It gets settled. We're very happy to have BorgWarner up next. We view BorgWarner as one of the leading powertrain technology companies on the planet, with a great portfolio of ICE technology as well as EV technology. If I were to set up a powertrain company, I would set it up in a very balanced fashion the way this company has. The market obviously disagrees with us for the moment, so we're going to get into some of those disagreements in this session. We're very happy to have Joe Fadool, President and CEO, Craig Aaron, CFO, and Patrick Nolan, VP of IR. Pat, thank you for all the help. You're always a treasure chest of information for us, so thank you for joining us as well. Maybe if we could just open it up first, Joe. You've been with BorgWarner since 2010, I believe, so it's been a while. You just took over as CEO in February. I was just wondering if you could talk about just generally some of the positions that have been taken in the company, how it's been set up before you took over, and also kind of that in sort of the context of a very uncertain macro environment. It's been a little bit uncertain for a while, but suddenly gotten a little bit more uncertain. What you think the biggest issues and opportunities are from BorgWarner that may be slightly different or maybe the same as what Fréd used to talk about. Sure. John, first, thanks for hosting the conference, a well-attended conference. From where we're sitting today, the way we view our business is this is the strongest portfolio we've had. You could argue that BorgWarner may be one of the strongest powertrain players in the market. The reason we believe that is, first, if you go back, when I started, what I found at BorgWarner is a very strong combustion portfolio. When you think about turbochargers or exhaust gas management, four-wheel drive, timing systems, where we're number one or number two in all of those products, we started from a position of strength. About 10 years ago, we started to make this transition toward electrification. We began with an acquisition Remy International, which brought us really good motor technology. Over the course of years, we've been able to outgrow our end markets with this portfolio. In the last few years, we accelerated toward electrification with a number of acquisitions that brought us inverters, that brought us more motor technology, onboard charging, and a number of other products. As I look at it today, we're very pleased with the portfolio. It's very strong. From our standpoint, we are leveraging growth across that portfolio, independent of where the growth is coming from. Our goal is to outgrow our end markets. I think our biggest opportunity is really capitalize on that portfolio now. We've worked really hard to build that portfolio, especially with the investments the last five years. We're able to do that because we have very strong customer relationships. Our customer diversity is very high. I see growth opportunities on all sides of the business now. We were focused heavily on the east side under Fréd's tenure because that's where the market was headed quickly, and most people believe that. Now we see the growth across the entire portfolio. That's our big opportunity. Of course, the challenges are like any other automotive supplier these days. Will there be an impact in volumes this year? Tariffs and uncertainty, obviously, playing a big role. My focus is outgrowing our end markets, leveraging the core competence we have. It's really continuing to build on the portfolio, even though we feel it's very strong. We still want to make organic investments and inorganic investments. Finally, which is really important, is driving enhanced financial performance. We want to expand margins and generate a lot of cash. That's a great start. I want to stick on sort of tariffs and trade stuff first and then get into the good guys because there's a lot of good stuff to talk about. Can you talk about sort of your setup for your footprint in North America, U.S., Canada, and Mexico, what your exposures are, but why they are, right? Not just, I mean, because there's reasons that you set up your footprint like most companies in the way you have. What could be the opportunity or the flexibility to reshore to the U.S. from Mexico, I guess, would probably be the bigger potential, or maybe not, right? It might not make sense. If you could just talk about that footprint, why it is, and what the potential could be for you. Yeah. Maybe how do we set up our footprint? Generally, we focus on investing in the region where our customers are and where they're going to consume the product. We do not ship tremendous product from one region to another. The sales in North America are about 30% of our total sales, so it's pretty significant. Now, if you think about our footprint in North America, we've got seven plants in Mexico. A lot of our products we produce in both the U.S. and Mexico. By the way, we do not have any plants in Canada. For us, what's important is, first, we have to get some clarity on all the tariff noise. Nobody's going to make a long-term move until there's some clarity on what the actual tariffs are going to be. Short-term, we'll focus on recovery of those tariffs from our customers. Mid and long-term, we're starting some conversations with customers. Should there