Good morning, everyone and welcome to the Lear Corporation Third Quarter 2024 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] 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 third quarter 2024 earnings call. Presenting today are Ray Scott, Lear President and CEO; and Jason Cardew, Senior Vice President and CFO. Other members of Lear’s senior management team have also joined us on the call. Following prepared remarks, we will open the call for Q&A. You can find a copy of the presentation that accompanies these remarks at ir.lear.com. Before Ray begins, I’d like to take this opportunity to remind you that as we conduct this call, we will be making forward-looking statements to assist you in understanding Lear’s expectations for the future. As detailed in our Safe Harbor statement on Slide 2, our actual results could differ materially from these forward-looking statements, due to many factors discussed in our latest 10-Q and other periodic reports. I also want to remind you that during today’s presentation, we will refer to non-GAAP financial 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 third quarter financial results and provide an update on our 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. Please turn to Slide 5 which highlights key financial metrics for the third quarter of 2024. Lear delivered $5.6 billion of revenue in the third quarter despite a very challenging production environment. Core operating earnings for $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 a $183 million in the third quarter and free cash flow was $51 million. Slide 6 summarizes key business and financial highlights from the quarter. Total company revenue outperformed the market by three percentage points with sales in both segments leading 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 continue to repurchase additional shares throughout our quiet period, achieving the full year $325 million target communicated in our second quarter earnings call. Adjusted earnings per share grew by 1% in the third quarter, 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 Volvo. 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…

Thanks, Ray. Slide 10 shows vehicle production and key exchange rates for the third quarter. 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 third quarter, 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 three percentage points, with Seating at 3% and E-Systems at 5%. Growth over market was particularly strong in North America at seven percentage points, reflecting favorable backlog and platform mix in both segments. Seating benefited from higher volumes on General Motors full size trucks and SUV's, as well as complex wins on the Jeep Wagoneer and Grand Wagoneer. EV-Systems business on the General Motors Ultium platform, including the Honda Prologue and Acura ZDX, as well as higher volumes on the General Motors Auto and 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 in i5 and Seating as well as new business with BMW and Renault and 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 leap motor programs in Seating and the Xtang [ph] 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…

Thanks Jason. Please turn to slide 22. 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.

[Operator Instructions] 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 with the implied fourth quarter guidance, looks like you've taken a pretty punitive view on fourth quarter production. I'm wondering if that's something you're seeing specific to your customers or platforms, some conservatism? And then what are your sort of early indications here for 2025? Because you previously talked about the backlog was being impacted by slower EV uptake. It feels like in the quarter since then things have gotten worse. Now you're saying 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 just how do we sort of put all these pieces together as we start thinking about next year?

Yes, lots of process there, Joe. Start with the fourth quarter, I think that in both our businesses, our interaction with our customers has given us a pretty clear line of sight on what volumes are going to look like through the balance of the year. And the fourth quarter did deteriorate pretty significantly, even from what we were seeing in sort of mid, mid third quarter as we updated our view on the year during a conference at that point. And so we are seeing the fourth quarter 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 IHS or S&P is projecting and what we're seeing from our customers seeing and hearing Europe, we have down year-over-year, about 19% in the fourth quarter. North America down 9% in China down 7.6%. And 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. There, 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 I think it's, we'll reserve most of our comments regarding what's going to -- our revenue is going to look like next year and what our view is on industry volumes until we get to our fourth quarter earnings call. But I can spent a few minutes talking a little bit more about the sourcing environment which we referred to in the prepared remarks and sort of what we're seeing in that regard, not singling out one customer, but sort of speaking in generalities. The 2024 new business sourcing that we expected at the start of the year 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 EV's. 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 demand 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 request for information that then they're modeling inside for different evaluations and building their models for what the vehicle cost and what the architecture would look like. We have seen acceleration in RFIs or less several quarters.

And I think that's prudent. And I think it'll lead to a more competitive offering with our key customers as new programs launch. And so I don't, 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 in the fourth quarter earnings call. But as we're thinking about 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. And 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. The overall Seating business quote 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 going to 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…

Yes, that's an incredible amount of detail already, so thanks for that. If I could 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 maybe 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 it supplanted by maybe some share gains there?

Yes, 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 or 24 months. 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, 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, 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.

And our next question comes from John Murphy from Bank of America. Please go ahead with your question.

