Magna International Inc. (MG) Earnings Call Transcript & Summary

Well, thanks, everybody, for joining us for the next session with Magna. Magna is one of the top suppliers in the world, #2 or 3 depending on the year. Magna remains one of our favorite stocks because it delivers class-leading technology in many parts of the vehicle, above-market growth and maintains an extreme focus on returns and on cash flow that has driven a stalwart balance sheet, it positions it to be an opportunistic, we think, consolidator over time. Unfortunately, stock is -- [ does not crisis in ]. So it's always why it's been historically one of our favorite names. Hopefully, over time, as we get through this crisis, people will understand the strength of the company. Today, we're very happy to have Don Walker, the Chief Executive Officer; Vince Galifi, Chief Financial Officer; Louis Tonelli, Vice President, Investor Relations. Louis wears a lot of hats beyond Investor Relations, and is very helpful to us in understanding Magna.

[Operator Instructions] Now to kick off, thanks, guys, for joining us today. We really appreciate it. One of the big questions that remains out there is how the production restart is working. Obviously, we're hearing the production started in early May for Europe, so in the past week or 2, it looks like we're staring down the barrel of a restart next week in North America. I'm just curious, as you're going through this process, one, sort of the challenges that you're facing as you work through the restart process. But also again, kind of, two, what kind of volumes are you really seeing on this restart? Because I think there's this question of, are we going back at 10%, 20%, 30%, 40% [indiscernible]? Or is it closer to 80% to 90%? And how you see this ramp working over time?

Sure. It's Don here. I'll start off. Maybe just a couple of initial comments, and then I'll talk about the restart. I think everybody's certainly been aware of all of the work that's happened because of the virus. One thing which I've been very pleased with, quite frankly, especially in North America, is how the industry has had a lot of coordination calls, what's going to happen, how are we going to get out of out, what -- a consistent communication to various governments and heads of states, of the various states in the U.S., just to make sure that we're all in the same page. We're all -- when we're talking about restarting, a safe restart will be really, really important. So as the industry comes back in, we don't cause a lot big spike in the virus. Sharing best practices, what's happened in China and then Europe was back next. So there's been -- I've been relatively pleased with that. And I think that was partly because everybody got coordinated after about 6 months when we were renegotiating the NAFTA for the USMCA. So that was -- I was quite pleased with that. We have been through something relatively similar, although it's different, back in the big financial crisis. As far as the health of the industry, I will make some comments on that. When I first started, we -- I'm not sure everybody else did. We started out with about 19 different work streams, looking at everything that could be affected, personal protective equipment, health of our employees was paramount. We're still tracking that on a daily basis. So I've been really pleased with the depth of management, quite frankly, at Magna. We've made a number of changes in recent times with the heads of some of our departments and presidents have had -- I've been really pleased with it. The -- if you look at Q1, we had a big impact from China. We didn't have a huge impact. We went through what the results were there in the decremental margins. We can probably talk a little bit about that. But now that we're -- Magna has taken the opportunity to improve our liquidity position as well. So I think for the most part, Magna and the industry, from what I can tell, is in pretty good shape to restart. Everybody's got the protocols in place. We got to get the employees back and feel safe and provide a safe environment for them. I think the supply base seems to be ready. We'll find out, but the car companies have a pretty good tracking system, and we know who our suppliers are. I'm sure there'll be some hiccups. But China has come back relatively well without a lot of hiccups that I'm aware of. Europe seems to be coming along, even with places like Northern Italy, that was able to get secure supply out of there. The first assembly plant that went back to work in Europe was actually the Magna Steyr assembly plant for the G-Wagen, and that's been going without a hitch, and would hopefully stay. We've been up and running now for a month. So quite frankly, as we come out of this, myself and the senior people at Magna have really been looking at what's changed in the industry, if anything, what's going to happen with consolidation and M&A opportunities and product strategy, geographic strategy. So I'm sort of -- I've been thinking beyond the restart personally on this because I think we'll get back up and start it again. So I think to answer your question, the -- we're going to see what happens. The difficulty might be and the restart is going to be out of Mexico, but there's ongoing discussions, and hopefully, that can support production as far as the -- how fast will people come up, most -- I'm not going to speak for the car companies. We've been in touch them, obviously. Most plants are going to come up on 1 shift, a little bit of a slow start, get everybody used to the protocols, training. I think that we'll probably get up to speed and production relatively quickly. Everybody is coming up at once, which will be a challenge. But every production plant knows who their suppliers are, knows who their customers are and have been preparing for this for a couple of months. So I'm sure there'll be some hiccups. So I think we'll hopefully get started relatively well.

