Good morning, and welcome to the Lear Corporation Second Quarter 2023 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Mr. Ed Lowenfeld, Vice President of Investor Relations. Please go ahead, sir. Thanks, Jeff. Good morning, everyone, and thank you for joining us for Lear's Second Quarter 2023 Earnings Call. Presenting today are Ray Scott, Lear President and CEO, and Jason Cardew, Senior Vice President and CFO. Other members of Lear's senior management team have also joined us on the call. Following prepared remarks, we will open the call for Q&A. You can find a copy of the presentation that accompanies these remarks at ir.lear.com. Before Ray begins, I'd like to take this opportunity to remind you that as we conduct this call, we will be making forward-looking statements to assist you in understanding Lear's expectations for the future. As detailed in our safe harbor statement on Slide 2, our actual results could differ materially from these forward-looking statements due to many factors discussed in our latest 10-Q and other periodic reports. I also want to remind you that during today's presentation, we will refer to non-GAAP financial measures. You are directed to the slides in the appendix of our presentation for the reconciliation of non-GAAP items to the most directly comparable GAAP measures. The agenda for today's call is on Slide 3. First, Ray will review highlights from the quarter and provide a business update. Jason will then review our second quarter financial results. Finally, Ray will offer some concluding remarks. Following the formal presentation, we would be happy to take your questions. Now I'd like to invite Ray to begin. Thanks, Ed. Now, please turn to Slide 5, which highlights key financial metrics for the second quarter. Lear's positive momentum accelerated in the quarter. $6 billion of total company revenue was a quarterly record and an 18% increase compared to last year. Core operating earnings were the highest in over two years, increasing by 61% from last year. Adjusted earnings per share increased 86%, and operating cash flow improved significantly to $311 million for the quarter. Slide 6 summarizes key highlights from the quarter. Both Seating and E-Systems continued their positive momentum with significant improvements in operating results for the quarter. Sales growth outperformed global industry production, driven by strong growth in E-Systems. The pace of new business awards continues to accelerate in E-Systems. The average annual revenue of awards we have won to date is over 50% more than last year. In Seating, we continue to build our thermal comfort capabilities. Today, we announced we are working with Valeo to explore opportunities to integrate Valeo's HVAC expertise with Lear's thermal comfort technologies to optimize heating and cooling within a vehicle. This energy-efficient solution is expected to improve comfort for the occupants while extending the range for electric vehicles. As announced during our Seating Product Day, we entered into a partnership with Bentley to provide the first commercial application for our INTU comfort and wellness technology. We continue to return cash to shareholders. Year-to-date, we have repurchased over $63 million worth of stock in addition to our quarterly dividend. In early July, we published our 2022 Sustainability Report, which highlights the progress we have made towards achieving our goals for climate, sustainable product development, and DEI initiatives. We continue to be recognized for our focus on our employees. Lear was named one of the top 200 Best Companies to Work For by U.S. News & World Report. In late June, we were excited to hold our first-ever Seating Product Day, where we outlined the steps we are taking to extend our leadership position in Seating. During the event, we highlighted innovative technologies and strategic initiatives that will enable us to continue to grow market share and expand our segment-leading margins. Slide 7 highlights the major announcements made at our Seating Product Day. During that event, we described our plan to deepen and widen our competitive moat in Seating. As we changed the sourcing model for thermal comfort components by offering a better value proposition to our customers, we increased Lear's 2023 outlook, along with our long-term market share and margin targets in Seating. We highlighted new business awards supporting the significant opportunities we have identified as we build out our thermal comfort systems business. Our first production award for INTU and FlexAir demonstrates our success bringing innovative technologies to market. INTU is our intuitive seating system, and FlexAir is our sustainable foam alternative that is 100% recyclable and delivers a CO2 emissions improvement of 50% over traditional foam. Turning to Slide 8, I will provide some more details on the progress we have made in E-Systems. The second quarter's results marked our fourth consecutive quarter of year-over-year margin improvements in E-Systems, and the business is on track for further improvements in the second half of this year. Our focus on core products, where we can provide our customers with unique solutions, has resulted in an acceleration of business awards. In wiring, we have won new contracts for both high voltage and low-voltage harnesses with several OEMs, including our first wiring award with BMW. Consistent with our strategy, we continue to diversify our customer base, and this award is another example of leveraging strong OEM