Good morning, guys. A first question, Ray, 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 information with ex-China and ex-Taiwan content. And obviously, there's many reasons why the automakers might be requesting that, considering that the proposed auto tech, auto tech ban here in the U.S. and many other reasons. Are you hearing that, and is that really jamming up the process, on bidding as well?

I think what we've seen, 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. 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. I think with the RFIs that we're seeing, they're more around different architectures different architectural designs, different battery layouts and 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, they're looking to source. And so I think on the Seating side it's been somewhat helpful because it gives us an opportunity. And we were ran it Frank’s here and we've talked about it, John, is that we're in now with the modular concept, with our capabilities around automation has been something that has been very unique to offer a solution that is somewhat not traditional and more innovative and it helps lower their overall cost. And so on E-System 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. And the Seating side has been extremely helpful because it's kind of opened the door to a non-traditional sourcing model. 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've really opened up. I was just in Japan several…

That's very helpful. That just leads to kind of the second question around automation in your comments of moving more labor from Mexico down Honduras over the next few years. I mean, obviously, there's always the chase on LCC can only go so far. So at some point, you really need to lean heavily on automation, and you're doing that. I'm just curious, if you think about both businesses, how far you can go on automation and how low you can get labor as a percent of total costs. At some point you're going to have to automate more and more over time, but how far can that ultimately go? What's the asymptotic [ph] limit?

Yes, it is a combination of both. And I think it's both what we've 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 I think, our, our vision is obviously lay out. I mean, everything that we look at in respect to what we're doing is how do we get to the optimum scenario of lights out? And, it's, what's great about what we've done with these acquisitions, and we talked about it previously, is we're manufacturing our own capital. There's certain things that are commoditized that we don't need to go after like we discussed with camera, cameras and, 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 LearVUE, we're writing our own software. The WIP automation software company that we purchased gave us in house capabilities with AI algorithms, 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. And I think what's great, too, is we're seeing a serious reduction in capital cost 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. And I think we're going to continue to see that. So to your original question, yes, 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. But 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 own designs and our own manufacturing needs. And so like I said, patience is a word I have a tough time 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 the benefits they can get across the board with quality throughput, even job satisfaction from our employee perspective, has been incredible. So but our target is to in parallel work both of them.

Okay. One just quick one for Jason. It just looks like there's a little bit more pressure on net income on the implied in the fourth quarter 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 fourth quarter where equity income is getting hit much harder by your assumptions?

Yes. Let me just take a quick look here. I mean our equity earnings are expected to be down about $2 million in the fourth quarter. I think 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 NAC [ph] earnings in the fourth quarter.

Okay, we can follow up later. Thank you so much.

Our next question comes from Mark Delaney from Goldman Sachs. Please go ahead with your question.

Yes, good morning. Thanks very much for taking the questions. First, I'm hoping you can help us to better understand what to expect for a 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 the China. So maybe you can help us better contextualize what that all means for growth over market in the intermediate term.

Yes. 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 12 months, it's really challenging, given all the uncertainty that we described in the prepared remarks in the near term with regards to customer demand, in particular platforms and in segments. Longer term, we still have a high degree of confidence in our 4 points of growth over market and Seating and 6 points in E-Systems driven by what we described in terms of our conquest opportunities available to us that we're participating in both business segments. So I think that's at this stage, we're not ready to guide to a growth over market number 4 for next year. But longer term, the plans that we have and the win rates that we've seen on business source this year in 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, 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 2025 versus 2024. 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% to 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 heading into 2025 is still going to be an $800 million or so range, like what you're now expecting for 2024? Thanks.

Yes. So Mark, 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 -- we have the RAM charger and Ram programs and our assumption around the timing of those launches and the volumes in that first year was much higher and much sooner when we establish the backlog. So that will probably be the single biggest factor that's changed. And then in terms of the similar phenomenon that I was referring to, programs like with Volvo and 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 in a not insignificant way. I don't -- again, I don't want to put a pinpoint number on it, so 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

Hi, 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 in 2025.