And Don, maybe to follow up on that. The industry, and I guess your Steyr plant really is kind of indicative of this. On the restart is focused on very high-profit vehicles for the automakers as well as for the whole value chain. As you're seeing schedules develop here, I mean is that consistent with what you're seeing in the near term? And then maybe as we get beyond the next couple of months, could this potentially sort of instill a discipline to focus more on these higher-trim levels, higher-profit vehicles, where volumes might stay a little bit muted and not get back to where they were before, but we have this much richer mix that offsets that lower volume?

Yes. I think that's a question to ask the car companies individually, but we have had those discussions. So what I'm hearing is -- and not surprisingly, is the car companies want to get the plants up and running first where they have the best profit margins and they have the most orders and where they've got low inventory. So to the extent they're going to -- they have already kind of prioritized. You can see which plants they're pushing first and getting their shift, the shift that's the quickest and which ones are going to delay a little bit more. So that's -- you'd expect that. As far as the mix, I don't know what they're going to do. I suspect they've got enough orders now. They'll be building to orders, but that again -- that's been dependent on their product line. I think part of the big push we've been having with -- in Europe as well as North America is the dealership network needs to get up and running just as quickly as the manufacturing plant. So there's been a big push with the governing bodies to say, how do you get the dealerships. And I think for the most part, that's recognized by the governments that they can't keep paying people to do nothing. They follow up from this. We're trying to analyze that. We're running the scenarios. But I think the governments are also saying, we need to get the dealership started. That will build the order book, and I'm sure they'll build to the order book. So that seems to be happening concurrently, and I think we're going to be a lot smarter, quite frankly, in another month, 2 months as to what the real volumes will be and whether there's enough demand that the -- some of the car companies are already saying, "Look, we're anticipating that we're going to not even shut down over the summer shutdowns because we're going to have enough demand to continue to build." So we'll see, but that's -- it seems encouraging so far, but to the -- once the data comes out.

Yes. It definitely seems like there's a little bit of inventory shortages developing already. So that's -- that's a real -- seem like a real positive. Maybe thinking about the first quarter, I mean there was really great outgrowth versus the industry global volumes. I think your sales were down about 18%, production was down about 27%. So that was a huge outgrowth. I'm just curious how much of that do you think was a function of mix? How much of that is sustainable? I mean you guys have been outgrowing the market for a very long time, but don't seem to get credit for it. So I'm just trying to understand how much of this may be sticky or might be transitory?

John, it's Vince. I think when you look at what happened in production in the quarter. Globally, volumes were down 27%. We reported sales down 18%. So you kind of -- from a headline perspective, you say, well, that's a big outperformance. I think you've got to sort of slice and dice a little bit differently. I think you have to take into account where we're actually producing on a weighted average -- weighted production growth, the way we calculate the numbers, production was down about 16%. Our sales on an organic basis -- because remember, we disposed of our FP&C group back in the first quarter of 2019. So if you adjust for that and adjust for FX, organically, our sales were down 14%. So we did outperform by 2%. But when you look at the various segments, some of the outperformance actually stands out a little bit better. Our Power & Vision group performed on weighted average basis about 11%. And that's all due to continued launches. Seating outperformed 3%. And our Body Exteriors & Structures group outperformed 2%. Our Magna Steyr business, by the way, it was down quite a bit, and it's just based on the programs that it has. Certainly, the [indiscernible] program did quite well. But when you look at the BMW 5 series and the [ DLR ] programs, volumes were down. So at Steyr, the numbers were pretty good with some pretty good outperformance, which -- John, it's something we've been doing for quite some time. Even in our largest group, Body Exteriors & Structures, we've consistently outperformed the market sort of year after -- year-over-year. Now it could be lumpy because it could be a period where there are a lot of new programs that are launching and our content is not necessarily going up because it will be programs. But over a period of time, we've consistently pretty well outperformed the market.

Okay. And then also maybe thinking about the near term, we're getting a lot of questions on decremental margins in the second quarter. And given that a lot of the pressure on production is going to come in North America and Europe has and continues to come in North America and Europe, 2 bigger markets for you, then in China. I'm just curious how you think about that. If there's anything that you're doing is sort of temporarily rightsizing the cost structure or if there are things that you're kind of -- that are opportunities that are availing themselves that may be a little bit stickier over time?

