Good morning, everyone, and welcome to the Lear Corporation Second Quarter 2024 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Dan Brumbaugh, Vice President, Investor Relations. Sir, please go ahead. Thanks, Jamie. Good morning, everyone, and thank you for joining us for Lear's second quarter 2024 earnings call. Presenting today are Ray Scott, Lear's 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 metrics. 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 and full-year financial guidance. 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, Tim. Nice job. Now, please turn to slide 5, which highlights key financial metrics for the second quarter of 2024. Lear continued its positive momentum, delivering modestly higher revenue in the second quarter compared to last year, exceeding $6 billion. Core operating earnings were flat at $302 million. Adjusted earnings per share was $3.60, an increase of 8%, driven by higher adjusted net income and the benefit of our share repurchase program. Operating cash flow was $291 million in the second quarter, and free cash flow was $170 million, an increase of 8% compared to last year. Slide six summarizes key business and financial highlights from the quarter. We generated a quarterly record revenue of over $6 billion in the second quarter. Growth over market for the total company was three percentage points, with sales in both segments outgrowing the industry. E-Systems growth over market was seven percentage points, and Seating growth over market was two percentage points. During the quarter, we repurchased $60 million of shares and paid $44 million in dividends. We continued to repurchase additional shares throughout our quiet period and have repurchased over $110 million of shares year-to-date. Adjusted earnings per share grew by 8% in the second quarter, driven in part by the benefits of our share repurchase program. In E-Systems, we delivered our 8th consecutive quarter of higher year-over-year margins by executing our focused product portfolio strategy and improving operational efficiencies. In Seating, we continue to see strong demand for our innovative solutions in thermal comfort. Given the rapid commercial adoption of our new products, today, we are introducing our ComfortFlex by Lear modular designs, as well as our ComfortMax Seat by Lear. ComfortFlex and our ComfortMax Seat will showcase the various thermal comfort solutions that only Lear can bring to automotive seating. We continue to diversify our customer base in both Seating and E-Systems. In Seating, we are awarded the complete seat for a new variant of the Geely Zeekr X, highlighting our continued growth with Chinese domestic brands. In E-Systems, we are awarded the low-voltage wiring for the Volvo EX30 in Europe. The Smart Junction Box award for Volkswagen and Audi will support the initial volume for their Scalable Systems Platform of BEV vehicles. Additional volume will be awarded in the near future. Last week, we closed on the acquisition of WIP Industrial Automation, which we announced during our first quarter earnings call. WIP leverages robotics, artificial intelligence, and vision systems to design turnkey solutions for complex industrial challenges that will help accelerate our automation initiatives globally. Turning to the slide 7, I will provide more detail on the progress of our thermal comfort strategy. We remain on pace to meet or exceed our total revenue target of $1 billion from thermal comfort by 2027. The combined capabilities of Lear and the companies we have acquired are leading to an acceleration of new business opportunities and awards, and we are winning 80% of the programs we are quoting. We continue to innovate our thermal comfort product offering. ComfortFlex by Lear is a brand architecture of modular designs, which combine two or more thermal comfort functions. These designs reduce the number of parts, resulting in less weight and complexity, while improving performance and comfort at a lower cost. For instance, our solution for Volvo, launching later this year, combines heat, ventilation, and massage functions. Our solution for Lucid includes ventilation and massage, similar to our product for Volvo, and adds lumbar functionality. Our third upcoming ComfortFlex design is for a European OEM, includes four capabilities: heat, ventilation, lumbar, and massage. Lear's expertise in complete seat applications allows us to design and deliver a combination of thermal comfort functions for our customers. Our vertical integration and complete seat leadership enables us to integrate our ComfortFlex modules into the trim covers to develop our ComfortMax Seat by Lear. Our first iteration of the ComfortMax Seat technology is currently in validation with Ford Motor Company. The ComfortMax Seat for Ford includes thermal comfort content that was previously supplied by a competitor and will now be manufactured by Lear. This is one of the first examples of our innovative solutions driving conquest opportunities. Initial test results are confirming our estimates that these integrated solutions improve the performance of our thermal comfort components. As expected, the ventilation airflow and massage intensity in the ComfortMax Seat is outperforming the traditional design currently in production. Full validation is expected by the end of this year, which will enable our ComfortMax Seat to go into production for the first program starting in 2026. Once validated, our ComfortMax Seat can be used in additional Ford programs, whether or not Lear is the complete seat provider. Ford is just the first customer to begin this validation. We're in the late-stage discussions with three other key customers for our ComfortMax Seat. Our ComfortMax Seat provides several opportunities for long-term growth. The improved performance and reduced complexity delivers a better value proposition for our customers at a very critical time when they are seeking innovative solutions that reduce cost. This provides Lear with a competitive advantage when quoting just-in-time seat programs, and these Lear modules can be sourced to other complete seat suppliers, driving growth in our component business. Slide eight highlights Lear's strong position with the Chinese domestic manufacturers. Lear has 30 years of automotive experience in China. Over that time, Lear