be some product relocations, or can we leverage some existing capacity we may have? We are not going to make those moves until we get better clarity. It takes time. By the way, we cannot do that in a vacuum. We need our customers to support any change we make. We are in a strong financial position to do that if necessary. To be clear, most of the products that you're producing in Mexico are going into vehicles that are produced in Mexico, or are there any parts that you're producing that are crossing the border on their own? If they're crossing the border, usually the importer record, I think, is the automaker itself. It's almost like it's going into a vehicle, I think, from your perspective. Maybe I'm getting that wrong, but is that about right? Yeah. First, we do serve the local Mexico market where there's production, and we bring parts across. I don't know if you want to comment on roughly what we import. Yeah. So when we look at last year as a good reference point, about $875 million is the amount that we imported into the U.S. When you break it down by region, about 55% of it was from Mexico, 10% of it was from Canada, and 5% from China. Just some good statistics that the group can use here to kind of model what they see fit. That's a good way to look at the imported value from last year and what that may mean into 2025 and beyond. Just on the import, I'm not sure this is even clarified yet, but I think most of the way it's set up is the import is actually the import of record is actually the automaker. Is that correct into the U.S.? I think that comes down to the terms of your agreement. Sometimes it's us, sometimes it's the automaker. Got it. Okay. I mean, there is kind of a draconian situation where if tariffs really stick, which sounds like they might not as of last night or yesterday with the potential relief on parts, if there is this potential 2 million-3 million unit decline in industry volume, how are you guys set up to handle that, which would be sort of a, not normal, but a pretty tough downturn in the industry here in the U.S.? Yeah. Clearly, 2 million- 3 million, fairly big number from where we're at today. For us, again, 30% of our sales are in this region. If we see a lower production environment, short-term, we're going to slow down discretionary spending and focus really on managing any kind of detrimental that might exist. If we think those changes are going to be longer-term in nature, meaning the tariffs are pretty sizable and they're going to have some kind of impact for a longer period of time, that's one thing we feel we're quite good at is adjusting our structure to what we think is going to be more a midterm or long-term change in the market. Okay. I mean, from your customer base, I mean, you're probably hearing a varied set of responses at this point, right, from not importing to taking down production. I mean, is that, I mean, are there any kind of extremes that you could talk about positively or negatively? Or, I mean, what are you hearing generally without getting into too short-term stuff from the automakers? Are they kind of throwing themselves a bit? I think it's early days. I think they're all waiting. We're all in the same bucket. So we're all kind of waiting, where's this thing going to land? I think you've seen like we have Ford and Stellantis offering pretty attractive pricing to stem production or to motivate folks to buy more vehicles. Where the tariffs land is a big question mark for all of us and what the impact it has. I think we're just going to have to wait and see. Now, there's one other layer below this from a macro sort of regulatory standpoint is EVs versus ICE. There's some changes that might be coming with the CARB ACC2 mandate, EPA, and its fuel economy and emissions regulations. If those get watered down or CARB gets eliminated, you kind of alluded to, I mean, you've got a great ICE portfolio. If programs get extended or we shift back in the direction of ICE, how do you think that will impact the business? Yeah. Our products are driven primarily by two things, as you know, regulation and the need for customers that just have more efficient vehicles, right? Or like to drive fast too, right? You can do some pretty good stuff on that drive too. [crosstalk]. That can drive customer demand. The main drivers of regulation or striving for better efficiency, as you said, we've got a very resilient portfolio. In this particular market, our great combustion products, which we're number one or number two in, can go into ICE vehicles. They can go into hybrids. For us, it's exactly what we built this portfolio for, is this level of uncertainty. If the market, like in the U.S., is driving for more combustion and hybrids, we got a great portfolio to serve them. If the markets want more hybrids and more EVs over time, we're in a great position for that. We think we're in a great position to support the market regardless of where it goes. John, can I ask you a question in Europe for a sec? We're U.S. domiciled, so we kind of look more at the U.S., but Europe is a big part of your platform. The tariffs in Europe could be quite extreme. Whoever is going to be importing here, there may be less relief in European tariffs. How are you thinking about your European platform, especially those vehicles that are going to be imported