Well, the things we're doing, John, and a lot of it is driven right from the plan with our decentralized operating system and our plants and group managers being compensated based on bottom line results. They're taking immediate action. So they're obviously looking at labor costs. They're looking at discretionary expenditures. They're looking at capital, and how much of that could be pushed off -- pushed away. That kind of add it all up, and that's kind of what happens at the Magna level. Certainly, there's some focus at the corporate office with discretionary expenditures and capital as well. But I wouldn't say that we've actually gone out and done things from a structural perspective to say we're reducing -- we're reorganizing where our plants are or taking a significant cut in terms of structural fixed cost. It's more just nickels here and dimes there and dollars everywhere that adds up. Now can I look at Q1? I was obviously not pleased with the result. COVID-19 had a significant impact on sales of about $1.1 billion. But if I back out the impact of COVID-19 on the results for Q1, they were actually pretty good. And for the first couple of months, where we weren't really impacted by COVID-19 in North America and Europe, we were slightly ahead of where we thought we were going to be. So it was starting out to be a pretty good year. And as we look for the balance of 2020, we'll continue to rely on our plants and group people to do the things they continuously do and watch how they invest and how they spend money.

Okay. But I mean as we think about your decrementals in the quarter, and then maybe incrementals on the recovery, I mean what -- is there a range that we should be thinking about? Is it sort of 20% or 30%, and there's obviously going to be puts and takes. I mean just curious like if there is a -- if there's outperformance on the downside, there might be lesser performance on the upside or vice versa. I mean should we think about this as sort of a normal -- sort of a normal curve on decrementals to the downside and then hopefully back to the upside in the third and fourth quarter. And is that a more simple way to think about it?

Yes. Well, so John, when we gave some guidance on where we thought decrementals would be for the full year and kind of the low 20s, we were at 23% in Q1. How we came up with that number? It was not a bottoms-up business plan. Unfortunately, we didn't have the time to go around and do that. So we did have some scenario analysis and different models at the corporate office. We backtested it to our prior experience, and we also backtested it to Q1. So it's kind of the low 20s. And it's a combination of different models that we have, and our models assume different production start-ups in North America and Europe. So generally, as we move into Q3, Q4, you'll start to see as volumes -- our expectations, volumes start to pick up, and we'll see some improvements. But I think it kind of looked at the whole year and saying we're probably in the low 20s. We had 23% in Q1. So the model is based on that. But how it's going to appear quarterly will be lumpy depending on where production sort of comes on in the quarter, particular quarter, and in what region and business and Magna Steyr, too, right? It will have an impact on reported decrementals or reported incremental margins if you're looking at quarter-to-quarter.

Okay. And then as you think about the product launches both at Magna and then also at your customers, it appears there may be been some delays just because of timing and shutdowns. But I mean are you seeing that? Or is there anything else that's going on in product launches beyond just a 2- to 3-month delay as a result of the shutdowns?

I haven't. There -- they -- I haven't heard from every customer. A number of our customers have been pretty good at saying this program is delayed. This one might be pushed out. Many of them -- depending on what the delay would be, a lot of the engineering has continued. In some case, where you have to do some physical testing, that was not able to be done. So I don't think there's anything unusual that would push it out more than a couple of months, unless it was going to happen anyway. And we have a pretty good idea based on how programs are being engineered and tested and supply and whether things will be delayed. But I don't think those are necessarily because of the virus. I think for the most part, you're going to see a few monthly. And I don't know. I must say consciously make a decision to delay something to preserve cash. And we've heard of a couple of those, but those are more -- usually further out more into like the latter part of '21, '22.

Got it. I think Doug Karson is on. He just want to ask a question on the balance sheet or credit analysts. Doug are you there?

Yes. I'm here. It appears your liquidity levels are certainly sufficient to deal with the crisis, but one can never be too safe. We've seen many suppliers that are smaller with less capacity issue debt, you're trying to build up liquidity. So I guess the first question is, how do you feel about the liquidity? Do you think the market presents any opportunity to add liquidity? And over the longer term, kind of related to that, you've always had low leverage, but wanted to discuss the capital structure and ideal leverage target levels.

