U.S. Auto's research coverage. Very pleased to have with us, Dana. I think the way you've described it, so it's power of, focusing on power conveyance? Power conveyance, that's right. Going through actually a very transformational transaction as you're changing your end market mix quite dramatically with the sale of your off-highway business. We have here Tim Kraus, the company's CFO, Craig Barber, who we DIR. We are going to go through a series of fireside chat questions. Anyone's questions, please feel free to raise your hand. We can answer at the end. If you have emails, please email one of my colleagues, Joshua Cho, joshua.cho, ch-o-ch@barclays.com. With that, Tim, Craig, thank you. I wanted to start off with a big picture question. Off-highway is, if I can recall, probably this sale is probably the largest transaction I can ever recall in the years that I've been following your company. You have done a number of transactions. Help us appreciate just broadly how this is going to transform Dana, not only in terms of segment or end market product, but more so in terms of business strategy. How does this change the picture? Yeah, I think the way to think about this is, you know, we've historically operated in light vehicle, commercial vehicle, and what we call the off-highway segment, which is really construction, mining, forestry. We have an industrial business that's in that segment. It's a very broad-based business. I think the way to really think about this is it's really a simplification, right? We're going to radically simplify the business with two end markets, much more limited group of customers, and a product portfolio which is really identical to what we have today, but again, very focused on those end markets, which even for light vehicle for us is primarily on the driveline, large trucks and SUVs. I think that's the big part. Obviously, as you mentioned, it's a milestone event for Dana. We've had the off-highway business for a very, very, very long time. I think it's the right time to make that change in strategy. We'll be nimbler. We're going to focus on a great group of customers, products, technologies that we think are going to be able to really drive the company and help grow the company in the future. Great. Let's pivot to the near term. There's a number of supply chain disruptions that we're seeing right now for Novelis, Nexteer. You don't really have much in the way of JLR exposure, but maybe you could just talk about what you're seeing on the near term on these supply chain disruptions and how that maybe influences the upper versus lower end of the guide. Yeah, I mean, obviously, you know, we're always subject to various supply chain disruptions. You know, if you go back a few years, we had a lot of issues around chips. I think, you know, we're managing through it. It's really limited, at least right now for Novelis, to Ford. The good news, I think, for us is the products that we're on tend to be some of Ford's more popular and higher profit margin products. You know, think Super Duty. From our perspective, you know, much like the chip side, we think that what we would expect is that they'll allocate what they do have to the products that are highest demand and highest profit. I think that really bodes well for us. If you think about low end, high end of range, I mean, we've in our forecast for the balance of the year, we have assumed what we think the impacts from those disruptions will be and are largely in line with what our customers have been saying publicly. Okay. Just as far as the margins in the fourth quarter, which are a pretty material step up versus what we saw the first three quarters, roughly almost 11% in the fourth quarter, you've been running for 8.5% in three Q. Talk about a number of things in terms of incremental cost saves, some EV cost recoveries, performance mix. Maybe just unpack those points and what's the line of sight to that large step up in margins. Yeah, I mean, I think if you unpack it, the biggest one is cost savings. We have complete sign-on. Most of that's been completed as we kind of come through the quarter to get those savings. I would put a zero risk on our cost savings for the year and for the quarter. You think about recovery. We took a small charge in the third quarter. We don't see much risk in recovering that in the fourth. Those discussions with the customer are well down the path, and we fully expect that that's going to happen. The last one is really mix. And, you know, as we sit here today, you know, almost two thirds of the way through the quarter, much of what we thought was going to happen relative to mix is occurring. If that continues, we have fairly high confidence that we'll have a good line of sight to deliver the quarter that we forecasted during the earnings call last month. Okay. Related, I think the number that is most surprising and interesting to people is your margin target for next year, 10-10.5%. It's just, it's really a reflection of, I mean, you're on track for, I think it's 8% this year. Even that is a sharp improvement versus where RemainCo previously was. That was like a 5-6% margin. You've listed a number of drivers: cost saves, stranded cost elimination, ops, premium business. Let's maybe unpack those. Let's just start with the cost saves. $310 million is the target. You're