has strengthened its local presence, built strong relationships with key customers, and has become a clear leader in luxury seating. We have been growing with key established customers, such as BYD and Geely, and have supported the launch for other targeted new market entrants, like Xiaomi and their successful SU7 program. Two-thirds of our three-year backlog in China was driven by new business wins with Chinese domestic automakers, some of which is captured in our growing non-consolidated backlog, which increased by 70% to $650 million. This positions Lear to continue growing in Asia as the Chinese domestic OEMs continue to outpace the overall market growth in China. The financial return profile of our business with Chinese domestic customers is in line with our segment averages for seating and E-Systems. As with most programs in our portfolio, the profitability is generally dependent on the level of vertical integration. Chinese domestic OEMs tend to control less of the seat component sourcing, providing Lear with more opportunities to vertically integrate. The Xiaomi SU7 is a good example of that. We have foam and thermal comfort components in addition to the just-in-time assembly. We continue to pursue opportunities with the Chinese domestic automakers, both in China and as they expand globally. In seating, we continue to win business with BYD and expect to produce about 30% of BYD's seats within the next few years. Our vertical integration, combined with our local engineering capabilities, provide a significant opportunity for growth in China as customers look to rapidly implement innovative solutions. For E-Systems, our market share in wiring and connection systems in China is similar to our global share, despite the elevated competition from local suppliers. We are currently pursuing new opportunities in wire with the Chinese domestic OEMs. 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 decreased 1% compared to the same period last year on both an aggregate and Lear sales weighted basis. Production volumes increased by 2% in North America and by 5% in China, while volumes in Europe were down 6%. From a currency standpoint, the U.S. dollar strengthened against both the euro and RMB. Slide 11 highlights Lear's growth over market. For the second quarter, total company growth over market was three percentage points, with seating growing two points above market and E-Systems growing seven points above market.... Growth over market was particularly strong in Europe at seven percentage points, with both business segments benefiting from higher volumes out in the Land Rover, Range Rover and Range Rover Sport. New conquest programs, such as the BMW 5 Series and i5 in Seating, as well as new business with BMW and Renault in E-Systems, contributed to the strong growth in the region. Lower volumes in several Stellantis, Audi, and Porsche programs negatively impacted Seating platform mix in Europe. In North America, sales outperformed industry production by one percentage point, reflecting favorable backlog, partially offset by unfavorable platform mix in both segments. The growth in E-Systems was driven by new business on General Motors' Ultium platform, including the Honda Prologue and Acura ZDX. Seating benefited from new conquest business on the Jeep Wagoneer and Grand Wagoneer. Lower volumes on Lear platforms, such as the Mustang Mach-E in E-Systems, and the build-out of the Chrysler 300, Dodge Charger and Challenger, and Seating, impacted growth in North America. In China, revenue growth lagged the market by five percentage points, driven by lower volumes on Lear platforms, such as the BMW X3 and iX3 in seating and the Volvo XC40 in E-Systems. New business on the Xiaomi SU7 and the BMW 5 Series and i5 conquest programs in seating, partially offset the unfavorable platform mix in China. The mix shift to domestic Chinese automakers accelerated in the past year. We've been growing with key customers such as BYD, Geely, and others, which will further improve our customer mix in China going forward. When you include revenue from our non-consolidated joint ventures, our China growth over market improves by five points to flat for the quarter. Turning to Slide 12, I will highlight our financial results for the second quarter of 2024. Sales reached a quarterly record at over $6 billion, a slight increase versus last year. Excluding the impact of foreign exchange, commodities, and acquisitions, sales were up 2%, reflecting the addition of new business in both of our business segments. Core operating earnings were $302 million, flat compared to last year, as positive net performance and the addition of new business were offset by lower volume on Lear platforms. Adjusted earnings per share improved to $3.60 as compared to $3.33 a year ago, reflecting higher net income and the benefit of our share repurchase program. Second quarter operating cash flow was $291 million, compared to $311 million last year. Free cash flow, which is not shown on the slide, was $170 million, compared to $159 million in 2023, reflecting lower capital spending, partially offset by higher cash restructuring costs. Slide 13 explains the variance in sales and adjusted operating margins in the seating segment. Sales for the second quarter were $4.4 billion, flat compared to 2023. Excluding the impact of foreign exchange and commodities, sales were also flat as the addition of new business was offset by lower volumes on Lear platforms. Adjusted earnings were $302 million, down $20 million or 6% from 2023, with adjusted operating margins of 6.8%. Operating margins were lower compared to last year due to a decrease in production on key Lear platforms and the impact from foreign exchange, partially offset by positive net performance in the roll-on of our margin accretive backlog. Slide 14 explains the variance in sales and adjusted operating margins in the E-Systems segment. Sales for the second quarter were $1.6 billion, an increase of $34 million or 2% from 2023. Excluding the impact of foreign exchange and commodity, sales were up 5%, driven primarily by our strong backlog, partially offset by lower volumes on Lear platforms. Adjusted earnings improved significantly to $82 million or 5.3% of sales, compared to $63 million and 4.1% of sales in 2023. The improvement in margins reflected