrive, our view is once you get in, you get the first generation, you get successor generations. So if you go back to 1997, we started building the T800 frame- Mm-hmm ... and we're still building that frame today, and we're gonna be building it presumably for the next 10 years, you would think. Mm-hmm. When you think about the portfolio on the electrification side as enablers, you know, for your participation in the long-term trend, what kinda gets you most excited between, you know, packs and trays or structural components? I'll start- Jump in ... but- Of course ... I think we're not really in the pack or cell business, so we wanna take what we're, we're good at, Adam, and how do we use that into the EV world? How do we make our customers better? And our customers want to come to us because we have a certain skill set, and that would really be in the metals business. Mm-hmm. So if you think about the structural body and weight-type parts, they... You were there. You see these things. They're huge, structurally complex parts. They need to be E-coated, leak-test, and, and crash-worthy. And I think that's really a skill set that we bring to them. Mm-hmm. As Louis was saying earlier today, we have the balance sheet to support this growth, but they're very complex, capital-intensive products, but we want to de-risk by using a lot of our sister facilities and filling press capacity. So it's how do you use that knowledge to grow it? So I don't think, you know, we don't wanna just go be in... We're never gonna be competitive in sales. Mm-hmm. In the packs, we don't have a skill set that's really differentiator. Our differentiator is in the metals business. Mm-hmm. That business is growing from almost zero last year, about $100 million, to about $2.5 billion by 2027. So it's huge growth, growth in an area that we're really good at, and as we said last week, we're building that competitive moat in that area. Giga Press?... Giga Press. Is it overhyped? Is there something there, and are you studying it, and what do you think? So, we do high-pressure die casting already. You'd be shocked at the size of the parts that come out of six-foot rails. We do a full cradle for an ICE vehicle out of a giga-cast part. So we're in the 4,000-ton range. A Giga-cast would kick in at about 8,000. Mm-hmm. There's positives and negatives, but it's hard to do. We're definitely working on it. We're experimenting, but we want to make sure that you have a high-quality product when you go to the customer. So we're partnering with one or two customers currently, and the idea would be, let's work on it, let's develop a part, and maybe it's instead of a one-piece cast for the underbody, maybe it's a two or three. That's really where we're going. So we're in the process of acquiring a Giga Press that we can treat as an R&D. And these are—you're acquiring this from an outside vendor, like an Idra or something like that? Correct. Okay. Before we get off electrification- Mm-hmm. You know, obviously, an area that's growing pretty rapidly is powertrain electrification. So, you know, that transition to electrification, whether it be 48 volts or all the way to EV. In that business, you know, we're growing from... Now, this is managed, so it's consolidated and unconsolidated because we have a couple joint ventures, but from about $800 million in 2022 to about $4 billion by 2027. So significant growth, and that's both related to systems that we can provide, as well as components. Some customers want to provide the system, but they don't necessarily build motors, for instance. So we're, through our LG joint venture, supplying them with motors or inverters. So that's another very big growth area for us in electrification. Well, listen, Pat, I mean, you can tell us what type of disclosure are you doing? Are you comfortable giving on the margins and revenues of your kind of collected electrical products, you know, electric vehicle product portfolio? We've seen some other suppliers maybe, you know, provide a little more information, even if they don't change the reporting structure. Tell us what you're sharing now, and if there's room to improve that, increase the scope of your disclosure. I think what we're disclosing right now is the sales, for sure. Mm-hmm. But so we're disclosing where we have EV product sales. But what we're not disclosing, we talked about earlier, was if we put a seat on an EV product- You want to count it. That's not disclosed. But, but it's a tricky disclosure. You kind of go down a rabbit hole of, okay, I'm, I'm selling this seat, but if that doesn't sell, maybe I'm selling more. Like, let's- I got it. ... let's pick a battery tray. Yep. So if we don't sell the BT-1 battery tray, we're presumably going to sell more T-1 frames. So I, I'm not sure. The information could be dangerous, Adam, is what I'm worried about. Mm-hmm. Okay, that's fair. Any questions? Just, I'll give you guys a warning now. Just, I notice some of these presentations, people don't go to the audience, but again, so take some pressure off me if you want. Adam's taking questions, too. You can take the pressure off us. I do, I do, but I do, I know. So let's go to, let's go to autonomy and ADAS a little bit. What, what are your thoughts on, weigh what areas of autonomous vehicles or the journey to AVs that might be underappreciated versus overhyped? Just tell us that part of the journey and, and then, of course, how the Veoneer acquisition helps, enable further development. I'll start. You can jump in. So my view is when you think about the overhyped or needs a