going to exit with the full run rate. What else needs to be done in 2026, and especially around eliminating the stranded cost, which you think you said is like $35-$40 million? Yeah, I think for the, so you're right, $310 million, most of that's done. We'll get the run rate flowing through as we move into next year. We have exceedingly high confidence, not going to be an issue. On the stranded cost side, it's a mix. We have some Transitional Services Agreements with Allison. We'll be providing some of that. Some of those costs that are going to go away will need to be kept and will be covered through charges for those services. As we move through the year, we're going to be able to take those down. Some of our contracts that we're going to be exiting because of the smaller business, other is just natural reductions as we've sold the business that'll come out. Think of, you know, insurance or audit fees. Those are natural things that end up coming out of the business as we just shrink the business. Yeah, I mean, I think our ability to cut that down and then really exit and get into next year and really have those out of the business, we have a really high confidence in a playbook that we'll run. We know where the costs are. We know what we have to do to get them out. If there's some that just can't go out, we have other levers we'll pull to make sure we have those offsets. Okay. Next bucket is the operating performance. I think that was what perhaps caught people by surprise is that even after all of these $300 million of cost saves, you've talked about extra cost levers more so, I think, on the factory level. How long dated are these? You know, what needs to be done to unlock those saves? How much runway is there? I think there's a lot of runway here. When we think about next year, we have an ongoing cost improvement plan that's on the plant floor. We do it every day. Usually the way to think about this is those are the improvements that are offsetting the natural inflation and price downs that are in the business. From what we've done over the history and now with this better focus on the business, we do see additional improvements that we can make on the factory floor. Those should start flowing through as we get into, you know, really sort of the latter part of the first half and into the back half of 2026. You can think of opportunities on efficiency on the plant floor, some automation. I mean, there's a lot that we haven't done yet to improve the operating performance at the plant level. You know, our ops guys, I mean, they're kind of chomping at the bit to have us give them the capital and the dollars that they need to go get it. We're really excited about what we think we can do with the business from a plant floor efficiency perspective going forward, not just in 2026, but out into 2027, 2028 as we sort of move through the back half of the decade and through the long range plan period. Can you talk about automation? Because I think this is coming up a lot amongst your supplier peers. Where are you right now in automation? What's the opportunity? What's the cost to get that opportunity? Yeah, I would say the way to think about automation, and we're not talking about big complicated, this is really tried and true, you know, robot, cobot type stuff that from an industrial perspective has really been around for the last 15 years. We're behind a level of automation and really use of efficiency in our plants relative to general industrial players. Some of that's because over the last, you know, five, six, seven years, we've been really focused on the EV space in developing and growing that portfolio and didn't really have that focus or the capital really to spend on it. Now we do. We're going after that with a lot of speed and diligence. Look, it comes with CapEx, absolutely. I think we've said, look, we're going to spend about 4% of sales next year. That's still a good target from our perspective, you know, plus or minus. We think within that view, we can allocate the capital that we need in order to push the efficiencies on the plant floor forward. Maybe just another point within that bucket, restructuring, I think you've said has been a, there's some initial drag because of the cost. Maybe you just talk about what's going on with restructuring and then when that flips. I think you look at us this year from a restructuring perspective, you know, our cost out program is probably going to end up costing us, I don't know, $70-$80 million. When you go into next year, you know, there's going to be a meaningful reduction in that. Now we'll have to still spend some restructuring dollars to take some of the stranded cost out. So we won't get the full benefit of the price down, but it'll be meaningfully lower, tens of millions of dollars lower next year than we have this year, at least as we see it today. Okay. Third bucket here, and I know we're going through each of these buckets, but like these are all, I think we've gotten a lot of questions about sort of the path to these ambitious targets. So the backlog, right? You said 60 basis points here. Maybe we could just level set. I know you'll give your update in January on where the backlog stands. The last update was, I believe, $300 million for 2026. Maybe just conceptually walk us through the pluses and minuses that we