strong net operating performance and our margin accretive backlog, partially offset by lower volumes on Lear platforms. Now, shifting to our 2024 outlook. Slide 15 provides global vehicle production volume and currency assumptions that form the basis of our full-year outlook. We've updated our global production assumptions, which are based on several sources, including internal estimates, customer production schedules, and S&P forecasts. Our production assumptions are modestly lower than the latest S&P forecast across our key regions, reflecting our most recent customer production schedules and our expectations regarding near-term market conditions. At the midpoint of our guidance range, we assume that global industry production will be down 3% compared to 2023, which compares to our prior guidance assumption of flat production volumes. We've also adjusted our currency estimates, which now assumes an average euro exchange rate of $1.85 per euro and an average Chinese RMB exchange rate of 7.2 RMB to the dollar. Slide 16 provides detail on our outlook for 2024. Key changes include the following: Our revenue is now expected to be in the range of $23.2 billion-$23.7 billion. Core operating earnings are expected to be in the range of $1.1 billion-$1.2 billion. We have substantially completed our commercial negotiations around price increases for inflation, volume reductions, volume fluctuations, and other matters with nearly all customers. However, our full-year core operating earnings range is wider than usual to reflect uncertainty around the timing of negotiations with the remaining customers. As we discussed in our last earnings call, we are focused on negotiating agreements that ensure sustainable financial returns. We are increasing our outlook for restructuring costs by $25 million to $150 million to fund actions that will improve our manufacturing capacity, utilization, and reduce costs. At the same time, we are reducing our outlook for capital spending by $25 million, primarily as a result of slower customer ramp-up on various new vehicles and to continue aggressively managing capacity utilization. Operating cash flow is expected to be in the range of $1.1 billion-$1.3 billion. Slide 17 compares our current outlook to our prior outlook for sales and core operating earnings. We are forecasting the midpoint of our 2024 sales outlook to be approximately $23.5 billion, down $850 million from our April outlook, reflecting the impact of reductions in vehicle production volumes and changes to our foreign exchange assumptions. The midpoint of our core operating earnings outlook is approximately $1.1 billion, down $115 million from our prior outlook. The reduction in our core operating earnings outlook reflects the impact of lower volumes and the change in FX rates, partially offset by improvements in net performance, including lower costs resulting from additional restructuring. These restructuring actions will continue to help align our capacity with current industry volumes and provide further cost savings in 2025 and beyond. Slide 18 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 $8.5 billion, down $450 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 projected customer downtime. The midpoint of our second half operating income outlook is $533 million, or 6.3%. The reduction in operating income reflects the expected impact from lower volumes on our Seating platforms, partially offset by lower engineering and launch costs and the benefit of commercial negotiations, as well as savings associated with restructuring actions that optimize capacity, improve efficiencies, and lower labor costs. We expect to reduce headcount in Seating by approximately 8% this year as compared to the end of 2023. More than half of these reductions are already complete and will drive savings throughout the remainder of the year. Slide 19 compares our second half outlook to our first half actual results for sales and core operating earnings in the E-Systems segment. We are forecasting the midpoint of our second half sales outlook to be approximately $3 billion, down $114 million from our first half actual results, reflecting lower production volumes. The midpoint of our second half operating income outlook is approximately $166 million or 5.6%, an increase of $7 million from our first half actual results. We continue to improve margins in E-Systems despite headwinds from production volumes. We expect to offset the impact of reduced volumes through a combination of lower engineering and launch costs, commercial recoveries, and restructuring actions to optimize capacity, improve efficiencies, and lower labor costs. We plan to reduce headcount in E-Systems by approximately 6% this year as compared to the end of 2023. More than half of these reductions are already complete and will drive savings throughout the remainder of the year. In addition, improvements in plant productivity and efficiencies in our North America wiring business will continue through the second half of the year. Moving to slide 20, we highlight our commitment to continue to return capital to shareholders. We repurchased $60 million worth of stock in the second quarter and continue to repurchase additional shares throughout our quiet period. Year to date, we have repurchased over $110 million worth of shares. Free cash flow conversion is expected to exceed 80% in 2024, which will enable us to repurchase $325 million worth of shares this year, more than what we repurchased last year. The share count reduction will help accelerate EPS growth in 2024. Since initiating the share repurchase program in 2011, we have repurchased $5.3 billion worth of shares and returned approximately 85% of free cash flow to shareholders through repurchases and dividends. Our current share repurchase authorization has approximately $1.4 billion remaining, which allows us to repurchase shares through December 31st, 2026. Now I'll turn it back to Ray for some closing thoughts. Thanks, Jason. Please turn to slide 22. Lear continues to focus on what we can control and execute on our strategic initiatives. In seating, we are accelerating the deployment of our thermal comfort systems products. Our Comfort Flex by Lear modular designs are expected to launch over the next several quarters. Full validation of our Comfort Max Seat by Lear