Hello everyone. Thank you for joining us today.

We always look forward to talking with our shareholders and we hope to inform you well and answer questions. We also note that we have many other stakeholders, including many employees on the call and our remarks are addressed to them as well as we disseminate our results and commentary through our network.

With me are Pat D’Eramo, Martinrea’s CEO and President; and our Chief Financial Officer, Fred Di Tosto. Today, we will be discussing Martinrea’s results for the quarter ended September 30, 2021.

I refer you to our usual disclaimer, in our press release and filed documents. A few general comments from me at the outset to set the context, Pat and Fred will echo some similar thoughts and provide more context and then we will finish up with some Q&A.

First, we don't like seeing a loss for the quarter. We are shareholders too, and we don't get bonused when we lose money, largely because of the chip and other shortages, inflationary trends, higher labor and commodity costs, higher energy costs and efficiency costs that occur when customers shut down.

The third quarter was significantly worse than our second quarter. Launch costs, by the way are expected and okay.

They were different kinds of cost, of course. Fred will go through cost issues in more detail.

Q3 kind of sucked. Having said that, we anticipate Q4 will be somewhat better.

It should suck less, with improvements in 2022, leading to a robust 2023 and beyond. More specifically, we don't have a demand problem here.

Sales volumes are down because of lack of supply. Demand, we recall was robust heading into the year and will be, we anticipate for years, we were at the beginning we believe of a strong multi-year cycle, especially in North America where we have most of our operations.

Not only will demand be high, but it is going to be a long time before production levels, we'll see inventories built up to normal levels. Our view on demand is buttressed by many economic indicators on growth and stimulus.

But let me give one stat that shows the power, the purchasing power of consumers and likely pent-up demand. In Canada, pre-pandemic, Canadians held approximately $40 billion in their savings accounts.

Today, that number is something like $310 billion, in the U.S. the savings number is like $4 trillion to $5 trillion.

In addition, people's holdings of real estate and stocks have appreciated overall and all this portends well for the economy for growth and for auto purchases. Let us recall that autos are a depreciating asset.

Over time, people both need and want to replace vehicles and there's pent up demand to do so. Many are holding on to vehicles, they want to replace when they have supply and choice, and hopefully some cheaper prices.

We have just finished our board approved budgets, which support our targets in 2023 of $4.6 billion to $4.8 billion in revenues, a greater than 8% operating margin and $200 million plus of free cash flow, unless we have another pandemic or supply shortages extending beyond consensus predictions. 2024 looks better than 2023.

Our budgets don't go out further than that. The value proposition remains intact.

There's a lot of value in our company. Indeed, from a value perspective, I think our value is likely increasing or has increased.

Over the past year, we have seen the value of our non-automotive assets increase. We hold a fair bit of real estate, for example, and are considering some sale leaseback activity.

For example, our newly acquired Mexican plant from the Metalsa acquisition has a value we understand of approximately US$36 million, with a cost base much lower than that. Separately, we outlined for you today in a separate news release, our Martinrea innovation development initiative, which we have been working on for awhile, and which we outlined to you in part on our Q3 call last year.

We are a company focused on innovation and development. In that context, we have made three equity investments over the past few years, NanoXplore, the graphene company where we are the largest shareholder.

VoltaXplore, the graphene enhanced battery initiative, where we are in a 50/50 JV with NanoXplore and AlumaPower, an aluminum-air battery initiative, where we were an early stage investor. In each of these areas, we do more than invest money.

We provide much more than that, our expertise in people, for example, but from an equity perspective, we are up over $200 million based on markets and equity raise values since the beginning of the pandemic. In some, despite the chip shortages and the quarterly loss, our net present value and equity value have been increasing in a real sense.

Indeed, our company is seeing the same experience in a way as a lot of individuals in the pandemic. Income has been hit to a degree, long-term prospects remain good.

Real estate value has gone up and our equity portfolio has gone up. I think we're undervalued.

And over time, I’m bullish that as the supply shortages lessen. We will see our equity value increased to meet intrinsic value.

With that, I will turn it over to Pat.

Thanks Rob. Hello, everyone.

As noted in our press release, we generated the adjusted net loss per share of $0.21 and our adjusted operating loss of $0.16 million in Q3. This was on production sales of $797 million, which is down 15% year-over-year as chips and other supply shortages continue to weigh on our industry volumes.