into the U.S.? Yeah. Maybe starting with the regulation in Europe through that strategic dialogue that was happening in the first quarter, the conclusion of that was not necessarily relief on the regulatory environment. It was more they're going to take a three-year average and allow the OEMs to meet the requirements over a three-year average. What they do not meet this year, they have to catch up a little bit in year two and year three. From our view, there's not a big change in what the demand is looking like. We still see strong RFQs across the entire portfolio, especially when you think about hybrid and EVs. We're in a great position to support that. In terms of, I think your last question was around exporting. We're a powertrain company, and those powertrains can go in a variety of vehicles. We're focused on making sure our customers have good technology for whatever they're trying to achieve. We don't really track what vehicles they go into to the nth detail, nor how many of those get exported or not. We just don't have that kind of transparency. If we think about the other regions that just kind of got into, I mean, Europe will have a higher EV penetration than the U.S. over time. How much we'll see. China will be much higher. You serve all the—you serve the globe. You serve Europe, as Doug just mentioned, and then China as well. As you think about sort of the investment burden that's spread from that fragmentation of powertrains, right? I mean, 20 years ago, we're all talking about ICE globally, and it was kind of a little bit easier and a little bit more consistent. How do you think about serving sort of those different constituencies now in this fragmentation of powertrains? Does that mean the investment burden is higher, returns and margins are ultimately lower, or how do you think you can manage through that currently and then over the long term? Is there enough scale to serve all markets without having any incremental burdens? Yeah. The way we've kind of run the business is, if you look at the last five years, the heavy lift was the portfolio. We had to do a number of acquisitions. Of course, we invested heavily when we were winning a lot of new business on the east side. That was the massive lift we had to do. From here forward, since we feel really good about the portfolio, it's more around winning new programs that come through an RFQ process. Of course, we will discount those volumes depending on the experience we've had with the OEM. Our customer diversity plays a very important role here. It gives us a view into all the powertrain cycle plans, and we can aggregate that information to help us make better investment decisions. In general, we chase RFQs. We win new business. We have an ROIC of 15% that every new program has to achieve if we make an investment. For us, it's a little bit more business as usual versus the last five years. We had to do a lot of heavy lifting to get the portfolio in place. Now we're at a point with whichever direction the market goes in, you believe you're very well positioned. Can you remind us of, are we sort of at a point where, no matter which way it goes, we have the same incremental margins and the margin potential and what those incrementals could be on the upside? Unfortunately, based on some of the stress we're going to see right now, potentially on the downside? Yeah. I mean, we manage the business at a mid-teens incremental conversion. I think 2024 was a great example of BorgWarner in action. What did we do on relatively flat sales? We expanded margins 50 basis points. How did we do that? Really focusing on cost controls. So we focused on restructuring savings and productivity and supply chain savings. If we get into a scenario this year where industry production is a headwind, we're going to follow the same playbook, really focus on cost controls across the business and those three levers. I think 2024 is a great example of what BorgWarner can do on relatively flat volumes. And I have complete confidence in the business units that they can execute in the same manner as we go into 2025. If we think about another issue and opportunity, it is inflation, right? I mean, it seems like pre-tariffs, they would have been normalized and not necessarily a big issue. Now with tariffs, it can become a large issue for some of your tier two and three suppliers, right, that you guys are dealing with. I mean, if you think below you, what kind of issues are you hearing from this inflation? It may be tariff-induced or maybe just natural inflation from other macro factors. Is that something that you guys have started game planning, understanding how you are going to either absorb it, push it back on the tier twos, or potentially pass it through to your automakers? Maybe, I mean, using the experience of the last couple of years with your customers as kind of a guide in answering. Yeah. What did we learn from the inflationary time? I think a couple of things. One, be really focused on our costs across the business, like I mentioned earlier, but also work with our customers. We have deep customer relationships. Obviously, that's what Jill mentioned earlier. We need to utilize those relationships to manage through these difficult times. I think we did a fantastic job during the inflationary period. We found a solution to