Good morning, everyone, and welcome to the Lear Corporation Third Quarter twenty twenty-four 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 Tim Brumbaugh, Vice President, Investor Relations. Please go ahead. Thanks, Jamie. Good morning, everyone, and thank you for joining us for Lear's Q3 twenty twenty-four 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'll 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 two, our actual results could differ materially from those 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 three. First, Ray will review highlights from the quarter and provide a business update. Jason will then review our Q3 financial results and provide an update on our full year financial guidance. Finally, Ray will offer some concluding remarks. Following the formal presentation, we'd be happy to take your questions. Now, I'd like to invite Ray to begin. Thanks, Tim. Please turn to slide five, which highlights key financial metrics for the Q3 of two thousand and twenty-four. Lear delivered $5.6 billion of revenue in the Q3, despite a very challenging production environment. Core operating earnings were $257 million, or 4.6% of net sales. Adjusted earnings per share was $2.89, an increase of 1%, driven by the benefit of our share repurchase program. Operating cash flow was $183 million in the Q3, and free cash flow was $51 million. Slide six summarizes key business and financial highlights from the quarter. Total company revenue outperformed the market by three percentage points, with sales in both segments beating the industry. Five percentage points in E-Systems and three percentage points in Seating. Revenue outperformed industry production in each of our major regions. During the quarter, we repurchased $209 million of shares and paid $43 million in dividends. We continued to repurchase additional shares throughout our quiet period, achieving the full year $325 million target communicated in our Q2 earnings call. Adjusted earnings per share grew by 1% in the Q3, driven by the benefits of our share repurchase program, despite the decline in the industry production. In China, our strong relationship with the domestic automakers led to significant new business awards in the quarter. In seating, we won several new awards with BYD, Xiaomi, and Seres. The new programs combined are expected to generate average annual sales of over $100 million. In these systems, we will be supplying wiring for several upcoming platforms to the Dongfeng Group. Our first ComfortFlex module launched in July with GM. By combining heat, ventilation, and massage components into a more efficient solution, we reduced the thermal comfort part numbers shipped to the just-in-time assembly plant by 50%, and our system enhanced the end consumer experience by improving pressure and sensation to the occupant by 30%. Interest for our ComfortFlex solutions continues to grow. During the quarter, we were awarded our second program with a premium European OEM. We will provide the heat and pneumatics as well as other components in a ComfortFlex module. For Hyundai, we will be providing steering wheel heat combined with hands-on detection sensors. Our innovative products continue to earn recognition from key industry groups. The Zone Control Module, our E-Systems team developed, was named an Automotive News PACE Award finalist. Its highly configurable software increases the ability to scale. The unique design improves the flexibility to adapt to changes in the wire harness connectors, enabling increased automation for manufacturing. The first-generation models are expected to launch in two thousand and twenty-five, with plans for a broader adoption. Lear continues to lead the J.D. Power US Seat Quality and Satisfaction Study, with eight top awards, more than double the awards of any other seat supplier. Lear swept the premium car category and won an additional three top three finish in the premium SUV category. These awards once again solidify our leadership and quality. Turning to slide seven, I will provide an update on the initiatives we are pursuing to achieve long-term, sustainable revenue and earnings growth through innovation in both our products and our processes... Our customers are reassessing their powertrain strategies to align with customer demand while meeting regulatory requirements. Our product portfolio is largely powertrain agnostic, allowing us to win new business for any new vehicle. Chinese domestic automakers continue to gain market share. Leveraging our relationships with key customers to win new business has been a priority for both Seating and E-Systems. Our new business wins with BYD, Xiaomi, Seres, and the Dongfeng Group are a result of this effort. New programs with Leapmotor, NIO, and Xiaomi were key contributors to our backlog this quarter. We are seeing additional opportunities as these automakers are looking to grow globally. Our focus on innovation and automation through IDEAL by Lear is driving growth opportunities for our products while further reducing our manufacturing costs. The internal design and superior execution of our new capital deployment in our facilities allow us to bring products to market quicker while reducing the cost. The efficiency actions we have taken, along with the investments in automation and restructuring, have us on track to reach our headcount targets for the year. E-Systems has already achieved its 6% reduction target, and Seating is on pace to meet or exceed its 8% target. Much of the improvement is coming from our most labor-intensive products, such as cut and sew, wiring, and other component facilities, well, largely in Mexico, as well as from our footprint actions in Europe. In Seating, the interest from our customers for our ComfortFlex and ComfortMax seat products continues to grow. The launch of the first ComfortFlex module and additional business wins illustrates the progress we have made. Our list of opportunities for ComfortFlex, ComfortMax, and FlexAir has grown to 62 projects with 22 OEMs, an increase of 40% since the end of 2023. These projects will enable us to achieve our $1 billion revenue target for thermal comfort by 2027. Lear View is our AI-based proprietary vision system technology. Leveraging the software capabilities we have acquired over the last several years, Lear View enables us to use low-cost, off-the-shelf cameras to develop vision system solutions for many applications across both businesses. Our first application for Lear View enhances our trim defect detection to improve consistency and quality in our just-in-time plants. We have identified additional opportunities to utilize Lear View, such as for wire connection detection and other end-of-line testing application. We continue to expand the use of the Thagora automated leather cutting technology and are extending the use of Palantir cloud-based operating systems Foundry for digital reporting. Our teams continue to develop new use cases for the Foundry software to improve real-time decision making on the plant floor. In E-Systems, our focused