could be seeing because I think, you know, we just had S&P up earlier and they had a slide. EV is all obviously delayed. You've seen a lot of ICE extensions. This has changed the way maybe automakers are thinking about the cadence of their programs. How much does this impact you? Absolutely it impacts us. You know, about 70-75% of our backlog was EV related with lower volumes, delay in programs. It certainly will have an impact on the backlog. I think on the flip side of that, we're also seeing pickup. A good one is the expansion of Super Duty production into Canada. You know, that's going to be a tailwind for us relative to backlog. I think, you know, as we sort of think through, you know, our CV business, we continue to, you know, our growth is not just backlog, right? It's also market. We continue to gain market share on the commercial vehicle side of the business. We see that being able to contribute to our margin expansion next year as we come out of and exit this very transitional year in 2025 and get into a bit more stable and new Dana realm for 2026. How does reshoring change the picture on the backlog? When does that business more so start to, is that more of a 2027 opportunity? I think it's a little bit longer. I mean, you think about the products that we supply. They're safety important products, right? They require testing, repeat papping from the customers. Obviously, what the customers do relative to platforms, if they want to reshore, that's a longer term item. I don't see reshoring as a big story in terms of Dana for 2026. Sure, there's going to be some of our components we might be able to do something with, but large scale, either customer driven or from our own, that's probably a bit further out. Certainly something we're looking at and given our footprint, have the ability to provide more domestic production for our customers if so needed. Okay. A couple of items that are not in that list, but I think that you have probably been asked in the past. The compensation environment, right? Let us just start. You obviously had a lot of EV programs that you were on and the volumes have not materialized. How much runway is there to get commercial recovery? Because I think you have done at least more broadly on inflation, you have done well. This one is a little different. How do you look at that? Yeah, look, I mean, you know, we have really good relationships with our customer. We have high quality products, technologies that they want and need for their products. You know, it's obviously not easy to have a pricing discussion with your customer. I think we're at different stages on different programs. Really some of it depends on, is it a delay? Is it a cancellation? Is it a volume drop? They all have a different situation that we have to deal with with the customer. I think the customers are very much open and understand that, you know, we built a business and made investments based on volume assumptions. While they do not guarantee volume, some of these delays and drop-offs, obviously coming back for recovery from a price perspective is not unexpected from their side. On the tariff side, I think you're exiting this year with a $20 million net drag. The line of sight to recovering that? Yeah, I think, you know, we believe we're going to be able to recover meaningfully almost all that. I mean, some of it's timing differences. It depends on the customer. Generally speaking, we think we'll recover most of that on a timing basis as we move into next year. I think longer term for tariffs, like, you know, my concern, I think, is if more of these tariffs start getting passed through to consumers, how does that affect demand? That's probably a bigger impact long term that could be on all of our businesses if consumer demand for cars and trucks ends up being muted because of pricing. Okay. Related. The EV environment is obviously weaker. How does this affect maybe the resource allocation on EVs, the R&D profile? How do we think about that? You know, I think the easy way to think about this is over the last five, six, seven years, we've invested a considerable amount developing the products and the technologies for electric vehicles. That's largely behind us. We have the portfolio. You know, that's a big part of the cost savings. We took a lot of costs out of the business related to EV programs. Now our view is, hey, if you, we have programs and products that are on the shelf. If you want us to incorporate that into your vehicle, whether it's a commercial vehicle or light vehicle, our expectation is that the customer is going to either, you know, guarantee volume, you know, pay for the engineering upfront, and/or the CapEx. I think we're taking a much more pragmatic view of the amount of risk we're willing to take in the EV programs. The good news is we have the technologies and the products off the shelf. If you think about commercial vehicle, whereas many of these OEMs were looking for bespoke products or products that really fit their needs, we're now saying, hey, look, we have a product, a very capable product on the shelf. We can tailor it to your needs. You can pay for that incremental, relatively small amount of dollars for engineering. If you want something that's completely unique, you're going to have to pay for it. I think that lowers the risk profile for