not have a material impact on BorgWarner's margin. As we go into tariff, we're going to dust off the same playbook and execute it. I have no doubt that we'll be able to navigate the situation just like we did the inflationary period. Got it. China is a shifting market or changing market very quickly and is going to continue to change. The domestics are gaining massive market share, not just in market, but the rest of the world outside of the U.S., at least at the moment. Maybe you can remind us what your position is in that market with domestics versus internationals and what you think the opportunity is both in China then going international. Because I think there's a fear over time that a Chinese supply base rises up that is maybe more domestic that could be a challenge. That might not be the case. I'm just curious from your standpoint on that as well. Yeah. We have a really strong China business. It's about 20% of our sales last year. When you look at that breakout, that 20%, about 75% of that 20% was with local OEMs. When you look at the e-product side of our business, we're overweight, about 90% supports local OEMs. We have a really strong business. We get a lot of questions about how are we able to have so much success in China? It really comes down to deep customer relationships. China OEMs move at a much different pace than Western OEMs. A program gets developed in about half the time as the Western world. Our China team knows how to run with them. We run shoulder to shoulder. That's why we've had a lot of success beyond providing great technology at a competitive price. I think it's a factor of all of those things. When you look at, we have 30 e-product launches going on across the business this year, and about half of them are in China. I have complete confidence in our China business, not only for this year, but for many years to come. We have a great team, and they know how to execute in that market. I think it was just about 23 years ago. I was at the Chengdu Auto Show doing a conference there, and I was in a sea of people and sort of the drinks afterwards. I saw [Tim Manganello's] face across the crowd. I think we were the only two Westerners there at the time. I can attest to you guys hawking and working very hard in China for decades. It was an interesting moment. Tim knew how to sell and drive the product. You have a good foundation. I remember that very vividly. As far as the speed, right, I think one of the tricks or advantages the Chinese have right now is that they move fast. The regulatory environment and the customer base is much more accepting of less than perfect. It's got to be pretty good, right? It can't be totally a mess. That seems to be kind of okay when you get into sort of HMI stuff and human-machine interface stuff. On the powertrain, it's not, right? Because the powertrain's not working. You can be kind of forgiving or not forgiving. Can you just talk about how they are able to move that quickly, particularly on powertrain in two to three-year cycles when we're looking at seven to 15-year cycles in developed markets? I mean, how are they doing? I mean, obviously, you're helping them. How are they able to do that on the powertrain without running into real major issues? Yeah. Maybe to emphasize a few things Craig mentioned. First of all, we've been in China for a long time, over 30 years. And I'll be at the Shanghai Auto Show, and I hope not to see Tim's face next week. He's probably on a beach. You never know. He might be there. He could be, but he's probably on a beach somewhere. I think going back to this speed topic, that is a huge advantage for them. If you think about the Chinese, they get two products into the market in the same timeframe that a Western OEM gets one product. What does that mean? Not only are they quicker to market, they're able to learn more quickly because they're putting two products in in the same timeframe as another OEM is maybe getting one in. The other thing is they're much more willing to take products off the shelf and tweak them rather than all new. If you look at some of the Western OEMs, their traditional powertrain development, they're building much more from ground-up requirements. We find the Chinese automakers, due to speed, are willing to take something, adjust it to their requirements. I do not want to use the word, it does not have to be exact, but they will make some compromises where it is not functional or it is not safety-related in order to get that product in the market more quickly. What customers tell me all the time in China, they love how fast BorgWarner is willing to work. Our operating model, which is very decentralized, gives a lot of autonomy to our teams in China. They are not spending their time calling Germany or our headquarters, "Hey, can I do this? Can I do that?" They are very savvy, very technical, and they are able to support those customers at the same speed. You're working with everybody on the planet in powertrain. A lot of the Chinese have learned from your help to some degree and from some of their JVs with the Western OEMs. Do you think we're going to get to a point where you can help your Western partners or customers and they can learn to move as fast? I mean, are you seeing any of that? Or are we sort of in an environment where things are so entrenched