Yes. So it's Vince. Let me start off, and I don't know if Don and Louis will want to add in some color afterwards. We've been pretty thoughtful in terms of our leverage ratio in the organization. And we've talked -- always talked about adjusted debt-to-adjusted EBITDA kind of 1:1.5. Again, when I say that, I talk about a normal-type period. I don't think 2020 is a normal-type period. So we're going to exceed the top end of that target leverage ratio this year, which come back in '21 and thereafter. And what -- the reason we chose the 1:1.5, as we're looking at credit ratings, and we always wanted to have a credit rating that would give us access to the debt markets for opportunities as they rose or in times where things look more challenging from an economic macro perspective. And none of that has changed. So as you look at kind of our liquidity position to date, even going forward, again, I think our targets remain where they are. We did move up our revolver by about $700 million just after the quarter. And we did that, and there was 2 thoughts. One is, if you put your conservative financial hat on, I'd rather have the liquidity but not have the liquidity. The cost of having that liquidity is pretty insignificant. But the other side of it is, I think there's going to be some opportunities for us. So having that liquidity will allow us access to capital on a very timely basis if we choose to access capital. The other thing we've done from a liquidity perspective is file a shelf prospectus to raise up to $2 billion of debt. That was recently approved by the regulators. So I guess we could access that at any time, subject to market conditions. And that was put in place -- we started working on this prior to COVID-19, and it was to replace a shelf perspective that had expired for $2 billion. And the reason we were thinking of putting it in place and we have them now is to give us flexibility if we wanted to raise debt for opportunities or as EBITDA grew and we want to maintain that leverage ratio, our debt levels would grow. So it just gave us some flexibility. So as I look at the market today, do we want to go out in the market and raise the debt? I don't know. Rates are -- the market has been pretty choppy. Rate sometimes have gone up; 3, 4 weeks ago was really up. It's come down to more reasonable levels now. It's something we reassess. And whether we do something or not at this point is not determined.

Great. That's a helpful framework. I'll pass it back over to John.

Yes. Maybe, Vince, to follow-up on this, and this might be a question for Don as well. I mean when you look at this, you mean it kind of indicated and you having a past that you have some willingness to take on leverage to take advantage of strategic options as they may avail themselves and in crisis like this, they tend to avail themselves sometimes more. I'm just curious what you think you would consider sort of the priorities of what you'd go after. I'm not sure you can speak about maybe parts of the vehicle or other ways to kind of think about what you would consider going after? And then maybe in the context of that, how you think about that acquisition opportunity versus share repurchases and dividends, which have become slightly dirty words in the current environment. So I'm not sure they get pushed further down in the thought process than they maybe have before. But really, as you look at sort of strategically where the M&A opportunities are, maybe parts of the car scale versus technology, just curious how you think about that and then the other 2 legs of capital allocation, share purchases and dividends?

So John, let me start, Don. I'll start off with the financial part, where you can come in, in terms of overall strategy. John, our strategy hasn't changed in terms of capital structure. Obviously, we have these leverage ratios, and the right opportunities come along. We've always talked about we could move those leverage ratios up for a short period of time. We've talked to the credit agencies about that. So everyone knows what our overall strategy is. But if we're in those leverage ratios, our #1 priority is to invest in the business, whether that's organic or -- and/or through M&A. And we do want to pay a dividend and one that can grow over time and one that we maintain even in some tougher times. And then the way we've always thought about share buybacks is that if you do all that above and you're still within your leverage ratio, then you could use some of that liquidity to buy back stock. So we always used to buying back stock sort of at the bottom after we've done the first 3 things on the list there. And then kind of where you are in that, how much stock you buy back really depends on where you are in your leverage ratio. So the macroeconomic environment is very strong and stable and the stock price might be at the lower end, in our view, we're probably more inclined to move it up to the 1.5x. But if you're coming into a situation where there's some uncertainty in the marketplace or we think the stock is more appropriately valued, we'd probably be at the lower end of that range. And that's kind of the factors we take into account. So as we look at this quarter. And Don and I went to the Board with a recommendation. And in our view was the macroeconomic conditions are top, stocks really cheap. But we want to continue to invest in the business. We want to -- we'd like to continue to pay the dividend, but we're going to suspend the buyback for now. So that was our thinking and our strategy. Don, I don't know if you want to talk about kind of what we -- what our thinking is on the M&A front?