technology is on track to be completed with Ford by the end of this year. Our thermal comfort business gives Lear a competitive advantage and further strengthens our industry-leading position in seating. In E-Systems, our execution and focus on efficiencies continues to drive margin improvement. We continue to win new business across all powertrains, resulting in strong growth. The acquisition of WIP Industrial Automation was recently completed. WIP strengthens our automation and artificial intelligence capabilities, which will extend our leadership as an advanced manufacturing integrator. The initiatives we are executing will drive sustainable profit, profit improvements and will allow us to continue to return capital to shareholders. ...We have repurchased over $110 million worth of shares year to date, and have set a target of $325 million for the year, which will help accelerate earnings per share growth. Now we'd be happy to take your questions. Ladies and gentlemen, at this time, we'll begin the question and answer session. To ask a question, you may press star and then one on your touchtone telephones. If you are using a speakerphone, we do ask that you please pick up your handset prior to pressing the keys. To withdraw your questions, you may press star and two. Once again, that is star and then one to join the question queue. We'll pause momentarily to assemble the roster. Our first question today comes from John Murphy from Bank of America. Please go ahead with your question. Good morning, good morning, guys. Good morning. Just, first question on the Chinese automakers and the market. You know, you said something about being 30% of BYD's seats in a few years. I'm just curious, you know, who the other 70%, you know, is, as far as the, you know, the seats that are sourced by BYD, what the competitive landscape is there, and if you see anything different, I know it might be hard to tell, between the vehicles that are sold within the China market versus the vehicles that are exported. Because obviously, exports are going to probably continue to grow pretty rapidly over time, and if there's a difference in the opportunity set for you in market versus exports. Yeah, starting with, kind of the breakdown of BYD's seating suppliers. They do have an in-house seat-making company. I believe it's called FinDreams. In addition to that, they have a joint venture with FORVIA. So I think, our book of business with BYD and those two, the three taken together, are the vast majority of BYD's seat suppliers, if you look out over the next three or four years. In terms of the content differences, we're not seeing significant differences at this point in time. You know, what you're seeing with BYD is a couple things: manufacturing in China and then for the domestic market and export, but also them setting up manufacturing outside of China. So they have capacity in Thailand. In fact, they're in Hungary this week, meeting with our team there. They're establishing capacity in Eastern Europe. They're talking about Brazil as well. And I think the way they're initially entering these markets, mostly through, you know, knockdown kits, CKD business. And so to the extent we're supplying that in China, we'll likely win that business, as it moves to the other markets. And then from there, they will ramp up production and manufacturing in those regions. And because of our presence in those markets, we feel confident we're going to win our share of that business. I don't think we'll be the only supplier in those markets, but we will certainly maintain our share with them. I think just, John, we were there not that long ago, Frank and I, and looking at some of the vehicles, it's impressive on the luxury side, what they're doing with content and features. And I don't see that, you know, diminishing, regardless if it's in China or export. It's really, they're separating themselves with some of the quality features. And I think that's where we've done a nice job of really getting at growth with BYD, is the capabilities we have with thermal comfort. I can't emphasize the importance of having innovation and technology, and they're very, very focused on ways that you can drive modular solutions, improve features, you know, package the features within the seat. And so, you know, having that capability, I think, has uniquely positioned us to be as successful as we have been with BYD. And I think even, you know, outside of China, they're looking for that to continue. They really have to differentiate their product. Having, you know, that type of capability outside of China and in China is very complementary. And so, you know, it, it's been a great customer. We, we've loved the growth. We don't see that really changing in China or outside of China. That, that's very helpful. Then just one second question. You know, I mean, you're explaining that the lower guide largely is based on market conditions of lower volume, maybe to some extent, you know, mix. But there's definitely some programs that are being pushed down and to the right, particularly on EVs. I'm just curious how much disruption that's creating in your business, how much that may be adding into sort of the incremental pressure here in the short run, and how you think about that in 2025 and beyond. Because you're being pretty polite, not calling that out too much, but I would imagine that's a bit of an issue. Yeah. We're certainly seeing the disproportionate share of this adjustment to our revenue guidance being driven by lower volumes on electric vehicle platforms. And I think it's roughly 65% of the revenue reduction is driven by lower volumes on those platforms. And those are a combination of programs that were ramping up this year, that are now ramping up more slowly, and those that are getting pushed out, you know, even out of this year. And then also programs that are in production that are now running at a lower rate than they were last year. And so some of the certain OEM EV programs that launched last year and the year before, we're seeing lower volumes on this year. In terms of how it impacts our business, it really depends on the customer and the program. You have certain customers where they're producing EVs and ICE vehicles in the same footprint, and we are as well. In those cases, we're able to adjust more much more quickly. In