us and also gives the OEM an opportunity where we're in this much slower ramp to get a product, get a vehicle out into the market. If he wants a different driving experience, we can change software and make it differentiated from that way at a much lower cost. That seems to be, you know, really be attractive to a lot of the OEMs as we kind of go through this changing in terms of the EV market and outlook. I would gather because a number of the automakers are talking about opportunities for improved mix, not necessarily on more trucks, but the variants. I'd imagine that, you know, that's the type of thing where some of these larger vehicles or different engine variants that probably come with a different driveline variant, that can be accretive to you? Yeah, I mean, we're talking about mix in the fourth quarter. Those are some of the things we're exactly talking about as we build a specialty vehicle or, you know, a limited run. You know, think of, you know, things like the Raptor or, you know, Stellantis and Chrysler, you know, Jeep's famous for this with the Wrangler. They come out with the Barbie Wrangler, the Jeep, you know, the Beach Wrangler. These all come with specialty axles, different engine configurations. Those are always an opportunity for, and they get, they obviously charge a higher price. We look to do the same thing with our product to them. Absolutely is an opportunity for us across the entire product line. Because those CPVs have probably got to be pretty elevated. Yes, they are. Can you unpack what's going on in the CV market and how that's impacted? Because obviously it's been very difficult. I think you've said no green shoots through mid-2026. How are you managing this challenging environment in CV? Maybe you could just unpack, because I think people are maybe a little less aware that people think CV and they think, okay, this is all just North America class eight, but you have some aftermarket, you have some medium duty. Just unpack the different dynamics within CV. Yeah, I mean, half our business in CV, I mean, we are, I mean, most of our CV business is North America. We have a decent sized business in South America and a much smaller business in Europe. From a North American perspective, you know, our class eight aftermarket is about half the business. The rest is vocational medium duty. It's a bit of a mixed bag. Our largest customer is PACCAR. We also supply Volvo and Navistar. We also supply into the commercial vehicle variants on, say, like the Ford F-Series. They're 650, they're 550, and they're 650. Yeah, it's been a pretty difficult year in terms of volume across that business. Again, we don't see that really improving as we kind of move into next year. We don't see it getting any worse. Maybe if we think about the back half of next year, we'll start to see a little bit better. I mean, right now we're not seeing really anything. To answer your question, how are we thinking about it? You know, we're going after, we're still going after cost. We're making sure we're running the factories where we need them to be, making sure that we have the programs we need to take those costs out to limit the downside on the contribution margin that comes with obviously the lower sales. It's not easy. It certainly has an impact on us. You can't lose that kind of, those kind of units and not have some impact. Certainly if we can't get it out of the direct, we'll find other places to go flex and offset the impact of that volume loss. The decremental margin on that immediate loss business, is it fair to say that absent whatever cost actions you're taking, because there's maybe some flexing that you can do, that those are more muted, how do we think about? Yeah, they're muted. I mean, we obviously, you know, aren't going to just stand by and let the contribution margin flow through. We'll absolutely go through and do what we can to mute that. There's obviously an impact to margin. You can't offset all of it. The guys are, look, this is what we do every day. The teams are really good at it. We just continue to drive to take the costs out that we can and, you know, make sure we have the downside as muted as possible. Okay. Even taking into account some weakness in CV, you still have line of sight to that 10-10.5% margin. Absolutely. Now, don't forget, like while the broader market may be down in CV, we're also gaining share across many of our customers. So while it's not one for one, you know, while the overall market's down, if we gain more of that share, we actually make up some of those units just on a market share basis. Yeah. Okay. Speaking of the competitive dynamics, one of your competitors on the light vehicle side is obviously making a very large piece of M&A. Do you see the competitive balance or dynamics changing at all? Do you think, where do you think you are from a cost perspective versus your competition? Look, I don't measure myself or the company against our competitors. I certainly do from a profitability perspective, right? We're obviously marching towards a much more profitable base. I don't think bigger means better. I'm really happy with the businesses that we're going to own when we finalize the sale of the off-highway business. I love the products we have. I especially love the platforms that we're on. You think about our light vehicle