While we didn't provide guidance for Q3, given the uncertainty in the industry, results ended up being worse than what we had contemplated at the time of our last call. The drag on results has four components, volume reductions, mix, launch costs, and most notable, the inflation of wages, materials, and energy that are weighing negatively.

Wage inflation is more of an issue in the U.S. and Canada while material and energy costs are having a wider global impact.

Compounding the issue is the recent practice of holding labor implants for scheduled production from our customers who then call off the schedule at the last minute, based on a diminished line of sight from their supply chain and normal times when customers call off production, there is time to flex labor. However, the labor market is hot.

So if you lay people off, even short-term, there's a good chance to land another job and not return. In order to protect the customer, the supply base in many cases is not flexing labor due to the probability of not having enough people to support the customer on production resumes.

This issue with heaviest implants with new model launches, new launches mean high investments in training team members is important to hold on to these new trained team members to ensure a high quality product. The difficulty is the new program volumes are being inhibited due to the chip shortage.

Hence the plan volumes are not met and the revenue is not being generated to cover the costs of the additional people per the original plan. We expect this to be more of a short-term financial burden, which we are currently bearing to ensure we can successfully meet planned launch volumes.

Labor materials are always part of the product costs that our customers covered in the product price. In these unprecedented times, these costs have become disproportionate to the base.

Hence, we are having discussions with our customers to negotiate recovery of inflationary costs. We're working to do this in the right way.

So it will take time when it's all said and done, we expect to achieve some additional compensation for our products. Despite the current volatility in the market, we continue to work through a heavy new business launch cycle.

Our launch activity been especially high due to combination of delayed 2020 launches and scheduled 2021 launches getting compressed, these being some of the largest programs our company has launched in recent history. These compressed programs represent approximately $800 million in annual sales.

Key program launches include the Pathfinder and Rogue, the new Jeep Grand Cherokee and Grand Wagoneer, the Mustang Mach-E and Maverick, the Mercedes core EV platform and C-Class, the GM Silverado uplift at our Oshawa, Canada facility and the new [indiscernible] among others. At any given time, in any given year, we have launch activity and associated costs.

They have been abnormally high this past year, given the heavy launch schedule and a slower than planned ramp up as I mentioned earlier. Despite these short-term launch costs, these programs will ultimately drive strong sales growth and healthy margins in the years ahead.

The demand for vehicles is high. The inventory is almost non-existent and the outlook is still very good.

As we move into 2022 and 2023, our plant launch activity drops by nearly half, hence launch costs over the timeframe drop to a lower level, as well. As I indicated earlier, mix was also a significant issue this quarter.

We have spoken at length about some key programs that have undergone a number of shutdowns, such as the Chevrolet Equinox, GMC Terrain, and Ford Escape. And this pattern continued to impact this, this quarter.

It actually got worse on a relative basis, even GM, large pickup truck platform, our largest program, and the one that GM has favored in its allocation of chips was impacted during the third quarter. I do believe that we have reached the bottom and as we move forward over the next few quarters, we expect to see some incremental improvement in volumes.

This will not be a hockey stick. It will be gradual for a time.

And then later in 2022, we may see a faster rise. When the supply issues abate, we will likely see record production numbers and plants running at capacity across our operations.

As such, we still feel confident in our ability to meet the 2023 outlook that consistent of adjusted operating income margin, north of 8% and over $200 million in free cash flow. In the meantime, we continue to manage costs, protect the balance sheet and ensures the sustainability of our business well into the future.

Fred will have more to say on this in a moment. Taking a look at our operations, I just discussed at length, the chip shortage and how it's affected us across our operating regions to varying degrees, primarily in North America.

In Europe, we're making good progress as our ability to allocate resources in the plants to drive operating costs reduction has improved. This progress is currently being masked by supply chain related volume headwinds and cost inflation, in particular energy costs, which are up 60% this year in some regions.

We expect these efforts to translate into an improved bottom line result once production normalizes. Our Rest of World segment was impacted by lower volumes, again, as a result of the supply shortages as well as launch related costs incurred during the quarter.

This is not unusual given the small size of this segment, hence the impact of the result is more visible. Of course, we continue our lean journey and are taking advantage of the downtime where possible to improve the operation so that once the spigot is turned back on, we will be able to take full advantage of what will likely be a multi-year tailwind starting at some point in 2022, strengthening in 2023 and beyond.