product portfolio has helped improve margins over the last two years. The growth of the connection systems capabilities we acquired through M&A has been a key driver of that improvement. We continue to expand our vertical integration opportunities and extended our footprint to serve the European market. The new innovations we are developing in our core products, such as our Pace Award Climate Zone Control Module, will continue to drive growth in E-Systems. The flexibility we are designing into our products allows us to increase the use of automation, further improving the cost structure. To offset labor inflation, we continue to aggressively shift our wiring operations to new lower-cost manufacturing locations. We are leveraging our footprint in North Africa to supply the European markets. In North America, we are moving more wire operations to Honduras. Today, our headcount is about 60% in Mexico and about 40% in Honduras. We expect a shift to 40% in Mexico and 60% in Honduras over the next couple of years. Our focus on product process innovation, combined with restructuring our footprint to reduce excess capacity, has us well positioned for any production environment. Slide eight. Excuse me. Slide eight highlights Lear's growth with Chinese domestic automakers. Lear has thirty years of automotive experience in China. Over that time, Lear has strengthened its local presence, built strong relationships with key customers, and has become the clear leader in luxury seating. We continue to grow with key established customers such as BYD, Geely, Changan, and the Dongfeng Group, and see additional opportunities with the emerging automakers such as Xiaomi, NIO, Leapmotor, and XPeng. The new business wins with BYD are consistent with our target of supplying approximately 30% of their seats in the next few years. The portion of our total revenue from Chinese domestics grew from about 20% in two thousand and twenty-one to roughly 30% in two thousand and twenty-four. During that time, our total revenue in China grew from about $4 billion to approximately $5 billion, despite the significant shift in market share from the multinational automakers to Chinese domestic OEMs. By 2027, we expect our revenue to grow on average 6% annually to approximately $6 billion. As a result, the portion of our revenue coming from Chinese domestic automakers is expected to approach 50%. China continues to be an important market for Lear, and our relationship with the key domestic automakers is driving consistent growth. 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 Q3. Global production decreased 5% compared to the same period last year, and was down 6% on a Lear sales weighted basis. Production volumes decreased by 5% in North America, 6% in Europe, and 3% in China. From a currency standpoint, the U.S. dollar weakened against both the euro and RMB. Slide 11 highlights Lear's growth over market. In the Q3, revenue outperformed the industry in both Seating and E-Systems, as well as in each of our major markets. Total company growth over market was 3 percentage points, with Seating at 3% and E-Systems at 5%. Growth over market was particularly strong in North America at 7 percentage points, reflecting favorable backlog and platform mix in both segments. Seating benefited from higher volumes on General Motors full-size trucks and SUVs, as well as conquest wins on the Jeep Wagoneer and Grand Wagoneer. In the E-Systems business on the General Motors Ultium platform, including the Honda Prologue and Acura ZDX, as well as higher volumes on the General Motors Colorado Canyon and Ford Super Duty, contributed to the strong growth in the region. In Europe, sales outperformed industry production by two percentage points, driven by new conquest programs, including the BMW 5 Series and i5 in seating, as well as new business with BMW and Renault in E-Systems. Lower volumes in several Stellantis, BMW, and VW programs negatively impacted seating platform mix in Europe. In China, revenue outperformed the market by one percentage point, driven by new business on the Xiaomi SU7 and two Leapmotor programs in seating and the XPeng Mona in E-Systems. Lower volumes on several GM programs in Seating and on Volvo programs in E-Systems offset a portion of the outperformance in China. We continued to grow our share with key Chinese automakers such as BYD and Geely, 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 6% for the quarter. Turning to Slide 12, I'll highlight our financial results for the Q3 of 2024. Our sales declined 3% year over year to $5.6 billion. Excluding the impact of foreign exchange and commodities, sales were also down 3%, reflecting lower volumes on their platforms, partially offset by the addition of new business in both of our business segments. Our operating earnings were $257 million, compared to $267 million last year. Despite lower sales, operating margins were flat year over year at 4.6%, driven by positive net performance and our margin accretive backlog. Adjusted earnings per share were $2.89, as compared to $2.87 a year ago, reflecting the benefit of our share repurchase program. Third quarter operating cash flow was $183 million, compared to $404 million last year, primarily due to the impact of Lear's fiscal calendar on the timing of customer collections. Slide 13 explains the variance in sales and adjusted operating margins in the seating segment. Sales for the Q3 were $4.1 billion, a decrease of $173 million or 4% from 2023. Excluding the impact of foreign exchange and commodities, sales were down 3% due to lower volumes on Lear platforms, partially offset by the addition of new business. Adjusted earnings were $262 million, down $13 million or 5% from 2023, with adjusted operating margins of 6.4%. Operating margins were flat compared to last year, as the impact from lower production on key Lear platforms was offset by positive net performance and the rollout of our margin accretive backlog. Slide 14 explains the variance in sales and adjusted operating margins in the E-Systems segment. Sales for the Q3 were $1.5 billion, a decrease of $23 million or 2% from 2023. Excluding the impact of foreign exchange and commodities, sales were down 1%, driven primarily by lower volumes on Lear platforms, partially offset by our strong backlog. Adjusted earnings were $74 million or 5% of sales, compared to $79 million and 5.3% of sales in 2023. The decline in margins reflected lower volumes in Lear platforms, partially offset by our margin accretive backlog and strong net operating performance. 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 lower than the latest S&P forecasts 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 4% compared to 2023, and nearly 4.5% on a Lear sales-weighted basis. This is lower than our prior guidance assumption of a 3% decrease in production volumes. From a currency perspective, we are maintaining 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 to the midpoint of our guidance include the following: Our revenue is now expected to be approximately $23 billion. Core operating earnings are expected to be approximately $1.07 billion. We are reducing our outlook for capital expenditures by $75 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 approximately $1.14 billion. The midpoint of our full-year free cash flow guidance remains at $560 million, with the benefit of lower capital expenditures offsetting the impact of lower earnings. 