business, our four largest platforms, Super Duty, Bronco, Ranger, and Wrangler, right? I mean, those are four of the most iconic nameplates you have in North America. And they have our content on them. You know, we're going to continue to execute and continue to drive cost out of our business and really get the profitability to where it needs to be so that, you know, our shareholders and our customers and our employees are all really, you know, satisfied at what we're able to do. I'm really excited. I think that I love the size of the business. You know, I'm looking forward to growing the business and growing it profitably and really seeing what we can do with this much more focused business that we're going to own. Okay. Let's talk about free cash flow capital allocation. Maybe we just start with the portfolio. You're obviously doing a very large change, but I think even on, maybe it was two calls ago, Bruce had alluded, there's maybe more pruning and trimming that's going on. How do we think of maybe other changes to the portfolio that may need to occur? Yeah. The way to think about the pruning, we have a lot of different parts that we sell within the business. You know, you think of us as axles and drive shafts, but we have a full range of thermal products, sealing products, and we sell them not only into the light vehicle and commercial vehicle, but into industrial and in off-highway, which we will still continue to own. I think, you know, as we again have, you know, got more focus on the businesses that we're going to retain, one of the things that became very clear is like, you know, we've got groups of products where we make very little money or might lose money. We're really going through a very orderly and deliberate process in deciding, hey, is that a product I'm still going to sell? I mean, is that a part number that I'm still going to sell to my ABC customer? If he doesn't want to pay to make that part profitable, then he can take his business elsewhere or he can do a last time buy and that'll be fine. What you're going to see is our ability to maybe have a little bit of shrinkage on the top line, but the rest of the business becomes far more profitable. I'm happy to have a slightly smaller top line and a much more robust cash flow and margin profile going forward. Look, if we free up enough space, fine, we can fill that up with more profitable business. We could restructure and take fixed cost out of the business. We've got a lot of other options. The key here is let's focus on the products and the customers where we can make money and really get a return that's acceptable to us and to our shareholders. I know I told you I was doing capital allocation, but you just triggered another margin question, which is how much room is there to reprice certain contracts that maybe previously hadn't been priced at appropriate economics? Is that another opportunity in addition? Absolutely. I mean, this is kind of what we're going through now, especially on the smaller side of the customers, right? Most of these customers, you know, we don't have LTAs with on some of these, especially the non-automotive customers. This is going to be the new price. If you want to go someplace else, that's okay. If you want us to work with you and how do we deal with it, that works for us too. We are not going to continue to make under our hurdle rate or lose money on product. It's just not where we're going to spend the time or energy. Yeah, absolutely. I mean, I think there's a lot of room past 2026 to continue to grow the margin in the business across the board. Okay. I'll flip it around. Is there any appetite for bolt-on M&A? You know, I think as we look in the near term, if you're going to get into 2026, you know, I really don't think that, you know, you never say never. I mean, who knows what could happen? We are really focused on the business that we're going to have. Our light vehicle and our commercial vehicle business, really making sure that, you know, we are 100% focused on that business. As we move through 2026 and we deliver that, I think, you know, if there's some opportunities to use our technologies and find adjacent products and if that requires some M&A, sure, we certainly look at it. Right now, I mean, we're really, really focused on the new Dana, the businesses that we're going to own and making them as profitable and as dynamic as we can for the customer and for our employees. That is really the focus for Bruce and myself and the entire management team. You think about some of the stuff we were talking about at the plant floor, right? That is a really exciting part. I know our Head of Operations, Chris Clark, is chomping at the bit to have us, you know, let him loose and really see what we can do. We are really focused on the business, on our customers, and on our employees to really make new Dana the absolute best it can be. Okay. Can you talk about the free cash flow profile? And specifically, I know you've given this target roughly 4% of sales. That implies next year roughly $300 million if your revenue is flattish. We also know that off-highway the last few years has really been the lion's share of your free cash flow. What gives you the line of sight that I know there's a large margin expansion and even expansion of the base business, but that you can get that