I'm pleased to announce that we have been awarded $40 million in new business since our last call. This includes approximately $30 million from ZETF and $10 million from General Motors, both in our Propulsion Systems Group.

New business awards for 2021 to date are now about $200 million. A number of new programs that we’re expected to be awarded by the OEMs in 2021 are migrating into 2022.

There’s a school of thought that we may see some current production models get extended live from current planned and to production dates. Some reasons could include the demand for current product is high, inventory is low and there will be a desire to fill the empty cupboards quickly, along with meeting immediate demand, program launches inhibit short-term volume from assembly plants, which means lost sales.

There may be a desire to properly depreciate assets that were inhibited due to the lack of normal annual production rates this past year and newer model vehicles typically need more chips. In fact, EVs can demand 10x more chips than current ICE vehicles.

This is somewhat speculative. So extending vehicles given this unique situation could benefit some OEMs as well as suppliers.

In any case when supply chains returned to normal, Martinrea expects to be very busy. With the launches I discussed earlier, Martinrea has managed to fill our plants to historic levels, and we were anxious to harvest the fruits of our labor.

Now I wanted to take a moment and elaborate on Rob’s earlier comments on Martinrea innovation development, or what we call MiND. MiND was formally established earlier in 2021 that we’ve been working on it for some time.

This initiative is dedicated to incubating, developing and funding innovative technologies that can be directly applied to or in some cases supported by our own operations. MiND is led by Bruce Johnson, Executive Vice President.

Bruce has been with Martinrea for almost 15 years. And prior to his involvement with MiND, was Executive Vice President of our Lightweight Structures Group and the Head of our Metallics Steel Metal Forming Business Unit.

Bruce reports to me, but also works very closely with Rob Wildeboer. As Rob mentioned, we currently have three equity investments within MiND our 22% stake in NanoXplore, our VoltaXplore JV with NanoXplore and a minority equity position in AlumaPower, a private company that is developing an aluminum air battery technology for a variety of end markets, including automotive.

MiND is also evaluating a number of other initiatives, such as additive manufacturing, intelligent robotics and software to name a few. These initiatives may involve equity investments, but not necessarily.

Regardless, in each case Martinrea provides operational and strategic support to its partners, including manufacturing excellence, product development, supply chain support and other areas in order to advance exciting technologies that we believe can change the world we live in. From an investment standpoint, we’ve done well.

In fact, the value of our investments is multiplied more than five-fold, which demonstrates that we are adding value to our shareholders and areas that are strategic to our business. We’re excited about MiND and its potential, and we believe it will be a key differentiator for us as we move forward.

With that I’d like to thank the entire Martinrea team for their continued dedication and commitment and these challenging times. Challenging, but exciting nonetheless.

With that, I’ll pass it to Fred.

Thanks, Pat and good evening, everyone. As Pat noted, Q3 was challenging more so than anyone expected at the time of our last call.

The global semiconductor shortage and other supply chain issues as well as cost inflation and labor, material and other inputs are currently wreaking havoc on our industry and the supply base. Meanwhile, our product mix having new business launch cycle and a diminished ability to fully flex costs, driven by volume volatility and production lines being stopped and restarted unexpectedly based on OEM production priorities are compounding the challenges.

We don’t know exactly when these issues will get resolved. We know it we’ll get through it like we have gone through other challenges in our history.

And once we do, we know our future looks bright. This quarter, we thought we’d forgo the typical discussion of year-over-year financial performance.

As you think it’s more relevant to talk about the quarter-over-quarter variance from Q2 to Q3 to paint a picture, what impacted our business this quarter. Looking at our Q2 adjusted operating income of $39 million as a starting point, the impact of lower industry production volumes at a typical rate of flow through or normalized decremental margin represented a $12 million hit to adjusted operating income.

Next a negative sales mix, which we have discussed highlighting examples, such as the GM Equinox and Terrain, Ford Escape and GM pickup truck and larger SUV platforms combined with a weaker, labor cost absorption, given our diminished ability to fully flex costs in the current volatile environment resulted in a $25 million unfavorable impact to adjusted operating income. This was the biggest factor impacting results in the third quarter.

Ultimately, like most in our industry, including OEM customers, certain programs and product mean more to us than others from a margin and contribution perspective. With the various and ever changing puts and takes regarding production and production volumes during the quarter we came out of the quarter on the short end.