our component plants, the same thing. We are generally producing components for ICE and EV vehicles, and we're able to move headcount or not hire as quickly to adjust to the lower volumes. The exception to all that, you know, are some of our dedicated capacity we've put in for some new EV plants, and that's where you're seeing perhaps maybe a little bit more detrimental margin impact, you know, on those platforms, specifically. Okay, very helpful. Thank you, guys. Thanks, John. Thanks, John. Our next question comes from Joe Spak from UBS. Please go ahead with your question. Thank you. I guess just to start for the 2024 guidance, I know you've taken a more conservative view here than prior. I think you're even more conservative than current S&P, but you know we're seeing OEMs announce production cuts by the day really. So how should we interpret what's in your guide here? Like are some of these announcements that we are seeing and will likely to see over the coming months you think already embedded in your plans? Or you know or you know should we expect potentially more risk if we see continued production cuts? Yeah, Joe, we've spent a lot of time on this over the last several weeks, as you might imagine, and, you know, our adjustment to the second half outlook was greater than what we had anticipated and communicated at a public investor event in mid-June. And that really reflects the kind of the ramp-up in announcements and also our extrapolation of what that may mean into the fourth quarter, as well, particularly on electric vehicle platforms, where we're just seeing, you know, a slower ramp-up and slower demand in the U.S. and Europe in particular. And so we've tried to capture not just what's been announced, but what we anticipate to be announced, as the year progresses. And at the midpoint, you know, we've tried to capture a balance of that risk, as well as, you know, some upside on platforms that are doing particularly well. For example, in China, on a number of our Chinese domestic OEM platforms, like the Xiaomi SU7, Leapmotor, we've increased our volume assumption, reflecting the strong sales performance that they've seen in the market. So it just depends on the customer, the car line, and the market, but we've tried to be very balanced, and I wouldn't characterize the midpoint as unduly conservative or unduly aggressive at this stage. That's very helpful. And then maybe just to follow on a little bit from John's question. So, you know, we've obviously seen the slowdown in EVs, where, you know, new programs proceeding were a large part of your backlog. I think overall, that was also expected to drive E-Systems. You know, we're seeing just other production cuts in the industry from some higher inventories. So when we put it all together, like, and just thinking out here, like, how do you actually view the growth algorithm for Lear over the next, you know, one to three years? Because it would seem, at the very least, and I know you've already sort of done this once, like, there needs to be a revision to some of the... A further revision to some of the backlog commentary you had, you had prior. So I'm just curious if you could help us a little bit on how you're thinking about the next, you know, couple of years here. Yeah. You know, if you look at E-Systems, what we talked about previously is that about half of our six points of growth over market was driven by the added content on electric vehicles and our participation in that market transition. And so clearly, that piece of the six points has slowed down. Despite that, you know, we have grown six points over market, including this year, on a five-year, you know, running basis in E-Systems. And we expect this year to be six points of growth over market, despite the pullback in this transition to electric vehicles. So growth is holding up clearly in E-Systems because we're winning business on the low voltage side, on ICE vehicles and taking share there as well, and I think that's a factor. In seating, you know, I think there's a little bit more near-term uncertainty because of the weighting of EV platforms that are in the backlog and ramping up a bit more slowly. And so our growth over market this year in seating is more like two points, roughly for the full year, and three percentage points in the second half of the year. And so the question that is unanswered, and we're seeing some evidence of an answer forthcoming, is how many extensions will we see in ICE programs as the slowdown in EV ramp up continues? And we are starting to hear more discussions or participate in more discussions with customers. We're not prepared to front-run their commentary in this regard, but we are seeing more evidence that there will be ICE extensions that will help sort of backfill that lower revenue growth attributed to the new EV vehicles. So ultimately, I think the bigger question on sales growth is going to be, you know, what happens with, you know, industry demand overall. And that will be the key factor determining, you know, the pace of growth in both segments with, you know, in the near term. Longer term, you know, we continue to take share in both segments, and we see, you know, a strong backlog in both segments and believe that we can grow both segments consistent with our target rates, you know, four points in Seating and six points in E-Systems, you know, over the next five years. And so we're more confident as we sit here today than even in the past in Seating, really, because of the thermal comfort traction that we have with customers and how that's contributing to our competitive advantage in Seating, and the strength in our E-Systems business and the cost structure in that business, allowing us to take share there. So I think the growth story, longer term, is intact. I acknowledge that the near term, it's a little bit bumpy. Maybe one quick follow-up, and I don't know if there's an easy answer to this, but like in the original backlog, where, let's say, taking your example, where you were seeing a lot of new programs for EV, what was your sort of high-level assumption for price declines at that time? Yeah, it depends on the customer and the region. There isn't a straightforward answer that I could provide you, Joe, in the constraints of time on this call today. I'd probably need a half-hour discussion