cash flow conversion? Maybe you can just remind us that I know you're going to give us a number that's adjusted, so to speak. How much is that going to be weighed down by maybe a lot of one-time costs or restructuring? First thing, you know, typically when we are adjusted, EBITDA would have restructuring pulled out. We usually historically have not adjusted free cash flow. We always have the cost of the restructuring in our free cash flow number. We gave you the 4%. That includes, you know, a deduct for any of the restructuring costs that we may need. That's number one. Number two, you know, if you think through this, you're right, we're going to lose the contribution from free cash flow on the off-highway business, but that's going to be more than made up for in terms of the, you know, couple hundred basis points expansion in the margin. Don't forget, we're going to have significantly less interest, cash interest. We're going to pay it down $2 billion worth of debt. We're also going to have a much lower cash tax bill because we're selling the most profitable business that we have and the business that we continue to own, primarily North America, where we have large NOLs and credits. Our cash taxes and cash interest are going to come down. When you take all those puts and takes, and we'll obviously have slightly lower restructuring costs, the math works pretty easily to get to 4% free cash flow on the business. Can you talk about the CapEx profile going forward? Because you're at 3% this year. You said 4% for next year, but why would the CapEx pick up? What's the right way to think about CapEx? Yeah. So we've got some program renewals. I mean, our program CapEx tends to be, can be lumpy depending on where we are in refresh cycles for the. We are going to make investments, as we talked about, you know, on the plant floor. That'll have some of that. You know, we've been through a pretty sizable investment cycle for EV. We think there's probably some delayed maintenance CapEx that's in there as well. We'll have to spend some more just to make sure we've got what we need and that the plants are operating where they need to be. The net of all that gets you somewhere right around 4%. Questions? You're thinking about the cash tax rate then? You know, it's a hard one to answer. I mean, it'll be low relative to, I mean, because our North American business isn't going to have much of a cash. Maybe in the teens? Yeah, it's probably decent. I mean, we have to kind of get through and sort of sort through it, but it's going to be. That's a couple of years. Oh yeah, it should be. Absolutely. Second quick one is, what's the incrementals on your commercial vehicle revenue? Because as you mentioned, that is at very low production levels now. It's going to have a nice upturn at some point, maybe second half. What's the incrementals on that? They're fairly typical for what our contributions, 20%-25%, depending on the product. I mean, it differs depending on which part of the market gets recovery and where it comes through, but somewhere in the 20% on a contribution up is reasonable. Last quick one is, with all the automation and improvement, it sounds efficiency, productivity, could use some throughput to really leverage that on your light vehicle exposure. As Dan mentioned, we've seen the guys here from Cox S&P Global, and they're all saying there's no growth in the North American market next couple of years, maybe even lower volumes. You know, these programs you're on are fantastic, but they're already doing quite well. The F-Series, the Wrangler, the Bronco, are you guys expecting those to grow volume in the next three years? Or are there other platforms you're targeting that you're going to get? There's a couple of things. You know, Super Duty's got volume expansion, right, coming. I think the other thing, and Dan mentioned this as well, is, you know, there's a lot more content. Like the OEMs want a different mix, which comes with more content. Even without any volume increase, you know, that content differential can really help add. When you're thinking about, you know, better content across a couple of hundred thousand units on the light vehicle side, it adds up pretty quickly. You know, those are the things we're thinking about. Look, we are seeing, you know, extensions, you know, new RFQs coming in for products from customers on the ICE side. We're really excited about the opportunities that we might be able to have as we kind of move through the remainder of this year and through 2026 in terms of new business that we can win. For me, is that going to be then Super Duty's going to be more expensive? It depends on what they make. Super Duty's probably not a good one because, I mean, it's really a work truck at the end of the day. Think of special variants or new variants for Wrangler. Wrangler comes out, we've got better content, right? They wanted, it's a bit of an arms race. They wanted more content to look to that like we have on the Bronco. That comes with a more expensive axle, same number of units, or probably a bit more units because they weren't running particularly well. There's that. It's really that kind of thing that comes through and really is helpful in terms of driving some sales growth. Okay. I think we'll leave it there. Great. Tim, Craig, thank you so much. Thanks.