It was a perfect storm to some extent with lower margin product up during the quarter, while higher margin products were down resulting in this high and abnormal flow through effect. And all of this was being exaggerated by this complicated labor market, which has ultimately led to us carrying more costs than we otherwise would under normal circumstances.

The good news here is that when the volumes do come back to more normal levels in particular with our core customers, the mix factor should adjust. In addition, cost inflation on materials, labor, energy and other inputs as Pat discussed was another $7 million quarter-over-quarter impact, while launch related costs attracted another $6 million.

As Pat outlined earlier, our launch activity this year has been especially high, which will ultimately add to sales in the future but is damping margins in the moment. Lower COVID subsidies and some other items amounted to approximately $5 million made up the remainder of the quarter-over-quarter variance.

The accumulation of these factors resulted in an adjusted operating loss of $16 million for the quarter. The inflationary pressures Pat talked about are real and currently costing us approximately $40 million on an annualized basis.

A big impact, no matter how you slice it. Labor availability remains an issue, and we’ve had to adjust wages and select locations in response.

As Pat mentioned, we are engaging with essentially all our customers commercially and how to deal with these costs increases. Ultimately some of these costs will normalize, but some will likely stick.

So offsetting these cost headwinds is currently an area of focus for the organization. We’ve had some success here, and then we expect to have more going forward.

Turning to our balance sheet. Net debt increased quarter-over-quarter to $860 million in Q3.

Our net debt to adjusted EBITDA was 2.5x at the end of the quarter, an increase from approximately 1.8x last quarter, still below our covenant maximum of 3x. An increase in non-cash working capital, both production and tooling related has contributed to the increased debt levels.

Non-cash working capital was increased by approximately $120 million since the beginning of the year. The disruption caused by the global semiconductor shortage and specifically the short notice or low lead times you are getting on production releases from our customers and other material shortages is forcing us to carry a higher than normal level of inventory.

The pace of that increased fits though in the third quarter. Ultimately the elevated production inventory levels should averse over time as production volumes normalize.

We would like to see some level of rustle in the fourth quarter, depending on volumes and volatility. Should the chip shortage and corresponding lower and volatile production environment continue, which seems likely at this point.

There is a risk that company could be outside with its financial covenants at some point in the future. Given the pressures in the industry, we don’t think we’ll be alone in that regard.

In response and as a proactive measure, we initiated discussions with our lenders on an amendment to our covenant structure, similar to we did last year during the COVID shutdowns in order to provide the company with flexibility as we navigate our way through these challenging times. We are comfortable with our position in this regard.

Our banking relationships are strong and we are confident our lenders will be there for us if, and as required. They too see the current supply chain bottlenecks and overall challenging environment is temporary, given the strong demand for vehicles.

Turning to the longer-term. We remain as confident as ever in meeting our 2023 objectives, which calls for total sales, including tooling sales of $4.6 billion to $4.8 billion and adjusted operating income margin north of 8% and more than $200 million in free cash flow.

All consistent with our recently completed board-approved budgets as Rob noted. We are committed and motivated to achieve these targets and have skin in the game.

A few things to consider when looking at our long-term outlook. First, chip shortages and other supply chain issues should improve over the next year.

We don’t know exactly when, but we have seen some recent customer announcements indicating that things should get incrementally better, albeit, perhaps slowly. Second, while IHS recently cut its 2022 North American production forecast materially by 2 million units, the 2023 forecast not have changed much.

It actually went up. The industry is currently dealing with a supply issue with inventories at an all time low.

Meanwhile, the demand is as high as it’s been in years and is expected to remain high for several years once production normalizes. This is the assumption underpinning the longer-term forecast of IHS and others and few would argue to the contrary.

Third, while we were launching a substantial amount of new business this year, the cadence of our launches is expected to normalize in 2022, 2023 as Pat mentioned. With this should come a reduction of costs and better margins.

We also continue to execute on our lean journey, which should bring further margin enhancements. All told the potential to rebound historical margin levels or even exceed them remains, once production bottlenecks are worked out.

Finally, we continue to expect our capital spending to normalize to range approximately depreciation as a percentage of sales. Again, this too is consistent with our recently completed board-approved budgets.

The two main drivers continued to be second-generation programs and our flexible well lines, which require less capital than their first iteration and getting past their heavy investment cycle in aluminum. We’ve been winning a lot of business in recent years, and this has required investment.

But ultimately this is really good news given our strong return profile. In closing, it is clear that the industry is currently in some challenging and volatile times.