on that. Okay. All right. We'll, we'll take it offline. Thanks. Yep. Thank you. Our next question comes from Dan Levy, from Barclays. Please go ahead with your question. Hi, good morning. Thanks for taking the question. Good morning, Dan. Hey, wanted to start with a question on seating and just the margin trajectory. So recognize the volume mix pressures. But really, the question is, you know, you're gonna if you're guiding 6.3 for the back half of the year, is that really a starting point for 2025? And maybe just more broadly, you know, look, at your seating day a year ago, you were talking about, you know, a path to 8, 8.5% over time. And I recognize very different industry today. Mix is softer, the backlog has been impacted. There's some effects in inflation. But really, the question is: What's the path to getting seating margins back on track? Is there any benefits from, you know, TCS or vertical integration? Maybe you could just talk about the broader trajectory of seating margins, and if there's anything beyond just the program launches and customer mix? Yeah, Dan, I'll start with the first part of that question. I think if I'm modeling 2025, I would use the full year guidance for seating at the midpoint of 6.5%, as opposed to the second half margin guidance at the launching point into next year. Because you're really seeing a concentration of this volume reduction in the third quarter. You have extensive downtime in North America and Europe, much more so than we saw last year. And we've built in, you know, slower production into the fourth quarter across a number of our power lines. So I think that, you know, 6.5% is a better starting point. If you look at what we've done, you know, this year, we've generated positive net performance of about 20 basis points in the first half of seating. We expect to do that again in the second half. We're seeing 10-15 basis points of margin growth from our backlog. And so as you fast forward into 2025, I would expect both of those to continue. And I would argue that we're poised for that net performance to accelerate beyond the 20 basis points that we were able to achieve this year, because I would characterize this year as sort of peak wage inflation impact, and also a pretty significant peso headwind that will diminish considerably, certainly if the rates hold up where they are right now. And what we've done in terms of these investments in WIP and other advanced manufacturing automation systems and integration companies will allow us to really accelerate the labor cost reduction and manufacturing cost reduction over the next several years. I would characterize what we're doing with automation as being sort of in the second inning of the game here. You're seeing the initial benefits. We talked about reducing headcount by 8%. You know, seating revenue is only down, you know, less than 1% for the year, so pretty impressive performance, and the vast majority of that's already been completed. As you look out to next year, we see more opportunities to do that. Then as you sort of get past the next two years of, you know, say, 50 basis points of backlog and net performance improvement a year, you know, I think, you start to see the full benefit of the TCS margin enhancement over a longer period of time, driving both revenue growth, but also improving margins, you know, in that third, fourth, and fifth year of the five-year plan we're building right now. So those would be the kind of the building blocks I would think about. Got it. Thank you. As a second question, wanted to ask about the E-Systems margins. And really, you know, so see the offsets that you're talking to, recognize there's some seasonality. But wondering, what is the line of sight that you have on, you know, the efficiencies, the negotiations, you know, that you have in place there, recognizing that, you know, the EV impact on E-Systems is probably higher than what's going on in seating? Yeah, I mean, if we look at sort of the first half to the second half, what we're guiding to is more than offsetting the impact of lower production volumes. So the volume impact, first half to second half, and the revenue reduction is actually a smaller impact in these systems than seating, based on just platform mix. But we are offsetting that through a combination of commercial negotiations. It's the vast majority of which, you know, we either have a line of sight on or are completed. There are some that are still ongoing that we have to work through, but our confidence level is high. We have lower engineering launch costs, and in these systems, that's more of a reduction in launch costs than it is engineering. We have a clear line of sight to that, just given the cadence of our launches this year. We have significant improvements in our North America wire business that we've guided to a 30 basis point improvement sequentially on. We're seeing those happen, you know, into the third quarter. The first quarter was, you know, the low point. We saw improvements throughout the second quarter. Still not happy with the performance there, but it improved nonetheless. Those improvements and efficiencies continued into the third quarter, and so you're gonna really see a nice benefit, both in the second half versus the first half, but also next year versus this year, since we had such a slow start to the year there, specifically in that part of the business. And then the last driver is really restructuring, savings and automation. And so we continue to have opportunities to shift headcount from Eastern Europe to North Africa, from the border of Mexico to the interior of Mexico, and then from all parts of Mexico into Honduras. So that's the last sort of contributor to it. So we have a clear line of sight on what we need to do to meet that midpoint guidance and hope to do better than that in the second half of the year. Great. Thank you. You're welcome. Once again, if you would like to ask a question, please press star and then one. To withdraw your question, you may press star and two. Our next question comes from James Picariello from BNP Paribas. Please go ahead with your question. Hi, good morning, everyone. My first question, and I imagine the situation is highly fluid, but can you share your thoughts on the very recent UAW strike affecting one of your seating plants? I did come