relationships across business segments. A significant driver of the year-over-year growth in business awards is our electronics portfolio. As we mentioned last quarter, we expanded our leadership in high-performance BDUs with an award from Stellantis. During the quarter, we also began shipping pre-production parts for our ICBs to General Motors to support their planned ramp, planned ramp of the Ultium battery production. In total, 50% of our year-to-date awards are, are for electrification. We continue to execute our strategy to grow connection systems. During the quarter, we expanded our global engineered component capabilities by opening a plant in Morocco. We're also increasing our capabilities and capacity in China. These awards, along with the opportunities we are pursuing in the second half, put us on track to achieve our third straight year of $1 billion of sales backlog for E-Systems. Now I'd like to turn the call over to Jason for the financial review. Thanks, Ray. Slide 10 shows vehicle production and key exchange rates for the second quarter. Global production increased 15% compared to the same period last year, and was also up 15% on a Lear sales-weighted basis. Volumes were higher in each of our key markets, with North America and Europe up 15% and China up 19%. From a currency standpoint, the U.S. dollar weakened against the euro, but strengthened against the RMB compared to 2022. These two largely offset. Revenues in the quarter were also negatively impacted by other currencies, which weakened against the dollar, including the South African rand and Korean won. Slide 11 highlights Lear's growth over market. For the second quarter, total company growth over market was 2 percentage points, driven by strong growth over market in E-Systems of 11 points. Growth over market was particularly strong in Europe and China. In Europe, sales outperformed the industry production by 6 points, with both business segments benefiting from higher volumes on the Land Rover Range Rover and Defender. New programs, such as the BMW 5 and 7 Series in Seating and new wiring and electronics content on the Volvo XC40 and XC40 Recharge in E-Systems, contributed to the strong growth in the region as well. In China, growth over market of 10 points was driven by strong growth in both business segments. The growth in Seating resulted from the new Geely Zeekr program and other sales to BYD. In E-Systems, growth was driven by a strong production on the Volvo XC40, XC40 Recharge, and the Polestar 2. In North America, total revenue grew more than 11%, excluding FX, commodity, and acquisitions, due to volume increases and new business in both segments. While Seating revenue increased by almost 9%, consistent with our expectations, unfavorable platform mix on several key programs resulted in total company growth that was 4 points lower than the industry. For the first half of the year, total company growth over market was 3 percentage points, with Seating growing 3 points above market, and E-Systems growing 6 points above market. Turning to Slide 12, I will highlight our financial results for the second quarter of 2023. Sales increased 18% year-over-year to a record $6 billion. Excluding the impact of foreign exchange, commodities, and acquisitions, sales were up by 17%, reflecting increased production on key Lear platforms and the addition of new business in both segments. Our operating earnings were $302 million, compared to $187 million last year. The increase in earnings resulted from the impact of higher production on Lear platforms and the addition of new business. Adjusted earnings per share improved significantly to $3.33, as compared to $1.79 a year ago. Operating cash flow generated in the quarter was $311 million, compared to $11 million in 2022. The increase in operating cash flow was due to higher earnings and an improvement in working capital relative to last year. The improved working capital was driven primarily by the timing of customer and supplier payments, as well as improved performance in both businesses with inventory management. Slide 13 explains the variance in sales and adjusted operating margins in the Seating segment. Sales for the second quarter were $4.5 billion, an increase of $594 million or 15% from 2022, driven primarily by an increase in volumes on their platforms and our strong backlog. Key backlog programs include the BMW 5 and 7 Series in Europe, the Chevrolet Colorado, GMC Canyon, and Mercedes EQE and EQS SUVs in North America, as well as the Geely Zeekr and NIO ES8 in China. Excluding the impact of commodities, foreign exchange, and acquisitions, sales were up 14%. Core operating earnings improved to $322 million, up $89 million or 38% from 2022, with adjusted operating margins of 7.2%. The improvement in margins reflected higher volumes on their platforms and our margin accreted backlog. Favorable net performance was partially offset by higher engineering spending and launch costs to support conquests and other new business awards. Slide 14 explains the variance in sales and adjusted operating margins in the E-Systems segment. Sales for the second quarter were $1.5 billion, an increase of $334 million or 28% from 2022. Excluding the impact of foreign exchange and commodities, sales were up 26%, driven primarily by higher volumes on key platforms and our strong backlog. Key backlog programs include the Volvo XC40 Recharge in Europe, new wiring programs with a global EV OEM in North America and Europe, the Buick Electra E5 in China, and