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 down $400 million from our July outlook, primarily reflecting the impact of reductions in vehicle production volumes. The midpoint of our core operating earnings outlook is expected to be down $50 million from our prior outlook. The reduction in our core operating earnings outlook reflects the impact of lower volumes, partially offset by improvements in net performance. Slide 18 provides detail on the drivers of net performance. Our consistent investment in operational efficiency has positioned Lear as the most competitive supplier in terms of both quality and cost. Over the past three years, we have generated an average of 40 basis points of margin growth per year, exceeding 50 basis points per year in E-Systems through net performance. In 2024, we expect 30 basis points of net performance in seating and 40 basis points in E-Systems, driven by investments in advanced manufacturing and restructuring, as well as from commercial recoveries. This performance is expected to improve operating earnings by approximately $100 million, helping to partially offset the negative impact of lower industry volumes. Through strategic acquisitions of automation capabilities, we have transformed our manufacturing processes, resulting in improved quality and efficiency. Deployment of these capabilities will allow us to accelerate our efforts and continue offsetting wage inflation while supporting margin expansion in both segments. Our plans to reduce headcount by 8% in Seating and 6% in E-Systems as compared to the end of 2023 remain on track. These restructuring actions will help to align capacity with demand while shifting our footprint to regions with lower labor costs, including North Africa and Central America. Our strong competitive position and the value proposition we bring to our customers helps us with commercial negotiations to address changes in production volumes, inflation, and other matters. We've continued to focus on negotiating commercial agreements that ensure sustainable financial returns. Moving to slide 19, we highlight our commitment to continue to return capital to shareholders. In the Q3, we accelerated share repurchases, buying back $209 million worth of stock. We continued to repurchase shares in our quiet period and achieved our target for the year of $325 million, with capacity for further repurchases in the Q4. Year to date, we have reduced our share count by more than 4.5%, which will help drive EPS growth going forward. Since initiating the share repurchase program in 2011, we have repurchased $5.5 billion worth of shares and returned over 85% of free cash flow to shareholders through repurchases and dividends. Our current share repurchase authorization has approximately $1.2 billion remaining, which allows us to repurchase shares through December 31st, 2026. Now, turning to slide 20. This slide highlights the key factors that will impact our financial outlook for 2025 and beyond. In recent years, the automotive industry has faced a variety of challenges, including a global pandemic, a semiconductor shortage, fluctuations in commodity prices and FX rates, and elevated wage inflation. To navigate these headwinds, we introduced Lear Forward, a strategic initiative focused on improving capacity utilization through footprint optimization and increasing flexibility across the two business segments. In addition, we streamlined our portfolio to prioritize investments in products that leverage our core capabilities and strengths in engineering and manufacturing. Currently, macro conditions, including vehicle affordability, the regulatory environment, and wage inflation, continue to weigh on the automotive industry. The unprecedented transition to electric vehicles has caused near-term uncertainty around vehicle production. As customers assess their powertrain strategies, we have seen a delay in sourcing activity, particularly in North America and Europe. Consistent with our historical track record, we are taking actions such as improving our operating performance, optimizing our footprint through restructuring actions, and resolving commercial negotiations with our customers. We continue to make significant progress through our Idea by Lear initiatives, including aggressive steps to accelerate the deployment of automation. These performance improvement actions, coupled with growth opportunities through innovative products, conquest wins, and customer diversification, have positioned both businesses for sustained revenue growth and margin expansion. Now I'll turn it back to Ray for some closing thoughts. Thanks, Jason. Please turn to slide twenty-two. Lear has been positioning itself for long-term success in any industry environment through our continued focus on what we can control and the execution of our strategic initiatives. In seating, we are accelerating the deployment of our thermal comfort systems products. Our ComfortFlex module solutions are entering the market, and we are continuing to win new business for future applications. In E-Systems, we are winning new business across all powertrains, resulting in strong growth. We continue to diversify our customer base in both Seating and E-Systems- ... The relationships we have built with Chinese domestic automakers is driving new business opportunities for both businesses, and we are starting to see increased opportunities to grow with the Japanese OEMs. The investments we are making in advanced manufacturing and capacity optimization is improving our cost structure and allows us to be the most competitive supplier in our key products. During the quarter, we accelerated the pace of our share repurchases to take advantage of the current share price. As a result, we repurchased our target of $325 million worth of shares, reducing the share count by over 4.5% since the beginning of the year, driving earnings per share growth. We remain committed to returning excess cash to shareholders through our dividend and share repurchases. And now we'd be happy to take your questions. Ladies and gentlemen, we'll now begin the question-and-answer session. To ask a question, you may press star and then one on your touch-tone telephones. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys. To withdraw your questions, you may press star and two. At this time, we'll pause momentarily to assemble the roster, and our first question this morning comes from Joe Spak from UBS. Please go ahead with your question. Thanks. Good morning, everyone. Good morning, Joe. I guess just to start, you know, with the implied Q4 guidance, looks like you've taken a pretty punitive view on Q4 production. I'm wondering if that's, you know, something you're seeing specific to your customers or platforms, some conservatism, and then, you know, what are your sort of early indications here for 2025? Because you previously talked about, you know, the backlog as being impacted by slower EV uptake. It feels like in the quarter since then, things have gotten worse. Now, you're saying, you know, some sourcing activity is being delayed. I know there was a chance that you said that existing programs could be extended or higher volume on existing programs could occur, but you know, just how do we sort of put all these pieces together as we start thinking about next year? Yeah, lots of process there, Joe. Start with the Q4. You know, I think that in both our businesses, our interaction with our customers has, you know, given us a pretty clear line of sight on what volumes are going to look like through the balance of the year. And it, the Q4 did deteriorate pretty significantly, even from what we were seeing, you know, sort of mid-Q3, as we updated our view on the year during the conference at that point. And so we are seeing the Q4 about 5.5% lower than IHS, or almost 8% lower on a Lear sales-weighted basis, and 11% lower in Europe. Specifically, I think Europe is probably where the biggest disconnect lies between what, you know, IHS or S&P is projecting and what we're seeing from our customers, seeing and hearing. You know, Europe, we have down year over year, about 19% in the Q4, North America, down 9%, and China, down 7.6%. So that's what we've factored in. I don't think it's... I would refer to it as conservative. I believe it's balanced. You know, there are some platforms doing better than others, but that's how we're seeing the market, overall. In terms of 2025, I'm sure we'll get this question a number of times, and, you know, I think it's, you know, we'll reserve most of our comments regarding what's gonna, you know, our revenue is going to look like next year and, and what our view is on industry volumes until we get to our Q4 earnings call. But I can spend a few minutes talking a little bit more about the sourcing environment, which we referred to in the prepared remarks and so what we're seeing in that regard. Not singling out, you know, one customer, but sort of speaking in generalities, the 2024 new business sourcing that we expected at the start of the year, you know, has progressed much more slowly. So programs that we expected to complete the sourcing process have been considerably lower than what we would see in a typical year. And so what we're seeing, I think, is the impact of our customers rethinking their powertrain strategies, trying to design costs out of their battery systems, in particular on EVs. And we're seeing a lot of what we would call RFIs as opposed to RFQs. And so that has led to a little bit slower, longer quote process than we would ordinarily expect to see. Just to give a little insight. The RFI is request for information, and what we're seeing is there's a lot of different scenarios planning within the multinationals on, like Jason explained, for cost or efficiency or what the ban really looks like. So as opposed to a request for quote, which leads to an award, we're seeing a lot more in the pipeline, a request for information that then they're modeling inside for different evaluations and building their models for, you know, what the vehicle cost and what the architecture would look like. We have seen an acceleration in RFIs over the last several quarters. I think, you know, that's prudent, and I think it'll lead to, you know, a more competitive offering with our key customers as new programs launch. So I don't think it's a bad thing. I think it's a good thing, but it will have an impact, most likely, in our three-year backlog that we would report on our Q4 earnings call. As we're thinking about, you know, our performance in both business segments, our win rate on business that's been sourced is consistent with what we've seen in prior years, and I think that's a key point. Our competitive position in both business segments has improved dramatically over the last twelve months. I'll start with Seating. Because the investments we've made in product and process innovation, more specifically, what we've done around thermal comfort and modularity and the advanced manufacturing processes that really facilitate what we're trying to accomplish in automation and reduce our capital costs going forward. We've extended the competitive advantage that we already had in seating coming into the year. We've extended that advantage, and I think there's a couple important data points that really reinforce this. One, you know, the overall seating business quote and sourced so far this year, again, we've won it, consistent with our historical win rate. Our quote pipeline at the end of the year is higher than it was at the start of the year, so the population of new business opportunities available to us is growing. And an important subset of that, in particular, our conquest opportunities are at a record level. We're not gonna win everything in that population, but we have over $3 billion of conquest awards that we're being asked to quote by our customers. And I think that's a recognition by our customers that we have created a point of differentiation on quality, on cost, and of course, on innovation. So I think those two factors taken together, just the overall win rate and then our conquest opportunity and the size of the pipeline, really gives us a confidence and a clear path to meeting or exceeding the market share target of 29% in JIT seating over the next several years. In E-Systems, we're seeing an increased interest from both important existing customers and new customers, and we have two of the largest conquest opportunities in our history, potentially, to be sourced over the next three to six months. Again, we may not win both of those, but the fact that we're being asked to quote programs that we didn't previously have access to is a really important development. Our quality performance, our consistent execution in E-Systems, our leading manufacturing cost footprint, you know, the position we have already in Honduras, the strong position we have in North Africa, and then leveraging the relationships we have with the Chinese domestics, particularly on the seating side, that's really what's leading to that kind of increased population of conquest growth opportunities in E-Systems. You know, I think both businesses are really poised to generate significant growth over the midterm and long term. The near term is going to be really impacted by just the pace of some of the EV programs in the pipeline that are launching. I think similar to what we saw this year with our backlog, you know, it came down meaningfully from what we released in February to kind of where we ended up, you know, at this point. I think our initial backlog for 2024 was $1.2 billion. We see that around $885 million now. As we look out to next year, we see a similar phenomenon in terms of just lower volumes and delayed