Yes. So I think first thing to look at is what changes because of the virus, if anything? I don't think the push on sustainability in our industry by the general public, by governments is going to change. Penetration rates may change a little bit depending on things like fleet averages and North America may change. The fuel is lower, but we are looking at our view as to what -- and we've been public about this, what's our penetration expectations for EV by geographic area in, say, by 2020, 2030 -- 2025, 2030, the same thing for ADAS. So I think the -- our view is EV penetration probably doesn't change too much. I think China wants to do it for a couple of reasons. Part of it is strategic. I don't think it changes too much in Europe. It will be interesting to see what the governments do for subsidies to try and get the industry back, again, whether they're going to say, well, it's only EVs or whether it's other -- any type of mobility where they pay money to get clunkers off the road for [indiscernible] So we'll see. In North America, there's a number of levers that typically drive EV sales. Car companies don't make a lot of money off it. The end consumers usually buy what they think is the best value. Some people do it for environmental reasons. So if they look at payback and their charging infrastructure, [indiscernible] cost to government money. Well, they still want to give subsidies. They're already spending an incredible amount of monies to the virus. So they want to lose the taxes. So there's going to be a lot of different things. But based on our view as to what happened with the EV penetration, we don't think level 4 and level 5 spending is going to continue as anywhere near as much as it has been with the car companies. I was already thinking that was kind of a waste of money. I was -- I think there should be more cooperation, consolidation, but we do think ADAS level 2 plus was still going to be a pull from the end consumer. So we'll look -- we've looked at our product strategy, we continue to look at it. If we were going to do an acquisition, we'd probably be doing it in an area where we're already in. Are they getting new technologies or additional things that we think we need? Whether it's different customers, different footprint, but it's usually technology driven. The other thing we've been looking at is what changes in mobility going forward? Will things like micro mobility, will that be different based on people's choices? What's going to happen with ridesharing? I think the transportation of goods and people are used to buying things and getting them shipped to the doors. So that's going to be a great opportunity probably for driverless applications. We made an investment with Waymo for some strategic reasons, but we were looking at that. What's going to happen? Is there opportunities for monetization of data? So I guess to answer your question, when we make an acquisition, if it's the right acquisition, if we -- I think there's going to be opportunities. I think this whole situation is going to potentially -- it's going to increase cooperation of the OEMs and maybe some consolidation. I think it's going to increase the probably outsourcing because the car companies want to preserve their cash. And I think it's going to accelerate consolidation of the supply industry. So we're going to be -- we'll look at where the opportunities, how to fit strategically and how to compare that to. And once we get through this, where is our stock price, is it better value to buy back their stock or some combination. So that's kind of way I'm looking at it.

That's incredibly helpful. And Don, maybe a follow-up on that was really kind of leading into the next question is, I mean you just mentioned you think there might be more outsourcing by the automakers. And obviously, that would create opportunities for you and economies of scale for the industry. So everybody could win on that front. Yet some of these advanced technologies, like you kind of mentioned, the automakers are spending a lot on them as well internally. So I'm just trying to understand, as you think about the vehicle from top to bottom because you have a lot of opportunities within it, really kind of across the board, are there specific areas where you think this outsourcing would occur? I mean AV and EV technology would make sense, but they see hellbent on keeping that in-house, but maybe they would outsource more structures and seating and other power -- sort of legacy powertrain business. I mean how do you kind of balance that? And in the discussions with the automakers, particularly around this, massive duplicative spending on Level 4, 5 AV and even level 1 and 2 for that matter, do you really think they're going to get more religion in the near term and outsource more of that? And it's kind of an open-ended question. But I mean, really how effective do you think is outsourcing or how far you think outsourcing will go and like where were the biggest opportunities be, I guess, is a simple way to ask it.