and processes are so entrenched that they're never going to be able to move as fast as that with you, right, with your help in your specific area? Yeah. I wouldn't want to speak to any particular customer, but trust me, they are all recognizing how fast China's moving and the China OEMs. They've learned so much in the last 30 years. You're right. They're able to now take all those learnings and be leaders in many parts of BEV. Yeah, they're taking note. Everybody wants to make sure they can compete. We see some OEMs adjusting their product development times. I think what makes BorgWarner such a value to our customers, since we're working with all these OEMs, we're able to take what we know and share with them, "Hey, this could be an opportunity for you. Maybe here's our portfolio of products. Instead of doing it bottoms up, let's grab one of these and tweak it and run. I think you are going to start to see a little bit more convergence on timing, but each customer is approaching it a little bit different way. We are literally just on the leading edge of the curve of any kind of change happening with most of the incumbents on that speed of powertrain development, is that? Yeah. I would say it's early days. For us, a lot of people talk about the Chinese OEMs as a threat. For us, we see it as an opportunity. Our strategy is to win in China with the domestics, which we have been doing. We're slightly overweight with the domestics. As they grow outside of China, we're going to be in a great position to be a partner of choice. We've got factories and suppliers and people all over the world with an excellent footprint, even as they export vehicles. China exported almost 6 million vehicles last year. We even picked up a little tailwind on our drivetrain product due to that. We think we'll be in a good position. We want to keep winning in China so we can support them outside. An even older CEO than Manganello, Fiedler, I remember would talk about the Japanese and how well you guys did with the Japanese in the somewhat early days there. I imagine you guys have this constant ability to win with new "upstart" but not upstart anymore, manufacturers over time. I mean, it has happened in the past, and we have done very well. Maybe we could just touch back on the competition. When you are going in for the bidding process, even RFI situations, are you seeing any new competition, or is it the regular standard players that you see? Meaning, are there any Chinese companies that are coming into the mix or any other new players, maybe even from Korea that are coming into the mix? Yeah. So our business has always been very competitive. I mean, there's always pressure on cost and price, and we don't see any big change there. Yes, there are a few more competitors coming from some of these younger markets, but materially speaking, it doesn't change the dynamics of the industry and how we're operating. The thing to remember about powertrain, it is a business of precision. There's requirements to meet, emission regulations to meet. That's not changing. And the quality requirements are immense. You need to have a system that has high reliability and people can afford, but is always there and has some fail-safe to it if there is a component failure. So for us, remaining competitive into the future is a primary focus, and we plan to do that. I'm sorry to interrupt. I wanted to ask, you guys are in the leading edge of the EV shifts. There's been a lot of talk of slowdown in the U.S. and a little slowdown more in Europe. China seems to be doing really well with EVs. How would you just kind of characterize what temperature we are kind of globally on the EV migration? It's a broad question, but. I mean, if you look first globally, we're still bullish on electrification. Why is that? Electrification is really the only affordable way to decarbonize mobility. And despite some of the politics going on in this country, long-term, electrification is going to grow. We're bullish on it, even though the growth is slower than we expected. For us, what's important is the regions are probably going to play out at different speeds. We have the portfolio to support our teams on the ground. If there's more hybrid and electric vehicles, we got great products from both sides of the portfolio. Especially on hybrids, what a great vehicle that is to allow consumers to get more used to plugging in a vehicle and managing some of the intricacies of a hybrid. For us, the content potential for vehicles is a home run. It's the same as it is on a BEV. We still long-term believe in the electrification plan. I think most people, if you see, they're moving in that direction. It just may be a little bit slower growth. We don't control the growth. What we control is making sure we're winning business, controlling our costs, installing the capacity, and delivering on a 15% ROIC. Perfect. Thank you. I've got one more, and then we'll open up for questions from the audience, and then I get a bunch more. If we think about sort of the growth initiatives on the EV and the ICE side, it seems like those are kind of maybe even now more than maybe we would have thought. We're now at a point where incrementals are mid-teens. How do you think about sort of the mid to long-term margin potential of the aggregate portfolio? Is it getting—could