Yes. It might be helpful just to explain sort of the sequential bridge from the third quarter to the fourth quarter. There's two things going on. One, we've assumed lower revenue is about $125 million sequential reduction in sales from Q3 to Q4. And so you have, call it, $20 million, $25 million of variable margin associated with that. And so that's the biggest driver of the margin sequentially. And then historically, the fourth quarter 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. And what happened in the third quarter is we completed a couple of key negotiations in Seating that pulled ahead about $15 million that we had anticipated in the fourth quarter into the third quarter. And so there's some out-of-period benefit in the third quarter about $15 million of items that we completed in the third quarter that really related to the first half of the year that sells in the third quarter, and we had anticipated that happening in the fourth quarter. So you may recall, we had guided Seatings to 6% margins in the third quarter, and that would have been 6.4% in the fourth quarter in our prior guidance. It's now reversed. So we had we improved to 6.4% on the back of that negotiation in the third quarter, and now we're back down to 6% in the fourth quarter. E-Systems we're 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 fourth quarter. 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 fourth quarter. Stellantis [ph] has talked very publicly about that, other customers have talked about it. I think GM talked about in the earnings call, maybe lower full-size truck and SUV volumes in the fourth quarter and the third quarter, things like that. What would lead you to, I think, use the full year results as the launching point for looking at 2025 instead of the fourth quarter for the second half of the year. So as we go -- as we move into next year, 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 2025, two of the big factors into this year have been labor cost inflation and then also, I think it looks like you have about 1% negative customer mix. It does seem like you're still under-indexed in China. Should we be -- how should we be thinking about those 2 big factors as we go into next year's labor inflation easing a bit, so it's not as much of an issue?

Yes. 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 -- 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 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. Think about the election and everything else in front of us. So we'll save that for the fourth quarter earnings call, Colin.

Okay, alright. Thanks for taking my question.

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, thanks 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 disfigured [ph] 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.

Yes. 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, and we may end up with some non-consolidated business that today that becomes consolidated in the future. And 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 joint ventures in the region in terms of the customer relationships.

Yes. It's -- first of all, the team that we have on the ground in China is outstanding. They have incredible relationships with the key domestic Chinese players. And I think -- obviously, I think it's evident by the growth that we've seen in 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 captive player as far as Seating and our ability to expand that quickly. The Xiaomi, and the new technology that we're bringing in that vehicle over a relatively quick period of time has been incredible. I mean, tonight, Rob 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 is really differentiate 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 going to be continued without question, continued growth not just within China, with the domestic Chinese but outside of China. And so the relationship is 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…

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.

Yes, James, we have the capacity based on our free cash flow outlook for the year to do more in the fourth quarter. I think $50 million to a $100 million is a reasonable target as we look at our plans for the quarter. So I would expect something in that range.

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 [ph] talking on for Adam Jonas. I think tariffs are a very topical conversation right now, especially with the election. I think it would be useful if you guys could talk about how you're going about managing any potential tariffs, especially I think with Mexico because I know you have a lot of footprint there. And if you guys don't want to give commentary, that's fine, but I think it's very helpful. Thanks.

Yes. I think with regards to Mexico, the disruption of the auto industry overall would just would be significant. I think there's a very low likelihood of that happening. I think we have some time before U.S. MCA 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, that our view at this point is that, that change in the tariff regimen in their scheme in Mexico is unlikely.

Got it. No, that's all very helpful. I think on the EV side, I think OEMs, 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 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, how we look at proliferation, how we can actually drive cost out. So when we're getting in these RFIs, it's kind of changing the way you can look at redesigning our key components. And so 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 combine components, redesign components. So it has, I think, accelerated like I would say timing is everything, and we couldn't be in a better time because they are looking at moving away from what is considered traditional statement requirement, how they've been doing things, so really looking at things differently. That's how we won the Ford module. 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 for the customer to think differently. And so it's enlightening. 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 major launches of new productivity agreements and those types of things. That's been pretty much status quo.

Thanks, guys. Appreciate it.

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 today. 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 time frame through the 2027 period, you gave your estimate through? And then if that -- 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 time frame 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 more quickly.

Okay. That's helpful. And then just as a last follow-up. Just if you got time, just a last follow-up on the corporate EBIT improvement. It looks like you've seen 3Q and 2Q of this year, a bit below where we were looking at in the past. Is this something you expect to be consistent level going forward?

Yes. It's -- I wouldn't say -- I think the full year guidance has us down in the headquarters about $6 million. So it comes back up a little bit in the fourth quarter. So there's a little bit of choppiness quarter-to-quarter. So I think that 2023 actual and our 2024 guidance is where we're trying to run that headquarter strip that. But it depends on the level of opportunities we have and things like idea by Lear. If we see an opportunity to invest and we need to support that in a corporate line initiative, and 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, want to acknowledge all the hard work. I appreciate what everyone is doing. I know we're not -- we and 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 for 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.