I think it depends on who -- what company we're talking about? What's the ownership structure? What country they're in? How strong in the unions, et cetera, et cetera? But I think if anybody is doing things, it's not going to make them more competitive than their competition long term and lose market share. It's as simple as that. Whether there's pressure to keep employees. I wouldn't be surprised if there's a bit more focus on trying to speed up the restructuring in the car companies. I mean they're going through a tough time, all of them are. They're going to need to, say, prioritize where they're spending their money. If they can get products outside from the supply base, so they have a lot of leverage on. We have to be competitive. I think they're going to increase that. I wouldn't expect in-sourcing in the traditional areas. I'd be surprised if anybody does that. So body structures, exteriors, things like that, if anything, that probably moves out more because they're spending capital, they can get that from the supply base. The -- I think the expenditures from an engineering and testing and validation on things like ADAS, I'm surprised it hasn't already happened. But there should be more cooperation. We started seeing that in the last 12 months. I think that's going to accelerate it. Like why do you have to have 8 different car companies all come up with a slightly different LiDAR, slightly different specifications tested differently, it's insanity. So I think we're going to see a lot more cooperation. The volumes will go up. The piece price comes down. It's not a vehicle differentiator anyway. It's how they utilize it. I also think I'm surprised at how much money are going to be spending on level 4, level 5, because I don't think the end consumer is going to be driving it because it's too expensive, not in the next 10 years. And if you look at the money they're spending to, say, well, they prioritize it somewhere else. So the one area you asked about is, they may want to do more engineering because they may want to control it, differentiates the vehicle, but I don't think from a production standpoint in areas like ADAS they're going to in-source anything. They don't have the volumes. In the area of EV, you probably see we're debating now -- and car companies may have a bit of a hybrid. They may say we're going to in-source or produce 50% of it. But we're going to outsource to other areas. We want to make sure we're competitive. They want to use -- they want to support their employees. But if they have to pay more money for it long term, then it'll be interesting to see what they do. So we're very careful when we quote, "Are they going to in-source? Are they going to outsource? What's the volume going to be? Are they leveraging the volume with other customers?" A lot of that's going on right now. I think it's too early to tell. But I think if you look -- if you look back in 5 years and say, what happened? I think you're going to see more cooperation of the OEMs, more consolidation at the supply base and more intelligent spending where you can get return on your investment rather than everybody going after market share in every region in the world. And we've already seen some of that, and I think that's going to be accelerated.

It sounds like the market is moving towards you guys in a faster way than I think most people realize. And maybe just a last question. As you think about technology and scale, where do you think the kind of crossover point is as you think about the technology needing to be scaled? And I know it's kind of a theoretical question, Don. But I mean, obviously, in the first few years of a new technology, anybody can -- not anybody, but a lot of companies can earn excess economic profits. But at some point, in year 3 to 5, scale becomes wildly important. I mean how do you think about that transition? And do you think that is one of your -- I mean on top of the technology you deliver with that ability to take technology and scale, it just puts you -- how do you think that enhances your competitive position?

Well, I think supply and demand is supply and demand. The -- in most of our product areas, we've got 2, 3, 4 good large suppliers. I think maybe what a way to look at it is if you're -- we don't have a strong balance sheet. If you're not really good at manufacturing and good quality, excellent launch, you're not global, you can't support global platforms, you don't have the R&D capability. Then I didn't take a rocket scientist to figure out unless you've got some unique technology or really low-cost base for some reason, that you're -- it's going to be hard to continue to grow with a global industry. So I think you'd almost have to look at a parts company and say, "Okay, you can be big, but are you -- do you have critical mass in the product areas you're offering." So Magna has say 10 big product areas. We look at those and say, "Do we need to be global? Are we global? Do we have the right technologies, et cetera, et cetera?" So we have a whole criteria to look at that, and that kind of drives our capital allocation and our M&A. But I think the trends are going to continue. We're also trying to understand what's going to happen with the current situation to trade for interest rates? What's going to happen to currencies? Things like that because that can help drive where we should be from a geographic standpoint. I think we are already into the point where people are seeing -- let's try and source more where they're building vehicles. I think this whole USMCA will probably drive more sourcing in North America. And we got to understand the regional value content and the labor value content, and those details are coming out. But I think that will actually play in our favor because we're the biggest supplier in North America by quite a long shot. But we're looking at all of these things, and they all continue to move. But at the end of the day, I've always said we need to be focused on world-class manufacturing because if we're not competitive and we're not developing the best technologies, your margins get squeezed. If you're the most competitive and you got good technology, then we can command better margins, and we're helping solve problems for our customers. So going forward, I think there are some things going to change in the world. We're trying to track them, but the fundamentals and the basics don't change that much. I've been with Magna over 30 years now, and we've been through a couple of downturns, and need to have the best people. One of the things we're not doing in this situation is cutting our -- our good technical people because they're the ones that will make or break us going forward. And I'm not sure if I answered your question or not, but I think...

I think that's a fantastic wrap-up to the session. We're just 30 seconds left. So we very much appreciate the time that you guys have given us today as well as time you've given investors in the one-on-one. So thank you very much Don, Vince and Louis. We really appreciate the time. Thank you so much.

Thanks, everybody.

Thanks.

Thanks.