the Ford Super Duty in North America. Core operating earnings improved to $63 million or 4.1% of sales, compared to $24 million and 2% of sales in 2022. The improvement in margins reflected higher volumes on their platforms and a margin accretive backlog, partially offset by the dilutive impact of passing through higher commodity costs to our customers, increased engineering and launch costs to support new programs, and the impact of foreign exchange. Looking ahead, net performance is expected to improve due to lower launch costs, as well as efficiency improvements that started to deliver results late in the second quarter and will have a larger impact in the second half of the year. Shifting to our 2023 outlook, which was updated at our Seating Product Day on June 27th. Slide 15 provides global vehicle production volumes and currency assumptions that form the basis of our full-year outlook. We base our production assumptions on several sources, including internal estimates, customer production schedules, and S&P forecasts. At the midpoint of our guidance range, we assume that global industry production will be 4% higher than in 2022, or 5% higher on a Lear sales-weighted basis. At the high end of our guidance range, our global production assumptions are generally aligned with the S&P forecast. From a currency perspective, our 2023 outlook assumes an average euro exchange rate of $1.07 per euro and an average Chinese RMB exchange rate of RMB 6.96 to the dollar. This reflects exchange rates of $1.05 per euro and RMB 7 to the dollar for the balance of the year. Slide 16 provides more detail on our current outlook. On June 27th, we increased our 2023 outlook for net sales, core operating earnings, and free cash flow. As I will describe in more detail on the next two s lides, the midpoint of our sales guidance includes $350 million of contingency for potential downtime from customer labor contract negotiations. To the extent customer production disruptions are minimal, we would expect sales, earnings, and cash flow to be closer to the high end of our guidance range. On the next two s lides, I'll provide more details on the key assumptions reflected in our second half outlook for both Seating and E-Systems. Slide 17 compares our second half outlook to our first half actual results for sales and core operating earnings in the Seating segment. We are forecasting the midpoint of our second half sales outlook to be approximately $8.1 billion, down $817 million from our first half actual results, reflecting lower volumes due to seasonal shutdowns in the third quarter in North America and Europe, as well as the impact of foreign exchange. The midpoint of our revenue guidance in Seating protects for approximately $300 million for potential effects of customer labor negotiations. The midpoint of our second half operating income outlook is $522 million, or 6.4%. At the high end of our guidance range, we expect Seating margins at 6.9%, compared to 7% in the first half of the year. The reduction in operating income reflects the expected impact from lower volumes on our Seating platforms, partially offset by the benefit of commercial negotiations and improved operating performance, as well as savings associated with restructuring actions to optimize capacity, improve efficiencies, and lower labor costs. We do expect lower margins in the third quarter due to seasonal volume and higher launch and engineering costs to support our strong new business backlog and recent conquest awards. Slide 18 compares our second half outlook to our first half actual results for sales and core operating earnings in the E-System segment. We are forecasting the midpoint of our second half sales outlook to be approximately $2.75 billion, down $172 million from our first half actual results, reflecting lower volumes and the impact of foreign exchange. The midpoint of our revenue guidance in E-Systems protects for approximately $50 million for potential effects of customer labor negotiations. The midpoint of our second half operating income outlook is approximately $148 million, or 5.4%, an increase of $36 million from our first half actual results. At the high end of our guidance range, we expect E-Systems margins of 5.8%, compared to 3.8% in the first half of the year. We expect to offset the impact of reduced volumes through a combination of lower engineering and launch costs, performance improvements, and additional commercial recoveries. Our wiring business was impacted by supply issues during the first half of the year, particularly in North America. We saw improvements in plant productivity and efficiencies in late June that carried into July. We expect improvements to continue through the second half of the year. Moving to Slide 19, we highlight our strong balance sheet and liquidity profile, a major competitive advantage for Lear in a rising interest rate environment. The acquisition of IGB was largely financed with a three-year, fully prepayable term loan. We do not have any near-term debt maturities. Our earliest bond maturity is in 2027, and our debt structure has a weighted average life of approximately 14 years. Our cost of debt is low, averaging approximately 4%. In addition, we have $2.9 billion of available liquidity. We remain committed to returning excess cash to our shareholders, having repurchased $63 million worth of stock in the first half of the year, and we continue to repurchase shares in the third quarter. Our current share repurchase authorization has approximately $1.2 billion remaining, which allows us to repurchase shares through December 31st, 2024. Now I'll turn it back to Ray for some closing thoughts. Thanks, Jason. Please turn to Slide 21. The second quarter results illustrate why I'm more confident in the opportunities for Lear and our industry than I have been in several years. We are focusing on areas we can control while continuing to monitor industry and economic conditions that could impact our operations. In Seating, we are executing Phase 1 of our thermal comfort strategy while continuing to develop modular solutions. Working with Valeo, we are exploring innovative ways to optimize occupant comfort while extending EV range. These unique solutions add value for our customers and increase the penetration rates of our thermal comfort components. In E-Systems, our focused product portfolio allows us to optimize our resources and improve margins. This quarter was a key inflection point to accelerate margin improvements through the second half of this year. Through our leadership and operational excellence, we have identified key efficiency opportunities that will improve our cost competitiveness to deliver improved margins and cash flow. I'd like to thank the team for a great first half. I'm confident we will continue to deliver on our goals going forward. Now we'd be happy to take your questions. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we'll pause momentarily to assemble our roster. The first question will come from James Picariello with BNP Paribas. Please go ahead. Hi, good morning, guys. Good morning. Just, you know, with respect to the guide, based on the, the midpoint to high end, you know, swing factors, and Jason, I know you, you called this out, but I just want to confirm: What is baked into the midpoint of the guide with respect to the UAW, you know, labor disruptions potential? Thanks. Yeah, James, we, we included $350 million at the midpoint of the guidance. That's $300 million in Seating and $50 million in E-Systems. Our Seating revenue is more weighted to North America than our E-Systems revenue. It's about 45% of sales in Seating, about 30% in E-Systems. That's why the disproportionate impact on Seating if there were to be a labor disruption. Okay, that's already rolled into the LVP, the global LVP assumption of, of up 4? Yes. Got it. Then just I, I appreciate the first half to second half bridges that are provided, but on a year-over-year basis, how should we be thinking about the commodities impact by segment? To what extent are recoveries already negotiated for the back half? I mean, could this number, you know, move around depending upon the UAW outcome, or, you know, the commercial negotiations largely locked in? Thank you. As I think about the second half, you know, there is some level of commercial negotiation benefit factored into both segments. I think it's 60 basis points in E-Systems and 45 basis points in Seating. The bigger factors that are really gonna drive that second half for us, particularly in E-Systems, are, you know, somewhat in our control. We talked about specifically the efficiencies that we're expecting to see in North America, primarily in wire, but also impacting our electronics business. We really had an inflection point here in the second quarter that gives us a lot more confidence in the outlook for the balance of the year. We saw improvements in June. We saw those improvements and efficiencies continue in July, and so we're on a good trajectory as we head through, through the balance of the year in E-Systems to deliver that sort of 200+ basis points of margin improvement in the performance categories that we outlined on the slide. In terms of commodities, specifically, you know, really, that's reflected in the additional commercial negotiations that we expect to benefit the second half of the year. That's, that's really all we see with commodities. We don't see a lot of movement in raw material prices at this stage. Steel in North America seems to have stabilized. It's come down a little bit here in the third quarter so far, and towards the end of the second quarter. You know, copper's been, you know, pretty stable as well. Not seeing a lot of movement on, on raw materials. We are seeing a little bit of benefit on lower ocean freight rates and, and some of those things sort of on the periphery, but not a real meaningful impact as we think about sort of the balance of the year. Thanks. You're welcome. The next question will come from Emmanuel Rosner with Deutsche Bank. Please go ahead. Thank you so much. Just first to follow up on, you know, this topic of supply issues in in wiring and electronics and the efficiencies that you're starting to see. Can you just provide a little bit more color around what the issue is, basically where, and what you're currently seeing in terms of that situation? Yeah, Emmanuel, the first half was more challenged with some of these, called non-recurring events or cost events that we're struggling with. There was a fire with one of our major suppliers that impacted production at our facilities, just because of the you know, ability to get material. We are staffing up and launching and, and the challenges of getting labor in an efficient manner within our facilities and just the training of that labor. The, the, the ability for us to get the, the headcount in was at, at a higher level than what the, the production volumes were. Then there's just some premium costs that got associated with the transportation