across an article this morning that pointed to the possibility of a tentative deal already getting reached. And just, you know, on that point is, does your guidance embed anything one time in nature in terms of, you know, labor, you know, labor contribution? Just, yeah, whatever you could share on this. Thanks. Well, yeah, we did reach a tentative agreement, hoping to get it ratified sometime in the near future here. Work closely with the UAW and, you know, as far as any other information on that, we're gonna just continue to work with the team on the ground. But we have-- they're back to building vehicles this morning, so we couldn't be more happy for GM and our employees down in Wentzville. And the costs associated with the contract are reflected in our guidance. Got it. Okay. That's helpful. And then, great to hear. What's assumed for your Mexican peso exposure? I believe previously you were assuming a $60 million headwind. Yeah, it's still roughly the same. You know, we had 85% of that hedged and, you know, if it holds up at 18.50 or whatever it was, you know, the spot trading this morning, there's a modest opportunity in the last several months of the year. But it's just on that 15% that's unhedged. So our annual exposure is $1.2 billion, so about $100 million a month. So you can figure out from there the potential effects based on your call on the peso. But I would suggest it's a modest opportunity for us at this stage. Thanks. Thank you. Thanks. Our next question comes from Itay Michaeli from Citi. Please go ahead with your question. Great. Thank you. Good morning, everyone. Good morning. Two questions. First, just on, on Slide 17, and thank you for all the detail. On the $285 million dollar backlog, can you dimension how much of that is just your EV volume as opposed to deferrals into 2025? And then on some of the potential ICE extensions that you alluded to earlier, any way to roughly kind of quantify, you know, if those were to come through, what that might mean for the 2025 backlog opportunity? Yeah, just starting with the EV impact. So of the $285 million, roughly $250 million of that is on EV platforms. And you know, we're in discussions with our customers. Obviously, our customers are deep in their planning process. We would expect to see some of that shift into next year. But again, I you know, I think the reoccurring theme we're hearing from customers is it's gonna depend on the demand, so the ramp up will be dependent on that. But I would say that the 2025 backlog would benefit from the shifting of some of that volume from 2024 into 2025. Now, at the same time, there may be some risk to the 25 layer of backlog that's that we had guided to previously for the same reasons that that we have adjusted downward our our backlog this year. And we're just in the kind of middle of that planning process for next year, so we'll have more to say on that as the year progresses. In terms of the ICE offset to that, you know, that's also unfortunately not a number we can quantify at this stage. It's more of a theoretical opportunity, but we do anticipate that you know that will sort of be a one-for-one opportunity if the industry demand holds up overall and just simply shifts from EV to ICE. You know, that our customers will figure out a way to satisfy that demand by either continuing ICE programs that they had planned to build out, or increasing the volume on those that they plan to reduce. ... That's very helpful. Thank you. Just, just a quick second question. With the deterioration in the LVP environment just in the last, you know, few, few weeks and months alone, I'm curious if you're seeing any signs of distress across Tier 2s or any other issues across the supply chain? At this point, we're not seeing any significant change. I would say that over the last several years, there has been issues with supplier bankruptcies and distressed suppliers, but it hasn't been material to the results. You know, I think one of the benefits, particularly in seating, of being so vertically integrated, is that we have the ability to bring that business in-house. And that's, you know, oftentimes a helpful lever to be able to pull in that situation. But we're not seeing significant signs of distress or a change in that environment. That's very helpful. Thank you. Thanks, CJ. Our next question comes from Mark Delaney from Goldman Sachs. Please go ahead with your question. Yes, good morning, and thanks for taking the question. Hoping to better contextualize some of the efforts that Lear has done within automation, including the recent WIP transaction. And, you know, as you think about some of the steps the company has taken, including with that deal, what does that mean in terms of what Lear may be able to achieve in terms of the high single digit margin targets it has, both for Seating and E-Systems over the intermediate to longer term? And, you know, does this deal suggest that inflationary pressures would have prevented you from getting there without incremental actions? Or perhaps is there some opportunity for margins to be a bit higher in the longer term as you focus more on automation? Well, you know, first of all, we recently made the announcement. We've reset the organization up for even more focus on what we consider to be IDEA by Lear, which is the, you know, innovation, the digitalization, and engineering and automation of how we're driving our businesses. And I think it's important, and Jason mentioned earlier, we're seeing, you know, continued improvements and how we're outpacing the efficiencies in our plant relative to even the revenue downturn in Seating is a great example, and we have very similar examples in E-Systems. So we are able to really drive operational excellence at a plant level through technology innovation. And these acquisitions we've made through ASI, InTouch, Thagora, most recently with WIP and our own organic capabilities is really driving results in our plants. We have examples where we're able to automate even in our seating facilities, from finish all the way to delivery to the customer, 100% automation. So those type of steps, and I call them, they're implemented at a level that we're still validating and really accelerating those across all of our plants over time, and that's over the next several years, is really gonna drive, I