we ever get close to sort of low to mid-teens, ongoing operating margins with those incrementals and the business grows over time? I mean, how are you thinking about the opportunity to drive margin mid-term, long-term, and where does it settle? Yeah. Joe and I are focused on incrementing in the mid-teens on an all-in basis. That's a different approach than a few years ago. We saw a substantial increase in e-revenue coming from an industry perspective, and we needed to support it. We were incrementing in the mid-teens, excluding the investment in ER&D. That's not our focus anymore. Our focus is incrementing in the mid-teens on an all-in basis. I don't think Joe and I view it as a cap. We're going to continue to focus on incrementing in the mid-teens as we move forward. Our goal as a company is really quite simple. Outgrow industry production, turn that growth into income, grow income dollars, grow EPS over time. We think that's the secret to creating a lot of shareholder value as we move forward. That's our focus. Sure. If you were to think about operating margins sort of in total, I mean, where do you think the level could be over time? Our focus is increment in the mid-teens. Okay. Increment in the mid-teens. You can get there. Okay. Do we have any questions in the audience? Jim, if you want to fire away. Yeah. It's coming to you right now. Sorry. Thanks for the discussion. Just wanted to follow up on John's question about China. When we think about your customer diversity and your position today, how are you thinking about winners and losers within China? I mean, there's a few players like BYD that are very rapid growth, more vertically integrated, but moving international. I just want to make sure I understand that opportunity set for you, gaining share within the China players in China versus think more about the opportunity as BYD moves externally. To the extent somebody that you have a big program with is a loser, but you've got another guy that's a winner, are you basically leveraging the same manufacturing footprint so that to some extent you're a little bit indifferent given that diversity? Just want to make sure I understand that dynamic on your cost structure. Thank you. Sure. That's a great question. I mean, there's 100 OEMs in China. Who do you focus on? First of all, since we've been there for a very, very long time, we've built businesses over time with all the names you know: BYD, Changan, Chery, Great Wall, Geely. Those are the players that are winning inside that market. Now, someone who's number one this year might be number three next year. We don't really pay attention nor care. It's more or less, are we winning with the winners? We've also got to focus on some of the startups. There are a lot of startups in China have been the last five years. So Xiaopeng, Xiaomi, just to name a few, also are part of our base. There we look at, okay, what is their plan to get to market? Are they focused on software-defined vehicles? Are they focused on something that can go more global versus a niche in the China market? Our teams on the ground constantly are evaluating that. We feel really good about our business. Not only are we slightly overweight with the domestics, but over 90% of our business are with the top six customers. For the most part, those are the customers that are able to export. The small players, they're not going to have the funding or the wherewithal to maybe support those other markets, and especially when you talk about localizing. It's the players like Chery, Geely, BYD. They're the ones you're starting to see the expansion, and they're in our customer portfolio. The only thing I'd add is we're really focused on having flexible equipment. It is impossible to pick always a winner and a loser. Hey, if a program doesn't work out, are we able to redeploy that equipment to another program? That is always a question we're looking at. If that's not possible, then we need to work with our customers if volumes don't materialize and get recovery. That is how we manage the risk. You said equipment is flexible? Yes. It plays back into this idea that the Chinese OEMs are more apt to grab something that's off the shelf and modify it, which again, fits better to the manufacturing concept. All of that kind of goes together. You can't have flexible equipment if you don't have some modularity to some of your products. We feel we're in a good position to manage some of that downside risk. I've got two more I want to sneak in. Any questions out there? I got one balance sheet question. When you're done with your questions. Yeah. So yeah, that's the last one. When we look at some of what's happening with programs right now, there's program extensions that are ongoing. My view has been, and I think this might be wrong, my view has been that that's actually good because then you get to run a program for a year, maybe two, maybe in some cases three. We'll see how much longer things are extended right now on the ICE side. We've heard that that actually becomes somewhat challenging because the way the lines have been set up, the tooling has been set up, it's set for the five, six, or seven years of the original program. If you're extending it a year or two, that actually can create some challenges of refurbishment or replacement of tooling. I just wonder