costs, because when you're running in an inefficient environment like that, you're running your plants intermittently and then shipping out, and then having to catch up and shipping those parts through premium transportation. A lot of that, if not most of it, is dissipated, it, it's gone. The challenges that we saw in the first half were due to those, those type of circumstances. What we're seeing right now and why I couldn't be more excited, Jason said it again, it was a inflection point. The second quarter exceeded our own internal expectations despite those challenges. What we're seeing right now, early indications, is we're on track, on target for these improvements of inefficiencies within our plants. You know, we had, you know, if you think through from last to the early part of this year, we've already achieved 50% of the improvements required, with already a good momentum heading into this quarter of seeing the trajectory of the improvement and trajectory of efficiencies at our plants. We're very optimistic about the second half. We have work to do, but what's nice about this, Emmanuel, is that it's in our control. You know, you know, there for a period of time, there was a lot of things that we're working and working with suppliers or transportation companies or, you know, downtime with our customers. These are things that we can control and we're good at. I feel very positive and optimistic about the second half because it, it's in our backyard. It's things that we're good at. We did manage through those things, but we are seeing a much brighter future in some of those challenges that we had in the first half. I don't know if you want to add anything else? That's great. Great to hear. My second question is on the Seating margin outlook for this year and then your longer term targets. I think this year's margin, if we went for net commodities and inflation, I think would be something like maybe 8.3% in, in the outlook, you know, in, in, in 2023. I think at the same time, you know, the Seating there, I think you're, you're targeting, you know, better than 8.5%, you know, four years out. What is the outlook for, you know, recovering over time some of these commodities and, and inflation inefficiencies? Is there sort of like a path for that? If that's the case, combined with, you know, a lot of volume and, and growth of the market over the next three to four y ears or so, why would the target just be, you know, similar to what you'd be earning this year, if you went for these headwind? Yeah, I think, maybe just taking a step back. As I look out to 2024 and 2025, you know, obviously, we've got to finish up this year, and there's a lot of work to do to deliver the guidance that we've outlined today. You know, if you look at the high end of the guidance range, Seating is at 6.7% for this year. You know, as we communicated in the Seating Product Day, we have a line of sight on 8%+ in 2025. You know, a portion of that, as we outlined during that discussion, is driven by volume and backlog, about 60 basis points, similar amount on performance. And that performance, Emmanuel, includes clawing back, continue to claw back some of the wage inflation that we've absorbed, some of the commodity costs that we've absorbed. A portion of it is attributed to that. And then the balance of that is really just executing on our restructuring plans and other improvements, plans that we have in place operationally, on components that we buy, DAV or, or cost technology optimization, cost reduction activities that we do year in and year out. The last piece of that, that margin improvement is, you know, 20 basis points that we attributed to improvements in the thermal comfort systems business, which is going to come through a combination of insourcing business to ourselves that's currently purchased on the outside, new business growth in that, in that segment, the restructuring benefit of, of shifting work from a higher cost Eastern European plants to North Africa, which we're in the middle of doing right now, and then other synergies as we fully combine the Kongsberg and IGB organizations. So there's a pretty clear line of sight to that 20 basis points as well. As I think about, you know, this year to next year, you know, it, it's not necessarily linear from 6.7% to 8% in 2025, but I would expect to see a step up and a step towards achieving that, that medium-term target of 8% in Seating. I misspoke, the 6.7% is the midpoint of the guidance range, not 6.9% is the high end of the guidance range. Just to clarify that. Thanks. Okay. Thanks for the comment. If you have a question, please press star then one. Our next question will come from Dan Levy with Barclays. Please go ahead. Hi, good morning. Thank you. Morning, Dan. Hi, good morning. Wanted to start first just with a question on EV broadly. We've seen, I guess, some commentary from on pullback in spend. Slower ramps from Ford and GM, just in a variety of areas on the EV front. You've talked about Ultium in the past, and that seems to be, you know, there seem to be some signs that that's going a little more slowly. Bolt is being included now in their targets, when that was supposed to be discontinued. To what extent does this maybe slow down in the pace of EV from some of your customers impact you? Well, you know, a couple things. One, we have really strong relationships with our, our customers and, and committed longer-term contracts with, with some of these awards. I think it's important to note that if there are changes