The good news here is that it is temporary. Once you get past these near-term supply challenges, we expect a multi-year period of rising production volume, sales, margins, free cash flow, and the arising stock price.

So we encourage all our investors to remain patient and to focus on the long-term. Our track record of delivering on our financial targets speaks for itself and we are confident that this will continue to be the case as we deliver on our 2023 outlook.

Thank you for your support. And with that and I turn it back over to Rob.

Thanks, Fred and Pat. And with that, we conclude our formal remarks.

Thank you for your attention this evening. Now it’s time for questions.

We see we have shareholders, analysts and competitors on the phone. So we may have to be a little careful with our answers, but we will answer what we can.

Thank you for calling.

Good evening. So maybe just to start on the call offs activity from the OEMs.

Are you seeing like clearly through Q3, they were dealing with some very unique situations they didn’t have visibility? Is that behavior improving at all as you track through Q4?

Well, our expectation, if you recall earlier in the year was it would get better by Q3 and it actually got worse. So far in Q4, we’ve seen some unexpected call offs, but the next – the thorough test will be this next month because some of the OEMs, GM in particular has announced their expectations for the month that all starts to grind up next week.

So, I think over the month of November we’ll really get a better judgment. But if you took a look at the deterioration at the end of Q3 versus how we’ve started off, I’d say we’ve started off better than we ended in Q3, but it’s still viable for lack of a better term.

And is there a way for the OEMs – I’m just asking the question like, can they pace the volumes more steady versus calling it off? Is that something that could take place to help you plan better?

Well, that’s a really good question because we’ve had those discussions. If you built the inventory, so to speak of chips, parts with chips and this isn’t as easy as I’m making it sound.

And sort of held off until you knew you had enough and then when you said I’m going to go, they go and they say, we’re going to go four weeks and then we’re going to run out again. Yes, that would be a lot easier because part of the problem is, you’re expecting to run Monday, it’s Thursday, you get a call in the evening or the next day and they’ve pulled the schedule.

By that time, what little plexing you can do is pretty much lost. So certainly if they had a method to say let’s build up enough chips and wait until we can really rock, yes, that would make a difference for the supply base certainly.

Okay. And then can you just talk a little bit about what’s the plan – what is the outlook for the plant in – the GM plant and Ingersoll and how you see things evolving at your all fields plant over the coming year?

Well, the plan in CAMI is to run one shift, I think for the rest of this year, there are plans to continue to run it the first quarter of next year. Of course, that’ll be chip dependent.

We’ll supply as we have, there is some new business we’ve won and put into all field. There is a potential to put some more in if we can make this space.

So it’s kind of an interesting dilemma that we have where we could possibly put some work in there if we can coordinate things with our customers. So the plant will be open regardless, but how many people work there could definitely be impacted depending on what GM does next quarter.

Okay. And maybe just one on the balance sheet.

So just a question regarding the dividend, I guess, with the balance sheet at 2.5x, and Fred you’re maybe talking about the risk of a breaches was the dividend put into a big conversation this quarter maintaining it?

No we kept our dividends going through Q2 last year. Well, we’ve got a strong balance sheet, strong value and we’ll maintain it.

So it was pretty easy discussion.

Okay. I’ll get back into queue.

Thanks.

Thank you. Good evening, everyone.

Fred, I really appreciate the color that you provided on the quarter-over-quarter breakdown and the one-time related costs or the elevated cost that you’re seeing. And you guys may have talked about this in the past, but I’m not too sure.

But in Europe, there is an inability to flex labor compared to here in North America. So just curious, was the impact proportional between your divisions between North America, Europe and the rest of the world?

Or was there one segment that saw higher elevated costs because of your inability to flex?

Yes. I think North America has been the region that has been impacted the most on chips and other headwinds as well.

And it is our largest segment. We did see some chip related shutdowns and headwinds in Europe as well.

But not to the extent the North America, so I would characterize the impact there as the less. At the same time, we’re making some progress there with our facility in Bergneustadt the facility that came with the Metallics acquisition.

So that improvements kind of be masked by some of these other costs and headwinds and so forth. But all in, North America was by far the biggest impact in the third quarter.

Just supplemental to that, I mean, everyone is trying to get labor everywhere, particularly in the United States and Canada. So you cannot simply lay people off.

They may not come back. And so the reality is and I think you’ve seen this on a macro level.