launches on many of the programs that comprise that backlog. We'll provide a lot more detail, of course, on the Q4 earnings call. Yeah. That's an incredible amount of detail already, so thanks for that. If I could just ask one other quick one here. If I look at slide eight, on your China progress, which has obviously been pretty good, it does seem like you're assuming, like, maybe like a 2% annual decline in China for the multinationals, and I think we've seen greater declines to date. So are you expecting that to moderate over the period, or is there you know, supplanted by maybe some share gains there? Yeah, we're expecting the share shift to continue, but at a more moderate pace than what we've seen over the last, certainly the last 12 months, 24 months. You know, we're building a plan in this timeframe that has about 10 points of additional share shift from our traditional customers to the Chinese domestics. So we're trying to be, you know. We're obviously cognizant of what's happening in that market. We're repositioning our efforts really around growing with Chinese domestics. But there are platforms with traditional customers that are continuing to perform quite well. And while we've seen some pullback recently with the luxury brands, German OEMs, generally speaking, those platforms are still performing quite well, particularly on the higher ends of that market. Thank you very much. You're welcome. Our next question comes from John Murphy from Bank of America. Please go ahead with your question. Good morning, guys. Good morning, John. Our first question, Ray. You know, it's interesting, you were talking about how the bidding processes, it seems like it's slipping or slow this year relative to expectations in past years. I mean, there's a lot going on there. One thing we've also heard is that in the bidding process, in the RFI or in the RFI process, not the RFQ side, is that there's a lot of discussion about a plan A bid, sort of normal course, including China and Taiwan content, and then a plan B bid or, you know, information with ex-China and ex-Taiwan content. Obviously, you know, there's many reasons why, you know, the automakers might be requesting that, considering that the proposed auto tech ban here in the U.S. and many other reasons. Are you hearing that, and is that really jamming up the process, you know, on bidding as well? I think what we've seen in it may be around some of the electronic components, in that you have a dual design or dual source. ... solution in the event that you have backups, and so we have seen that, and we're very familiar with that, and so we've been working on that for a long period of time, so I don't think that's anything new. You know, I think with the RFIs that we're seeing, they're more around different architectures, different architectural designs, different battery layouts in designs within the battery for efficiency, and those are taking a little bit longer time as they're assessing different types of use cases within the vehicle based on the design and the platform that they're looking to source, and so you know I think on the seating side, it's been somewhat helpful because it gives us an opportunity, and Frank, and Frank's here. And we've talked about it, John, is that we're now in with the modular concept, with our capabilities around automation. It's been something that has been very unique to offer a solution that is somewhat, you know, not traditional and more innovative, and it helps lower their overall cost. And so, you know, on the E-Systems side, it's more around the architecture and what they're looking at and how they're looking at future designs and how they're looking at the battery. In the Seating side, it's been extremely helpful because it's kind of opened the door to a nontraditional sourcing model. And you know, right now, we've had some very constructive, positive meetings on how we can drive the modular solution to really drive out efficiency and really create a better cost, better seat system. And that's why when we hint to the success we're having now with the Japanese OEs, they they've really opened up. I was just in Japan several weeks ago, talking to key customers there on our innovation on the manufacturing side. They're they're looking for it. And then, obviously, it's been very helpful with the Chinese domestics. It's been the thing that's opened the doors, our innovation. And so, you know, I think the way we've separated ourselves, particularly in seating with innovation, with the modular design and automation, is allowing us to get into these RFIs differently. Because they're not looking at a traditional statement of requirement, and let's just keep plugging and hugging on a very similar fashion. They're open to these ideas, and we've had some very, very constructive, positive meetings that I think are going to lead to some good awards. But, you know, this leads us to one word that I don't like is patience. I mean, unfortunately, these you have to have patience because these bids are going through their systems and trying to figure it out. So, you know, we'll have patience. We know we have superior designs that are going to drive what they're looking for. Like Jason alluded to, we see a big buildup of RFQs coming really in the second, Q3 of next year that we're positioning ourselves, I think, in a very strong position to win. That, that's very helpful. That just leads to kind of the second question around automation and your comments of moving more labor from Mexico to Honduras over the next few years. I mean, obviously, there's always the chase on LCC. It can only go so far, so at some point, you really need to lean heavily on automation, and you're doing that. You know, I'm just curious if you think about, you know, both businesses, you know, how far you can go on automation and how low you can get labor as a percent of total costs. I mean, at some point, you're going to have to automate more and more over time, but how far can that ultimately, you know, what's the asymptotic limit? Yeah, it is a combination of both, and I think it's both in what we look at as far as cut and sew and wiring. And as we're even moving, and I do agree with you, labor arbitrage is something that will run its course, and so we do it in parallel. And then I think, you know, our vision is obviously lights out. I mean, everything that we look at in respect to what we're doing is how do we get to the ultimate, you know, scenario of lights out? And, you know, it's what's great about what we've done with these acquisition, and we've talked about it previously, is we're manufacturing our own capital. are certain things that are commoditized that we don't need to go after, like we discussed with camera, cameras and, you know, cobots and robots. Those are commoditized to a point where we can get those very efficiently. It's the software algorithms, when I talk about Lear View. We're writing our own software. The WIP automation software company that we purchased gave us in-house capabilities with AI algorithm softwares that