or shifts, that we work in a very collaborative way with our customers on any type of changes to, to their, you know, current strategies. I, I, I'm confident, and, you know, if there are shifts or changes within volume or ramp up or product lines, that we've been able to work with our customers to really balance those type of expectations out in, in regards to revenue. You know, there have been changes. We've been very selective and very specific on what customers we're, we're, we're quoting and, and how we're positioning our own business for a longer term success, like the Battery Disconnect Unit or the ICBs, where we can scale those across multiple platforms, multiple car lines, and multiple solutions. We continue to work with our customers as, as they work through their, their own strategies. But I would say that it starts with a, a very good relationship with our customers and understanding where they're going longer term. Yeah, the only thing I would add, Dan, is that, you know, we are, are being very cautious with our investments and, and, and capitalizing these facilities for the ramp up. Just building on Ray's comments, I think the, the, the collaboration and communication with customers is essential here, and, and that's what we've been focused on, being clear with them on our expectations and, and then being cautious on, on putting that new capital in place, until we're, we're confident that the, the volume will materialize. Having a backstop of a commercial discussion with them once we put the capacity in place, if the volumes don't materialize. You know, we have seen a bit of an impact on revenue this year from the, the ramp up of the battery electric truck platform. It wasn't meaningful in the backlog, but the volumes are a little bit lower, as GM suggested on their earnings call. A little bit lower in the first half than we originally expected, a little bit lower in their projections for the second half as well. There's been, you know, a modest impact, but not significant at this point. I think as we start planning for 2024 and 2025, we'll be spending a lot of time with customers, making sure that we're aligned on the capacity we put in place so that it mirrors what, what they intend to produce. Thank you. That's helpful commentary. As, as a follow-up, you know, you provided some encouraging commentary on the E-Systems backlog and winning a lot of awards. You know, sometimes what we see with some suppliers is that an inflecting backlog can maybe limit the ability to achieve commercial recoveries. Right now, obviously, you have a, you know, a significant path of commercial recoveries ahead on E-Systems. You know, what steps are you taking to make sure that, as you do your backlog push, you can also get your commercial recoveries fully intact? Well, you know, I tell you, I'm, I'm encouraged by the way the customers are working with us, and we, and we've typically separated backlog growth. We're not, in any respect, buying business for the ability to offset a commercial claim today. We need to get recovery, and I'm absolutely confident that working with our customers, we will get a fair settlement. So we tend to separate those issues relative to growth. I think the last three years is kind of indicative and represents the relationships, the good relationships we have with our customers. We've been challenged now with, you know, chip situations and inflationary costs and labor costs increases, transportation costs, et cetera. Next year, even the business we've been rolling on in Seating, has been accretive to our margins, and I think representative of our ability to negotiate in a fair way, get a reasonable settlement that's fair for Lear Corporation, and still be able to win new business. Next year will be the largest growth, revenue growth in a single year at Lear Corporation, we've been able to manage those commercial negotiations and continue to win healthy business that we get at an expected return for Lear Corporation. It doesn't go without challenges, but I do think the customers are much more open and willing to negotiate these things than they have in the past. I think initially it was probably more transitory in some respects, but now we're really working on fixed contracts and settling issues that are more sticky or longer term, and bucketing those separately. We'll continue to work with our customers. We have great relationships with our customers. We solve problems for them, and if you do that and continue to deliver at the best possible quality and expectations, they're going to work with you. Great. Thank you. Yep, thank you. The next question will come from Colin Langan with Wells Fargo. Please go ahead. Oh, great. Thanks for taking my questions. Just to follow up on the, on the $350 million, at the. I think you said it's in the midpoint of your sales guidance. How should we think about if, if there is no strike and an optimistic scenario? I mean, what is sort of the decrementals on those sales that are embedded in guidance as well? Is that sort of the normal high teens decremental on those lost sales, or is it maybe a bit worse, because of maybe delayed recoveries or anything, and is that embedded in the guidance? Yeah, I think, it depends on which customer is impacted and the level of vertical integration and underlying profitability on those platforms. We did see, you know, a little bit higher decremental margins during the GM strike in 2019, because that business, in Seating in particular, was the most vertically integrated