Superior Industries International, Inc.

Steven Borick - Chairman, President and CEO Bud Fanelli - VP and Corporate Controller Mike O'Rourke - EVP of Sales and Administration

Matt Maschon David Leiker Rob Hinchliffe Chris Ceraso Ravi Ranjan Rahul Shah Adam Comora Brett Hoselton Jeff Linroth Mark Close

Good morning. In spite of the fact that we have a tumultuous market this morning, Superior is on the upside with good earnings results.

We have liquidity in the bank and we don't have any debt on our books. These are all good positive things for this morning.

I'm proud of the results in this most difficult environment. I wanted to just open up by saying that we have a new member of our team on board.

Her name is Erika Turner. She is our new Chief Financial Officer and we all welcome her to the team of Superior.

You will find as we go through this call today and in my meetings in New York next week that one of the nice major theme points for me is that I have a senior leadership team that is intact, very positive, and we are very excited about the prospects for Superior moving forward. In spite of the negative commentaries about the OEM business and the difficulties that we have encountered, I feel very, very positive about where Superior is heading.

And when you look at the entire automotive sector and the supply base with our pristine balance sheet, our larger cash position, our positive cash flow for this year and the turnaround in results from '06, we are on track to continue to move forward in a very positive manner. As I said many times before, we feel as though we are one of the last man standing, and we continue to take that strong position.

And we will continue to prove that we have the ability to move this company in the right direction for the future. With that, I'd like to turn the program over to Mr.

Fanelli. At this point in time, as Erika is so new at the game that we're going to let Mr.

Fanelli continue his role. I also want thank him for his tenure as the Interim Chief Financial Officer while we searched for a new position, and Bud, turning it over to you.

Thanks. Any comments made in this webcast are subject to the Safe Harbor for forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995.

Actual results could differ materially because of issues and uncertainties that need to be considered in evaluating our financial outlook. We assume no obligation to update publicly any forward-looking statements.

Issues and uncertainties that are of particular significance at this time relate to global competitive pricing, customer schedule volatility, potential declines in the production of cars and light trucks, and the successful completion of our strategic and operating plans. Please refer to the company's annual report on Form 10-K for a complete write-up on forward-looking statements and risk factors.

This morning we reported net income from continuing operations for the fourth quarter of 2007 of $5.8 million or $0.22 per diluted share compared to a net loss from continuing operations in 2006 of $5 million or $0.19 per diluted share. The fourth quarter of 2006 also included a net loss from the discontinued suspension components business of approximately $400,000 or $0.01 per diluted share.

Accordingly, the net loss in 2006 was $0.20 per diluted share compared to the net income of $0.22 per diluted share in 2007. For the year 2007, net income was $10.3 million or $0.39 per diluted share compared to a net loss of $11.6 million or $0.43 per share.

The major factor contributing to the increased profitability in 2007 was a significant improvement and overall gross profit. As indicated in the earnings release, the income tax expense in the 2006 fourth quarter and annual period were increased by $569,000 or $0.02 per diluted share and $2.3 million or $0.08 per diluted share respectively.

These adjustments were necessary to correct our deferred tax liability related to the recognition of fixed asset depreciation timing differences for book and income tax purpose. Gross profit in the fourth quarter of 2007 was $11.5 million or 5.0% of net sales.

Gross profit a year ago was negative $900,000 or 0.4% on net sales, which included startup costs totaling $3.3 million related to pre-production activities for our third wheel plant in Mexico. Excluding this amount, the 2006 gross profit percentage was 1.1%.

The improved gross margin in 2007 was accomplished with only a 5.8% increase in our production over the prior year. On an annual basis, our gross profit percentage in '07 was 3.4% compared to 1.1% reported for '06.

As indicated above, the 2006 period includes startup pre-production cost for the newest plant in Mexico, which totaled $10.1 million. However, our reported gross profit for the year 2007 includes shutdown expenses for our Johnson City, Tennessee plant that ceased operations at the end of the first quarter of '07.