allow us to differentiate on the floor, not just from an efficiency standpoint, but what we're seeing is the benefits with quality, throughput, ergonomics, everything. It hits them all, and we're keeping that all in-house. Why we acquired these companies is we're not using that and selling it to any of our competitors. It's very, very distinctly designed for our internal use. I think what's great, too, is we're seeing a serious reduction in capital costs, because as we manufacture our own capital for our own use, we're seeing a 30-40% reduction in capital and the cost of capital to deploy. I think we're going to continue to see that. To your original question, yeah, the goal is to continue to automate the areas that we are very labor intensive and that we can become much more efficient, and we're doing that. The benefits that we're seeing with capital costs going down, the efficiencies, the way we differentiate ourselves, the reason the customers, I think, are very attractive to how we're laying out these RFIs, is because it's unique to Lear. We're not buying off-the-shelf stuff. We're buying things that we manufacture, that we produce, that are unique to our, our own designs and our own manufacturing needs. And so it- You know, like I said, patience is a word I have a tough time with, because it's all about go fast, go fast, go fast. But as you're walking the customers through it, and they have an appreciation for it, and they see it, they really understand how we're differentiating ourselves and what benefits they can get across the board with quality, throughput. You know, even job satisfaction from our employee perspective has been incredible. So, but our target is to in parallel work both of them. Okay, one quick one for Jason. It just looks like there's a little bit more pressure on net income on the implied in the Q4 than there is in core operating income. Actually, like a fair amount more pressure. Is there something going on in the balance between core operating earnings and equity income in the Q4, where equity income is getting hit much harder by your assumptions? Yeah, let me just take a quick look. I mean, there, our equity earnings are expected to be down about $2 million in the Q4. I think, you know, we probably have a little bit of breathing room in that number. There isn't anything meaningful that's happened with the non-consolidated joint ventures. Maybe a bit of conservatism in the assumption around non-consolidated earnings in the Q4. Okay, we can follow up later. Thank you so much. Yeah. Our next question comes from Mark Delaney from Goldman Sachs. Please go ahead with your question. Yeah, good morning, and thanks very much for taking the questions. First, I'm hoping you can help us to better understand what to expect for growth over market in both Seating and E-Systems over the next two to three years. The company spoke today around some sourcing headwinds, but you've also seen better momentum within China, so maybe you can help us better contextualize what that all means for growth over market in the intermediate term. Yeah, I think that we've been positively surprised by the growth over market performance this year. I mean, our growth on existing platforms has held up better than we had expected when we started the year. But as we look out over the next twelve months, it's really challenging, given you know all the uncertainty that we described in the prepared remarks in the near term with regards to customer demand on particular platforms and in segments. Longer term, we still have a high degree of confidence in our four points of growth over market in seating and six points in E-Systems, driven by what we described in terms of our conquest opportunities available to us that we're participating in in both business segments. So I think, you know, that's at this stage, we're not ready to guide to a growth over market number for next year. But longer term, the plans that we have and the win rates that we've seen on business sourced this year and the pipeline we see in front of us would support continuing to achieve those long-term growth objectives. Got it. And my next question was a follow-up, Jason, to just some of the comments you made in regard to Joe's question on backlog heading into next year. You said you're expecting a similar phenomenon in twenty twenty-five versus twenty-four. I'm hoping to better understand what you meant by that. I mean, did you mean you think you'll see backlog revised down by something like the 25%-30% you're seeing this year, and it was $800 million at the start of the year? Or did you mean you think net backlog getting into twenty-five is still going to be in the $800 million or so range, like what you're now expecting for twenty-four? Thanks. Yeah. So Mark, you know, again, we're not ready to provide a pinpoint number, but we are seeing a meaningful reduction in the $800 million backlog that we had initially anticipated for next year. And that's really driven by the assumptions around some of the key platforms in our backlog. In particular, with Stellantis, we have the Ramcharger and Ram REV programs. And, you know, our assumption around the timing of those launches and the volumes in that first year was much higher and much sooner when we established the backlog. So that'll probably be the single biggest factor that's changed. In terms of the similar phenomena that I was referring to, you know, programs like with Volvo and the EX90 and Polestar 3, and some of the GM EV platforms, we're now expecting lower volumes on those platforms than our initial backlog assumed. So we do expect to see that $800 million backlog move down, you know, in a not insignificant way. I don't, again, want to put a pinpoint number on it because we're still working through it, but it will come down. Thank you. Our next question comes from Colin Langan from Wells Fargo. Please go ahead with your question. Oh, got it. Thanks for taking my questions. Just, earlier it was asked, I just didn't get a clear answer, or maybe I missed it. I apologize if I did. So if we talk about the Q4 margin, I think it's something like 4.2% at the midpoint of your current guide. You're at 4.8% for the year. How should we think about getting margins back on track into 2025? What's sort of unique about Q4, or should we consider the risk into 2025? Yeah, it might be helpful just to explain sort of the sequential bridge from the Q3 to the Q4. You know, there's two things going on. One, we've assumed lower revenues, about $125 million sequential reduction in sales from Q3 to Q4. And so you have, you know, call it 20-25 million of variable margin associated with that. And so that's the biggest driver of the margin sequentially. And then, you know, historically, the Q4 was kind of our strongest quarter from a commercial negotiation, commercial settlement standpoint, and this year is a bit unique in that we've had settlements that have happened throughout the year. What happened in the Q3 is we completed a couple of key negotiations in Seating that pulled ahead about $15 million