of all the customers that we have. You know, it's a little less so with Ford and Stellantis. It depends on the customer that's impacted. And just to give you kind of some, so a frame of reference, each week of downtime, if all three customers were to go down, it's about $140 million of revenue, and we'd expect that to convert, you know, around 25%, give or take. It could be a little bit higher or a little bit lower, depending on the mix of, you know, of, of programs and customers that, that are impacted. What is embedded in the guidance now around the 2025 on the lost sales then? Yeah, so if you do the math on the high end of the midpoint, we have embedded a little bit less than 20% on the downside conversion. We've got both Carl and Frank's teams have the playbook outlined on what we will do if a strike takes place. There are things that we can control on discretionary spending, certainly some customer negotiations or discussions. But we believe between the actions that we'll take and the impact of the lost variable margin on the lower volume would net, you know, into that sort of 20% range. That, that's the target that we're looking towards. Got it. And if I look at the, the first half to second half walk, particularly in Seating, it, it implies a pretty large underperformance. I mean, so I think the market, if you're thinking 4%, is maybe down to first half, second half-ish, and your Seating would be down around 8%. Why, why would you expect such a big underperformance? Because you've been growing above market in the second, into the second half. Yeah. Maybe if I can just give you some of the assumptions, you know, by region, it'll help explain it. You know, we have assumed that there would be about a 20% reduction in the T1 platform from the first half to second half. You know, there was downtime associated with the normal kind of summer shutdown in those facilities. You have the strike impact assumed in those facilities. Then we've assumed slightly lower volumes on a weekly basis in the tail end of the year compared to what they ran in the first part of the year. That's probably the, the, the biggest driver. In Europe, we do assume that there's a bit of a slowdown in the, the strong growth we've, we've seen from JLR on the Range Rover and the Defender programs. Both are down north of 20%, again, partially driven by just normal seasonality. You have, you know, production downtime in August, as those customers take their, their summer holiday. It's, it's partially a result of that. A little bit of conservatism, ultimately, embedded in the forecast. You know, we, we debated this for some time over the last couple of weeks. You know, we updated our guidance in conjunction with our Seating Product Day on June 27th, and we really made that call in mid-June. I, I think conditions really have improved over the last 45 days. If we were to have, you know, set our guidance assumption in conjunction with the earnings call as opposed to the Seating Product Day, it probably would have been a little bit higher. That's why we spent so much time sort of articulating the assumptions in the guidance and what the high end would look like, just to give investors and the analysts that are modeling this, a sense of, you know, what could be possible in the second half of the year. It may look very different than what we've guided to at the midpoint. Got it. All right. Thanks for taking my questions. Yep. The final question will come from Itay Michaeli with Citi. Please go ahead. Great. Thanks. Good morning, everyone. Morning. Morning. Just two questions. One, I was hoping you could maybe just help us a little bit with the cadence of E-Systems margin in, in, in Q3 and Q4, just given the, the ramp of efficiencies. Secondly, just hoping you could go back just to the, the comments on, on the assumptions for T1 production second half of the year. Maybe just clarify of that assumption, how much of that ties to what you're assuming for a potential strike? Yeah. Maybe start with the second part of that question first. We've assumed effectively 2.5 weeks of strike for all GM, Stellantis and Ford business. That's what comprises the $350 million. That's, that's the portion of the volume reduction on that platform that you would attribute to the strike. In terms of the E-Systems margin ramp, you know, it's there's a negative in the third quarter on the seasonality of lower volumes, and then that's partially offset by the traction we have on both the water efficiency improvements in Mexico, as well as our expected commercial negotiation. You know, We're not going to provide third quarter guidance at this point in time. There's a fairly wide range of, of outcomes there. You know, I'd say kind of anywhere from flat to as high as 5%, depending on both those negotiations and the continued performance, you know, in our Mexico facilities. Then the fourth quarter would be a, a step up from that to get to sort of that 5.4%-5.8% range that we outlined for the second half overall. That's very helpful. Thank you. That's it. Okay, well, that's it. I just assume that the Lear team's on the phone, and I just again, want to thank everyone for their incredible hard work. It was a very good quarter. Everyone came together, as always, great effort by the great employees of Lear Corporation, and look forward to really the second half and what we're going to accomplish. Thank you for a great, great quarter, and thanks for your work going forward. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.