if you guys can talk about that because I'm sure you're running into that like everybody else is. Is that actually challenging, or is that actually sort of net beneficial on margins and returns? I mean, not looking for a short-run answer, but just how does that actually work? Because it sounds like a big opportunity, but then we're also hearing it might be a little bit problematic. I mean, we love extensions. If you think about it, there's no new R&D for an extension, right? We're a heavy R&D type of product, highly engineered product. If you look at some of our wins over the last three to six months, we've had extensions. We've had some volume uplifts, especially in this part of the world, in addition to new programs. I think we're starting to see a few new programs around the combustion side. I wouldn't say there's any big retooling needed. Of course, you always have to refurbish your tools, make sure you got investment that has good uptime and good quality. No, we love extensions. We love uplifts. More product with the same R&D is always a good thing. Okay. Just we'll probably ask this question together. If you could just talk about sort of M&A and what you're looking at, particularly on the acquisition side, not mergers, but the acquisition side of technology and maybe how you balance that with Doug's question. Maybe you want to kick anyone? Yeah. I mean, you've always had a very strong balance sheet. If you look at kind of a myriad of auto suppliers, you've been in the higher echelon of the quality, never really flirting with sub-investment grade ratings. As we head into this downturn, how much focus do you have on a high-quality balance sheet? Maybe you start with the balance sheet. Sure. Yeah. We have a couple of targets from a balance sheet perspective. First is liquidity. Our target is 20% of sales. That includes our revolver. We have a $2 billion untapped revolver. As I look at our balance sheet at the end of last year, we're actually above that threshold. We're operating from a position of strength. From a leverage perspective, we target gross leverage at 2x. Again, when I look at the balance sheet at the end of last year, I put a check mark next to that. I think it's more important to have a strong balance sheet more than ever. It's during these turbulent times that having an investment-grade balance sheet is really important. I think it provides us a lot of flexibility to take advantage of inorganic opportunities that Joe can kind of talk about, but also looking to how we can return cash to shareholders if that's the right thing to do. Right. Yeah. Specifically about potential acquisitions. Acquisitions have always been a part of our strategy. I would say we did a lot of heavy lifting again in the last five years. How we're approaching acquisitions on a go-forward basis, I would say we're opening up our aperture a bit to take a look at, hey, what's out there, especially in a time of so much turmoil right now. As Craig said, we're in a position of strength. We'd be remiss if we didn't take a look at what could be a potential acquisition. Now, with that said, there are three criteria that we're focused on. One is it needs to leverage the core competence we have today. We want to continue to build a strong portfolio. You're not going to see us do something far out in left field. Acquisition-wise, we have good industrial logic. The second is we want to see near-term accretion, so something that can contribute very quickly to BorgWarner. Third is valuation, okay? Especially in this type of time, we don't want to overpay. You have to run lots of scenarios to anticipate what the market could look like. For us, it's important that we value an asset properly and stick to our numbers. That's how we're approaching that. Good the framework. Thank you. Just maybe to follow up on that before we finish here is historically, acquisitions in the supplier space have been regional, customer, and then tech, right? It's kind of the way it's been looked at, sort of regional diversity, customer diversity, and then technology. I think for you guys, really, it's more of the technology side that kind of leads the first two. I just want to make sure we have that straight. When you're kind of evaluating what you're going after, what it's like to target sort of more strategically. Yeah. I would say regionally, we're pretty balanced today. I think that's probably not the highest priority at the moment. If you think about our strategy, we're number one or number two on the foundational side. We're still building scale on the east side. Yeah, when it comes to more customer diversity on the east side or when it comes to good technology, we're in the early days of electrification. We feel really good where we're at right now. We think there's going to be some opportunities out there. Again, I don't want to comment further than that. Tech and customer diversity in that tech, right, is really. Yeah. I would say building scale overall. We want to get to be a top player in electrified products just like we are in combustion side. We know when we do that, we can not only invest well into the future, but provide top quartile margins like our investors expect. Great. Joe, Craig, and Pat, thank you very much for the time today. Thank you, John. As always, really appreciate it. Thank you.