A lot of people have not re-entered the workforce in part, because they’ve been paid not to work for a long period of time. It kind of – people kind of get used to that a little bit.

And we’re seeing wage inflation in the United States, so we’re dealing with as well. So we train people, we have good people.

We want to keep them in the plant back to what Pat said, it’s easier do that type of labor flexing in North America when you know, what the production schedule is. And indeed last year in Q2, when we’re all shut down, it was actually in many ways, easier to deal with labor situation and labor costs then it is now and so in that sense that’s the reality that’s up there.

Okay, and then just thinking a little bit more long-term here. You guys noted that you’re speaking with your customers now to potentially get some price increases to offset some of those more permanent inflationary pressures, whether it’s labor.

But can you guys also find cost cutting initiatives? And if so, what does that look like?

Well, we certainly, while we’re down, so it’s kind of a double-edged sword. You can’t lay them off as Rob said, because you lose people.

But if you’re not running, you got to have something to do. So we do use people work on lean activity.

So when the schedule’s returned to normal, we’ll be able to go forward with less labor, scrap cost improvements, those types of things. We’ve also taking people and put them in our plants where we’re launching, where they could use an extra hand, that type of thing.

And then certainly the more you can progress on a launch, the quicker you can bring money to the bottom line. One of the inhibitors of the launch currently is that we’re not getting a steady launch schedule and that’s really critical.

But almost at every launch we’re having right now, we’re being inhibited by again, short call offs. So it’s made difficult.

And maybe just as a supplement to that. You recall last year Q3 we came out of basically a lockdown situation and we torqued up really quickly and we had a really profitable quarter.

So this can turn around really quickly. And last year we did a lot of that activity that Pat talked about.

This year, we’re doing the same thing.

And it’s important that when the OEMs are ready and they can provide steady production that we’re ready to. So we’re taking a hit right now by having to hold people and it’s not going to be sustainable forever by any means.

But being prepared for when the volumes go up is going to be key, because this could look like 2010 all over again, where they want to run every vehicle on every plant as much as they can because everything’s empty. And I would almost guarantee that it’s going to happen as long as there’s chips and other supply.

So we really – the industry really needs to be ready to provide parts at a very high production level.

Right. And I guess, asking the question a little bit more specifically, as it relates to numbers.

Would price increases be required to get to your 8% or is that something that you guys can do, which is finding efficiencies?

Well, I mean, in some cases you have to find a lot of efficiency, especially when it comes to material. Material is very basic in a product it always gets covered.

So, it makes sense that that we’ll look at covered, and we have a lot of competence that it will. Labor, you expect 2% to 3% labor raise increases every year, maybe more on a good year.

And you cover that with efficiency. So this is – you’re talking 20%, 25% labor increases, so that's a little bit more work.

Can we achieve the high margins with all of this? I'd say we're going to have to have some help, how much we really need to dig in and see, but over time we'll improve at the same time as well.

Okay. That's perfect.

I’ll hop back in the queue.

Thank you.

Fred, when you gave that roll forward from Q2 EBITDA to Q3 EBITDA, one of the reconciling items was $25 million. And was that the combination of sales mix and these labor issues you're referring to?

I just want to make sure I understand what the $25 million is?

Yes. It's a combination of both sales product mix, as well as some of these challenges we're having with labor and excess costs as it relates to that.

Okay. And what's the large, I'm just curious why you lump them together, like because they're not related, but what was the larger issue is a mix or labor?

Well, I'm not going to get into a little bit detail, I’m sure customers would like to know that. So I'll just leave it at that for now as that.

Okay. So you would have at least seen preliminary numbers for October.

Is October any better than what you experienced in Q3 or is it kind of more of the same?

I would say, October was better than probably September, but still some room to improve there. As Pat alluded to earlier, I think the key for the fourth quarter is to make sure that the General Motors falls through on their current production schedule.

That's going to be key, if you look at the OEM shut downs during the third quarter, and we've been tracking it since the beginning, GM was hit by far the most of Detroit 3 in particular. So if they scale up in the fourth quarter to some extent that'll definitely help.

And then November and December production schedule will be key to that.

Yes. And then Pat, you referred to the GM truck program in Oshawa.

What exactly is GM doing on the truck in Oshawa and what have you got on the truck there?

Well, if you recall, I don't remember, it was a couple of years ago. GM announced that they're going to start building Silverados in Oshawa.

I can't sit here and remember the volume. Do you remember?