reset, I would say is the fully autonomous. Mm-hmm. I think the view that fully autonomous is here at really high take rates in this decade are probably not realistic. Our view would be they're going to be very expensive. Fleet robotaxis, very expensive units, probably 5% penetration rates when you get out to 2035. What I think is underappreciated is just how much the driver assist functions are growing. Mm-hmm. We see the market growing from roughly $14 billion-$40 billion as we move out. And that, that's where we want to play, and that's where we have an expertise. It's no different than the metals business, that we can take our sensors and our software skill set and provide the features and functions that the OEMs are looking for. Going back, ICE, ICE versus EV, would you describe yourself... I mean, you've used the term agnostic. Would that mean that even if EV penetration were to really woefully underperform expectations or previous forecasts, which I think they will, for this side of 2030, would that affect your margin outlook or your return on capital outlook? Or are you kind of, you know, if EV penetration missed, would it be good or neutral for you? It, it, it- I, I don't know if it would be bad for you. I don't want to leave it there. It's probably going to really depend on where it's missing. Mm-hmm. Is it missing on a specific platform? Okay. I was just saying categorically. Categorically? Listen, we're, we're investing in the future. Louis talked about the growth rates, where we're growing on the EV side- Mm-hmm ... and battery trays and whatnot. So it's the reality is, it's never a good situation, Adam, where you have investments for a program- Mm-hmm ... and the volumes don't materialize. Whether that's EV, ICE, to be honest with you, if it was like, a seat. Mm-hmm. It's a situation where you're spending money, and the way the business model works is you spend either capital or engineering upfront, and then you recover it through volumes. If those volumes don't materialize, you're never gonna recover your expected investment. Mm-hmm. Then it turns into a lot of the commercial discussions, low volume claims, program cancellations. But how fast can you turn the plant over to make it efficient again? So it's really, you know, when you get out to 2030, that's a hard one to figure out. Mm-hmm. Okay. But we have seven years to Just my view, I think, I think slower. I think speed kills. I'll leave it at that. So supply chain, where would you describe, how would you describe the current environment versus 2019? How far back to normal are we? And if we're not, where's the gap? I think we've gotten a long way, long way back, even in the last six months. I mean, last couple of years were tough. 2021 maybe was the worst, and it got a little bit better, but still pretty tough. In 2022, it was stop starts. 2023, I'd say through, as we got through the first quarter, which was a little bit bumpy, second quarter better. So I think it's getting better. We've seen improvement throughout the year? Yeah, I think we've seen improvement. Okay. Yeah. It's still a little tight, and there's still always risk, but I think we've seen improvement. I'm puzzled then. GM had, you know, major—we have at American Axle saying, you know, three times the level of disruption from General Motors because of their Mexican plant issues in the last quarter. I didn't know if you had any exposure there. Well- Yeah. Yeah. Well, yeah. I don't know why it went down, though. So we're talking chips. When you talk about more broadly- Uh-huh. There was a flooding in Slovenia. There was a fire in- Yeah. But we're getting back to more normal- Things happen. But- Yeah. These are things that have happened, you know, forever in history. Mm-hmm. What's really amazing with the OEMs is the way they can really pivot- Mm-hmm ... and fix that supply chain issue. I think the chips was an anomaly, and I agree with Louis. We're just seeing the chip situation settle. What's the greatest cost opportunity and capital discipline opportunity at Magna? Capital allocation? Not, not allocation. Well, I'd say capital allocation, not in terms of return of cash, but in terms of either extending the life of investments you've made or being more efficient and austere in certain areas or looking at systems that might have room to be decomplexified or restructured. I think it's the latter. I think it's really the how do you scale capital as you go? So your EV example. So if customer A comes to us and says, "We're going to build 1 million, pick a number, 1 million units per year," but you're not really comfortable with that 1 million units, or you're negotiating with a 1 million units. Maybe it's 5 lines, and you scale up as you go. Mm-hmm. It's not only the scale of the capital, but the second piece of it is how—what's the flexibility of the capital? So can you run different products, different customers through the- Mm-hmm ... exact same lines of change? So if you watched last week, that's really the Steyr model, Adam, if you think about our vehicle assembly, when Swamy was showing how the framing station pivots- Mm-hmm ... and how you're actually able to bring the exact- Hmm ... different vehicles to the exact same framing stations. Yeah. That's a real capital reduction effort. If you think about it, most traditionally, you would have put one assembly line per vehicle. Okay. And that's... I'm pausing a little bit, Louis, and jump in, is because we've been really strong at that, and you really look at how do you scale capital? How do you make it flexible? How do you reuse