think, even better results than we're seeing even today. So, you know, right now, it's about the continuation of expanding our capabilities in those areas, building a very we have a technical organization around those and really driving those results, connecting the dots between the different plants. I think the second part of that, which I think is very important, I mean, we have some short-term churn, bumps, whatever you want to call it, within the industry, but this modular concepts of how we're revolutionizing how you look at seating is very important, and it's connected to those acquisitions that we're acquiring. Very specific connection systems, wiring systems, modular components that differentiate us at a whole new level. I couldn't be more excited about this introduction of what we're doing with Ford, because it validates through all the different OEMs, requirements and statement of requirements, and it's connected to automation within the manufacturing plant. I think that's really just scratching the surface. It's the first step. You know, the continued pressure that we see with labor inflation, what we see with labor scarcity, what we're seeing with increased, you know, manufacturing output around the world and even other different industries, has really put us in an incredible position. We are, you know, really an automation integrator, designing our own manufacturing processes in our plants that are unique to our products, and that connection between engineering and automation is essential. And so we are very excited, very proud of the efforts that we've made this year, but I think we're only scratching the surface. It's gonna be a continuation. It's connecting, it's moving fast, it's driving results, you know, one quarter after another. But I think in E-Systems, how we've set the business up, simplified the portfolio, focused on the manufacturing excellence, really driving efficiencies within our plants, growing profitable business. You're seeing that business, really the results of the strategic direction we put in there. And it, the seating business, I think, you know, we're really in good discussions with our customers on this modular approach, and I think it changes the way you look at components within seats that allows for much more efficient designs within the manufacturing process. So I couldn't be more proud right now. Like I said, we've shifted the organization to really drive quicker results, and it's working. And our expectation is that over time, we will more than offset wage inflation through these actions. I think you see evidence of that in the positive net performance in both businesses this year, despite, you know, very high wage inflation and the impact of the peso. Thanks, very helpful. Another question I had was, thinking about your seat market share. As, as the company has been making investments in things like modularity, offerings like thermal comfort, you know, those weren't just good standalone businesses, but I think contributed to perhaps gaining some, some seat share. So maybe you could update us more globally, how you see your seat share, tracking relative to your longer-term expectations. Thank you. ... Yeah, we're still on track to achieve our longer-term 29% market share goal in seating. And you know, I think thermal comfort's a key enabler to that. And it's not just growing the JIT business, it's also growing the component businesses as well. And so we see that as an additional not just earnings catalyst, but revenue catalyst longer term. And it does benefit us when we're quoting JIT business with a modular approach. We are much more competitive, much more efficient, and it gives an enormous amount of flexibility to our customers. And we're already seeing the results, like I mentioned earlier, that the system itself is so much more efficient. I mean, we're cutting down 50% of what was a traditional design system. It's integrated, it's automated. The actual output itself from a customer's preference is changing dramatically, you know, the improvements from airflow and lumbar and massage and those type of features. And so on the Just-in-Time side of it, we have a competitive advantage. We can be much more efficient in our quoting process. And what's great about that system, we designed it with the intent to be agnostic to any frame system, so we can supply that to other JIT manufacturers. And that was intentional, that, you know, the value proposition within the modular system itself is still capable of being supplied to, you know, our competitors. Not that we want to supply it to them, but we can. And it was designed intentionally that we can build that around any structure. And so we're seeing that. I think that, like I said earlier, with BYD, some of the new entrants, we, you know, they're not as traditional on some of the supply chains and the ways they've been designing, much more open, these type of concepts. So it's been very beneficial in how we're growing globally with some very strategic customers. Thank you. Thank you. Okay, I think that's the last call. So, hey, just, I think the Lear employees are on the phone. I just want to, again, thank you for your incredibly, the incredible, great job you've been doing, the hard work. You know, we have a great strategy. We, you know, we talked about it with Nick's leadership now, and E-Systems, Carl's leadership, with IDEA by Lear and Frank continuing to drive seating. We're going to simplify the product portfolio in E-Systems. We're seeing great results right now. We're growing the business. It's very profitable, very diversified across customer, different customers around the world. So thank you for your efforts here in E-Systems seating. Continue to do a great job. We're going to continue to push these modular concepts. They're working. They're doing a great job of growing our business, our backlog. It's going to drive a value proposition, not just for Lear Corporation, but for our customers. We're doing a really nice job with these acquisitions in Industry 4.0 with IDEA, and we're going to connect those dots much quicker and get at those results. So I appreciate all the hard work and look forward to us continuing it through the second half. Thank you. Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We thank you for joining. You may now disconnect your lines.