Let’s put a 100,000…

100,000 or so a year, maybe it's more, but any way we provide the same parts on the truck in Oshawa as we do in the U.S. and Mexico.

So it takes some additional capacity which now we're putting in the Canadian plant and then other parts will come from other places in North America.

Okay.

It's a volume move on GM's part, they see a need for more volumes. So they decided to put it back in the Oshawa plant.

Right. Okay.

Good for us. We're excited about it.

Okay. And then just lastly, this program, you're awarded what – from ZETF, what are you doing for ZETF?

Transmissions, ZETF is a big transmission providers for just about every automaker around the world. And it's one of their main transmission cases, it's volume up.

So this is the aluminum.

Yes. This is aluminum, correct.

You're doing large customer for us.

You're doing the aluminum case?

Correct.

Yes. Okay.

Got it. Okay.

Thank you.

Thank you.

Hi. Good evening.

I just have one question. Can you hear me?

Yes. Hello?

Yes. My one question is just in with regards to the 2023 guidance in maintaining the 2023 guidance, I'm assuming and if you could share sort of, if there are any numbers to be shared, like what is base – what do you base your confidence about 2023 on, and is it feedback from OEMs, some internal estimates or is it – I'm assuming it's not just what they call escalation of commitment?

As it relates to 2023, I think you're asking about potentially what volume environment we're assuming. So we essentially project the budget based on IHS and HIS, calling through a fairly robust 2023 volume environment.

I think their numbers right now is north of $17 million for 2023 and probably higher in 2024. So they're anticipating that the supply chain bottlenecks will be behind us by the end of 2022 and then 2023 should be a very strong year of volume.

So our outlook is predicated on that.

Just to give a sense of the IHS volumes in the auto news last week, or earlier this week. They posted what they anticipated were going to be volumes for 2023, 2024, 2025, 2026, 2027.

Each of those numbers was above $17 million and that would be robust long period term. And then we look at that and we say, okay, why is that going to happen because there's a lot of buying activity.

And also with respect to the rebuild of inventory, it's not going to come very fast. Because inventories are very low, we lost – don't forget almost three months of production last year.

So there’s 3 million plus vehicles. It's very hard to catch up when you're pretty well at full production as OEMs and demand is high.

So we're going to see a number of tailwinds and it's almost not quite analogous, but it's almost like vehicles that aren't made and sold today are going to be made and sold and added to what's going to be done in the next five years. And so that's a very good position to be as a supplier.

Got you. Okay.

That's perfect. Thank you.

Thank you.

Hey Fred, you talked about the Metalsa plant in Mexico, the real estate opportunity there. Can you give some insight into what the entire Martinrea real estate portfolio looks like?

We haven't necessarily done a full in depth analysis in that, but needless to say we've looked at some properties as potential opportunity. We haven't decided what we're going to do there yet, but clearly there's quite a bit of value sitting out there just based on the work that we've done so far on that matter.

I think to give you a broad sense, I don't know the exact number, but we probably rent about half our real estate and own about the other half, approximately some of them – some of the real estates not in necessarily great areas for value, but some is really good. And if you go back to Metalsa transaction, I mean, we paid $18 million for the whole business.

It's nice to have a real estate asset worth $36 million.

Yes, quite frankly when we did that acquisition. I mean, we kind of figured there'd be some value with the real estate, but it's actually gone up quite a bit since then.

So we've actually done well from that perspective.

We saw that appraisal, we were smiling.

And just in terms of the capital commitments, your near-term CapEx. Is there any ability that you have to scale back on any of the capital?

Are you fully committed to such spending at this time?

At this point in time, it’s just a book. Majority of it is program capital.

And throughout this semiconductor situation, OEMs have continued to work on their new program cadence normal course, so they're not slowing down and they're expecting supply base not to slow down as well. So we have some ability to defer and delay in some areas, but for the most part, it's big and at the core of our sales projections as well.

Yes. As Pat said, you put all this together, it's like $800 million in annual business, which is huge.

It's the size of a lot of companies.

Sorry, you may have said this, but what's the CapEx number for this year. It should be what?

It's going to be about $325 million give or take that's been…

Okay. Okay.

Thanks for taking the questions.

No problem.

Well, thank you very much for all your attendances this evening. If you have any further questions or would like to discuss any issues concerning this, please feel free to contact us at the number in the press release.

Thanks very much. Have a great evening.

Good night everybody.