it? Yeah. That would be our four-wheel drive, all-wheel drive transition into eDrive. Right. Contract manufacturing, Steyr, what real-time capacity of that, of the, at Graz right now? Capacity? Mm-hmm, capacity and utilization. Like, full capacity, like, the total, we're about 160-170 is what our total capacity there is. And- What we're using. I was just driving a Fisker Ocean. Didn't know if you had anything you wanted to share there on, on, on that at all, and if you don't, that's fine, too. There was also a story recently about maybe some Chinese OEMs looking at potentially that facility as a way to be more European. Can I say that? Maybe a foothold, right? Yeah. You know, we speak to so many people. Yeah. You know- Great ... it's, you know, that framing example- Mm-hmm ... we have large, sophisticated customers doing workshops in our facility to see how we do things. Mm-hmm. So it's not unusual. To the fact that one is in the paper, realistically- Yeah ... we've probably spoken to every large manufacturer. Yeah. Years ago, I talked to Swamy, and he described, you know, the Fisker project as one of the most important things going on at Magna. Just really huge- Mm-hmm ... for you to show the world what you can do. Mm-hmm. That the learnings you would have on kind of a clean sheet design and manufacturing from EVs would be just, you know, carry kind of cultural and strategic value beyond just the role of them- Mm-hmm ... as a customer. Is that, is that true, and, and what have you learned? What have we learned? I think we've learned a few things as one is, this is gonna be, we're gonna be using an eDrive in the vehicle. Mm-hmm. So it's an eDrive from scratch. They're learning. So great learning, use that as a core build. Mm-hmm. You have that in ADAS space as well. But the other piece of it was taking an eArchitecture and creating a whole architecture for a vehicle. And that's something that we can leverage, that now we know... We talk about the power of Magna and the full- Mm-hmm ... power of the vehicle. This is where the vehicle's going. So this is a software-defined vehicle. How do you get the various pieces to talk to one another? So I think the learning experience, it was a really great learning experience- Mm-hmm ... that we can leverage going forward. What portion of your forward, let's say, electric vehicle-linked backlog would be attributed, or comprised of the Chinese EV manufacturers, broadly? I'm not asking for a specific percentage. I just didn't know if there was an idea- For sure. Or whether EV business? Yeah. I'm kind of ignoring the Chinese ICE stuff is dying, so. If I think of China, we have about $5 billion of sales. Yeah. Or $4 billion of sales. $4 billion of sales, about 50% with the C-OEMs. Yeah. But we're dealing with, I don't know the split between. I would know the EV. I would know the EV. Let me put it this way: What would be your most visible and important Chinese local EV relationships? ... we've been dealing with BYD? Yeah, BYD. Okay. Geely, Chery, Great Wall. Great Wall, yeah. And how do they operate? How would you compare, having worked with players like a BYD, for example? How does their style as a customer and working with you as a solution provider differ from that of Western EV manufacturing? I think once you're in production, it's not very different. Yeah. It's really the speed of launch and the speed of award to SOP is much shorter than what we would expect with our traditional customers- Okay whether it's a G3 or a D3. Is it like, when you say much? I mean, is it? Probably two-thirds of the time, so like a third faster. Okay. Uh- So it's a significant difference, but even in some of the technology, the other piece we see is they're much more willing to do significant mid-cycle enhancements. Mm-hmm. So the traditional model would be, might rescan it, change a few things. In China, they're more willing to do a full-scale technology changes- Yeah Big changes into the vehicle. Yeah. The European Commission's investigating Chinese in terms of their initial stages of ramping into Europe, and I've always thought that Chinese will eventually come to Europe, but if they go too fast, it'll blow it up, so they need to go just not too slow, not too fast. Yeah. Just kind of Goldilocks. Again, from your lens, being so diversified, both geographically and, and product and, and being a major, major force in Europe, what, what's your, what's your reaction? Are you surprised at the European protectionist direction? Do you think it goes further? And any other thoughts on the outlook of Chinese in Europe? It, I think, that's a tough one. They're listening right now. It's a real tough one. They're listening. Yeah. It's on my phone. I'm pausing a little bit in the sense that I think the way they operate in China- Mm-hmm ... is probably going to be different than the way they operate, whether it's in Europe or Brazil. Mm-hmm or wherever they go, in South America. Mm-hmm. I think they're going to rely on a supply base. I think the whole way the industry works with suppliers, suppliers and OEMs works for a reason. And I think us being such a significant player in Europe and North America, probably not North America as much, but in Europe, is a, is an opportunity for us. So the fact that you mentioned earlier- Mm-hmm ... we have somebody in talking in a news article about a Chinese, it's a relationship you're building, and we have, you know, we have a significant EV, BJEV joint venture in China as well- Mm-hmm ... for vehicle assembly. So we, you have to understand the market. We're in