that we had anticipated in the Q4 into the Q3. There is some out of period benefit in the Q3, you know, about $15 million of items that we completed in the Q3 that really related to the first half of the year, that settled in the Q3, and we had anticipated that happening in the Q4. You may recall we had guided Seating to 6% margins in the Q3, and that would've been 6.4% in the Q4 in our prior guidance. It's now reversed. So we improved to 6.4% on the back of that negotiation in the Q3, and now we're back down to 6%, in the Q4. E-Systems were expecting consistent margins in Q3 and Q4 of 5%. Your number overall is right. At 4.2% is what the operating margin would be, in the Q4. As we think about 2025, because of the sort of choppiness of these commercial negotiations, and I think the inventory correction that's happened with some of our largest customers in the Q4. Stellantis has talked very publicly about that. Other customers have talked about it. I think GM talked about it on their earnings call, maybe lower full-size truck and SUV volumes in the Q4 and the Q3, things like that. What would lead you to, you know, I think, use the full year results as the launching point for looking at 2025 instead of the Q4 or the second half of the year. So as we move into next year, you know, I would say the run rate of Seating is 6.5%, and the run rate of E-Systems is 5% or just above 5%. It's the right way to think about where you start heading into 2025. Got it. That's very helpful. As we think about twenty-five, two of the big factors into this year have been labor cost inflation, and then also, I think it looks like you now have about 1% negative customer mix. It does seem like you're still under-indexed in China. How should we be thinking about those two big factors as we go into next year? Is labor inflation easing a bit, so it's not as much of an issue? Yeah, we are seeing an easing of wage inflation, a modest reduction from what we experienced this year. We don't see it going back down to sort of that 2021, 2022 level, but we do expect it to be less of a headwind next year than what we experienced this year. So that's, you know, we get a bit of a head start on our net performance targets in both businesses next year as a result of that. In terms of, you know, trying to call the volume on our car lines for next year, at this point, I think it's premature. There's just a lot of moving parts, you know, think about the election and everything else in front of us. So we'll save that for the Q4 earnings call, Colin. Okay. All right, thanks for taking my question. Yeah, thank you. Our next question comes from James Picariello from BNP Paribas. Please go ahead with your question. Hi, everybody. Regarding Lear's China revenue mix, so back to slide 8. And thanks, you know, for this level of detail, by the way, again. If we look back to last year, you had roughly $4.9 billion in sales in China, with about 60% of that consolidated and the difference through your JVs. Is there a similar consolidated versus JV breakout for your 2027 target? And then, can you just provide any color on the margin profile differences of your current domestic OEM relationships compared to the legacy business? Thanks. Yeah, me, I'll take the first part, and then Ray can take the second part of that in terms of the relationships. So we provided a number that includes consolidated and non-consolidated for 2027, and that's because it's a little bit of a moving target. I mean, we're in discussions in certain JV relationships that we have right now, where that could change. You know, and we may end up with some non-consolidated business that today becomes consolidated in the future. Not to make a commitment on that, but that's the reason we chose to present it this way. We don't know is the short answer what that split looks like in 2027 because of what we're trying to achieve in terms of taking more control of certain certain joint ventures in the region. In terms of the customer relationships. Yeah, it's first of all, the team that we have on the ground in China is outstanding. They have incredible relationships with, you know, the key domestic Chinese players. And I think obviously, I think it's evident by the growth that we've seen and the inroads we've been able to obtain. I think with BYD, for example, having 30% market share of their seat business, from which really was an in-house, you know, captive player as far as seating and our ability to expand that quickly. The Xiaomi, the new technology that we're bringing in that vehicle, over a relatively quick period of time, has been incredible. I mean, tonight, we're all going to dinner with one of our key partners and customers within China. So we continue to, I think, build outstanding relationships, but relationships are one thing, and it's part of it, but I think the technology and innovation we've been able to bring forward has really differentiated ourselves. I think it's one of the reasons why we've been so successful, and one of the reasons I think we have so much confidence in our ability to not just expand and grow with the domestics in China, but the relationships as they grow and build outside of China, with new facilities that we've been continuing those relationships. And so I think there's gonna be continued, without question, continued growth, not just within China, with the domestic Chinese, but outside of China. And so ... You know, the relationship's one part of it, but I think it's having the technology and innovation to back it up is the key ingredient, and we've been able to do that. I couldn't be more happy with the team and their success in what we're achieving with the domestic Chinese. It's really helping us. And I think when we think about growth, just to take a moment, you know, I know the world's shifting. There's a lot of industry challenges. Everyone's looking at market share declines, but, you know, like Jason talked about, we're very confident in continuing with the multinationals, with conquest wins. We have some big, big opportunities in front of us in both seating and systems that we've been given a lot of feedback that it, you know, it's business that is very, very open and able for us to win. So we can continue to grow with the multinationals, I'm convinced of it. I think the domestic Chinese, we position ourselves very well, so I think we're going to grow without question with the domestic Chinese. And like I mentioned, the Japanese, which has been a closed door for so long for us, I mean, we've won business in certain regions, certain areas, certain components, you know, that door is open. And so, as market shifts are changing, doors are opening in different ways. We have, I think, a strong continuation of conquest wins in both E-Systems and seating. I love our position with the domestic Chinese, and we'll continue to grow with them. This new opportunity with the Japanese is real. I like our growth opportunities longer term. There's no question about it. Appreciate that color. Really helpful. So, just on buybacks, you had targeted $325 million for the year. You've essentially achieved that a full quarter early here. Just how should we be thinking about the rest of the year? Thanks. Yeah, James, we have the capacity, based on our free cash flow outlook for the year to do more in the Q4. I think, you know, $50 million-100 million is a reasonable target as we look at our plans for the quarter. So, I would expect something in that range. Thanks. Thank you. Our next question comes from Adam Jonas, from Morgan Stanley. Please go ahead with your question. Hey, guys. Good morning. It's William Tang on for Adam Jonas. I think, you know, I think tariffs are a very topical conversation right now, you know, especially with the election. I think it'd be useful if you guys could talk about how you're going about managing any potential tariffs, you know, especially I think with Mexico, because I know you have a lot of footprint there. And, you know, if you guys don't want to give commentary, that's fine, but I think it's very topical. Thanks. Yeah, I think with regards to Mexico, you know, the disruption of the auto industry overall would be significant. I think there's a very low likelihood of that happening. I think we have some time before USMCA is going to be renegotiated. But at the same time, we do have the benefit of shifting footprint from Mexico to Honduras, so we're not just dependent on that region for low-cost labor. But I would say that our view at this point is that a change in the tariff regime or scheme in Mexico is unlikely. Got it. No, that's all very helpful. I think on the EV side, you know, I think OEMs, you know, you see GM with their targets at their investor day, OEMs hyper-focusing on getting to that gross margin positive on EVs. Have you guys seen anything new in terms of price downs, decontenting, anything that impacts you guys, you know, as OEMs try to get to that gross margin positive? Well, I think, like I mentioned earlier, what it has opened the door for opportunities which we pride ourselves on, and cost technology optimization to continue to drive, be the most efficient, all the things that I think we're very good at, operational excellence. But it's also opened this opportunity that we talked about earlier on modularity, seat designs, you know, how we look at the proliferation, how we can actually drive costs down. So when we're getting in these RFIs, it's kind of changing the way you can look at redesigning our key components. I think it's very helpful, given the investments we've made around efficiencies within our manufacturing plants, the investments we've made around product and the vertical integration and nature of our products, and how we can, you know, combine components, redesign components. So it has, I think, accelerated. You know, like I always say, timing is everything, and we couldn't be in a better time because they are looking at, you know, moving away from what is considered traditional statement requirement, how they've been doing things, to really looking at things differently. That's how we won the Ford module. You know, we've talked about the 62 different programs that we're in development on. I think a lot of that is because of the environment we're in and the need from the customer to think differently. And so it's enlightening. It, like I said, it takes some time. You have to have some patience, but you keep working it, and we are looking at how we can help them. But we haven't seen any significant changes in respect of, you know, major launches of new productivity agreements or those type of things. It's been. That's been pretty much status quo. Got it. Thanks, guys. Appreciate it. Thank you. Thanks. And our final question today comes from Dan Levy, from Barclays. Please go ahead with your question. Hi. Thanks for squeezing me in here at the end. This is Trevor Young on for Dan Levy. Just wanted to first start with a follow-up on a comment you made earlier around your expectation for 10 more points of share shift in China to the domestic OEMs. If you could give a sense of if that was through the, if that's for the timeframe through the 2027 period, you gave your estimate through? And then if that, you know, if there were to be a faster than expected share shift towards the domestics, do you believe you'd need to ramp up additional capacity in China to serve them, the domestic OEMs, or would you be able to leverage your existing footprint? Yes. We'll start with the first part. 2027 was the timeframe that we had in mind in terms of that 10 points of share shift between now and then. And so, in certain cases, we may be able to repurpose capacity that we have, particularly in our component plants, and in our wire business with traditional customers. We could repurpose much of that capacity for domestic Chinese customers if that business opportunity presents itself. A lot of that will depend on the physical location of the customer plant in question. And so if there's a mismatch there, then you may see some additional CapEx to support growth with the Chinese domestics, if they're more successful taking share, you know, more quickly. Okay. That's, that's helpful. Thank you. And then just as a last follow-up, if you got time, just a last follow-up on the corporate EBIT improvement. It looks like, you know, you've seen three Q and two Q of this year a bit below where we were looking at in the past. Is this something you expect to be, you know, a consistent level going forward? Yeah, it's. I wouldn't say. I think the full year guidance has us down in the headcount about six million, so it comes back up a little bit in the Q4, so there's a little bit of choppiness quarter to quarter, so I think that, you know, that 2023 actual and our 2024 guidance is where we're trying to, you know, run that headcount strip at, but it depends on the level of opportunities we have and things like Idea by Lear. If If we see an opportunity to invest and we need to support that in a corporate-wide initiative, then you could see that number move up a little bit to support that, but I wouldn't expect meaningful changes in that number in the near term. Much appreciated. You're welcome. Okay, thanks. Well, I think that's it for the questions. I think those remaining on the phone are the Lear team, and I just again wanna acknowledge all the hard work. I appreciate what everyone's doing. I know we're not happy with where we're at. Obviously, there's a lot of things going on in the industry that we're challenged with, but I do appreciate all the hard work on focusing on the things that we can control. There's no question that we have the right strategy. We're doing the right thing. We're investing in the organization, in our capital, in our products, and we will win at the end of the day. And I do appreciate all the efforts that we're making to manage through these very difficult times. So thanks for all your hard work. Appreciate it. And ladies and gentlemen, with that, we'll conclude today's conference call. We thank you for attending today's presentation. You may now disconnect your lines.