China for China, but the flip side is when they, if they decide to come outside China, we're here to support them. We've always said that. We've always said there's going to be Chinese OEMs, they're going to be global, they're gonna move forward, and we have to be there to support them or, you know, wherever they go. You think they realistically can have some form of on-ramp in North America? That's a tough... I think product-wise, they probably could. Uh-huh. It's going to be, it's going to come down to geopolitical issues, and I think it just, it's a much bigger issue than auto supply. Steyr in North America, what's the latest? When can we see a plan here? It's the same. I'm going to give you the same answer- Yeah I gave you nine months ago. That's okay. That's an answer. It's honestly gonna depend on the business case, and it, it's the risk-sharing model. It's not an IRA, but I would have thought there would have been like, did IRA, like I, I could be sympathetic to it, seeing how that evolves, seeing it get approved, and how it would, you know- Mm-hmm ... dramatically affect the economics of an investment like that. Do you feel you have enough information from the IRA side as one of the inputs to drive that decision, or is there still some things to work out? I think, well, the IRA is, it doesn't come to the benefit of Magna or the builder. The benefit's gonna go to the OEM themselves. So I think their business case gets a little bit more easy. Okay. So now you're gonna start going through. Does somebody want to come here and localize? Is it a new player? Mm-hmm. Is it a good product? Is it a high-quality product? So I think there's so many factors, but at the end of the day, it's going to be what's the risk-sharing and, you know, what's the commitment to the facility? That's the number one priority. Mm-hmm. Onshoring, how fast can it go? I'm thinking, let's take Europe and U.S. separately. Mm-hmm. Some of the impediments or challenges to onshoring that, you know, through your lens, you would say to an outsider or an investment professional, "Hey, look, when you think about onshoring, here's, in practice, here are some things to think about. Yeah. I think on the onshoring, it was a real... When, when everything was happening with COVID, it was front and center. Mm-hmm. You would see the quotes coming through, "What's your onshoring strategy? Mm-hmm. We want to quote it from here or there," but, you know, it's. I think it's quieted down quite a bit. Yeah. That's my sense of what's happening. But we're not. You can't really offshore big parts, so we're still talking smaller- Mm-hmm ... pieces, nuts, bolts, you know, small parts that you can ship efficiently. Mm-hmm. Once all that shipping and freight settled, we really haven't been hearing it as much as we have previously. That being said, from our point of view, when you start looking at some of the opportunities to on—we want to do it for our own purposes. Mm-hmm. We're not really listening just to the customer's mandates, but if we have an opportunity that's relatively cost neutral, do you want to de-risk? That's something we consider. What's top of mind with investors? You spend a lot of time engaging in events like this and even throughout the day. Any questions or topics that are gonna hit you that were a bit surprising or, or anything that's come up in your other meetings that we'd like to share with the audience here? Well, there's been much in terms of surprises. I mean, I think people are focused on the mega trends, and there's lots of questions about electrification, the pace of electrification, margins around electrification, what's going on in the EV, ADAS space. Probably, there's anything that's really surprising there. Mm-hmm. Lots of questions about Veoneer, because that's a new topic that people want to get their head around, but been pretty much- Yeah ... normal. The 20 basis points of margin, Impact. Impact, yeah. Yeah. And then- But improving from there. Mm-hmm. I mean, we talked about our margin outlook being unchanged from in 2025 from what we said previously. Mm-hmm. That was seen as a positive. Pat, Louis, any, any final messages before we wrap up that you wanted to share or any topic that you wanted to... Any questions for me? I'm here, man. I'm here for you. No, hey, well, thanks for hosting this. No problem. I really appreciate it. I didn't do much. Yeah, no, it's good to get out. I think just the Magna story, I think people Louis did a fantastic job last week on the Investor Day, and I think it's really getting the message out there. So we have a clear strategy, and we have to execute against it. I really hope people take away the fact that, you know, we're 350 divisions. Mm-hmm. But it's, there's, you know, we're more than that, right? You put it all together, and there's a strategy of where we're going. And you mentioned Fisker earlier. Yeah. What, what are we learning? It's not just learning in one spot. Sure. How do you take that and cross-read it? Yeah - across those 350 divisions? Sure. That's the real benefit of Magna, and our breadth of process and product is second to none. Yeah, and it's just like 25, you know. We've set out our sales and margin targets, and we are highly, highly, highly focused on getting there. Yeah. I don't think people believe it, but we're gonna get there. It's good. It's good to be doubted. The extra detail on the longer term direction of the company was useful. Good. But thank you for your time, and- Yeah ... the questions, and yeah, appreciate it. Good to see you. Thank you. Great. Cheers.