And additional wheel program development cost that in total approximate the same level as the startup expenses were in 2006. Additionally gross profit in 2007 includes an additional $3.8 million of expense related to our purchases of wheels from our joint venture in Hungary due to the sharp increase in the value of the euro in 2007.

SG&A expenses in the fourth quarter were $5.4 million or 2.4% of sales compared to $6.8 million or 3.2% of net sales a year ago. The current quarter included lower than normal expenses for retirement benefits, bad debt expense and stock-based compensation.

The latter decrease was due to the timing of option grants in 2007 versus the prior year. SG&A expenses for the year 2007 were $29.2 million or 3% of net sales versus $25.7 million or 3.3% of net sales in 2006.

As indicated in our earnings release, the major increases in 2007 were the $2.2 million labor-related legal settlement and $1.0 million legal and audit costs related to the derivative lawsuit. A year ago, we reported that our fourth quarter of 2006 had been impacted by unusual quality and manufacturing issues at several of our plants, in part as a result of plant loading challenges, which required additional expenditures in that quarter.

The steps taken in early 2007 to achieve sustainable optimized manufacturing and performance levels are now paying dividends. Ken Stakas, our Senior Vice President, Manufacturing, and his new plant management have restructured plant organizations to achieve improved performance even beyond that demonstrated in the fourth quarter of '07.

Accordingly, we now see improved operational performance in our plants, as well as increased production at our new facility in Mexico. As part of our renewed emphasis on operational improvement, we have instituted a more rigorous plant-focused budgeting process that has also engaged the talent and enthusiasm of our mid-level managers.

This will, of course, help us sustain the current momentum in our plants into 2008 and beyond. Superior's unit shipments increased approximately 2% in the fourth quarter, while North American vehicle production of passenger cars and light trucks increased approximately 1%.

Year-to-date, our 2007 shipments were higher than 2006 by 10% compared to a decrease in North American production of 2% during the same period. However, for the year 2007, North American production of the specific vehicles with superior wheels increased 6% compared to our 10% increase in shipments.

Accordingly, market share gains were experienced in both passenger cars and light trucks for the year, and in passenger car s for the fourth quarter. Complementing our traditional strength in the manufacture of aluminum wheels for SUV and light trucks during 2007, we also won new supply contracts on strong selling crossover vehicles, including the GMC Acadia, Saturn Outlook, Subaru Tribeca and the BMW X5, and passenger cars such as the Ford Fusion, Mercury Milan, Nissan Altima and Sentra.

Major customers, once again, acknowledged Superior's outstanding performance in 2007 with Ford's Gold Supplier award and GM's Supplier of the Year, our sixth straight such award from GM. The expansion of our product mix with new wheel finishes and value added manufacturing processes was another factor behind our success in winning new business in 2007.

Examples include 17 and 18-inch mirror finish wheel programs for the all new Chevy Malibu and an 18-inch bright polish wheel program for the redesigned Cadillac CTS manufactured with the latest flow form technology that provides improved performance. With the trend to our OEM high performance vehicles, we are expanding our commitment to flow foam technology to meet the anticipated customer requirements.

Having now completed 50 years of business, the entrepreneurial can-do spirit that has driven this company from the beginning is alive and well today. Looking ahead, the structural changes caused by the globalization of our industry will continue to provide many challenges for Superior.

Product pricing pressures from developing countries with restructuring actions taken by our customers and economic uncertainty will present us with both hurdles and opportunities. Our priorities for 2008 are clear, continue to optimize our manufacturing operations, grow value-added specialty product offerings, look for value-enhancing global opportunities, and deliver sustainable long-term positive financial performance.

As has been the case in the recent past, we will not be providing specific earnings guidance for further periods. Before reviewing some of the financial details for the quarter and year, and then taking your questions, I wanted to mention that due to the required corrections to our deferred tax liabilities referred to earlier, we are filing for an extension on our annual report on Form 10-K, which will now be filed within the next two weeks.

The Form 10-K will include restated financial statements for the full years '06 and '05, restated financial data for the full years 2004 and 2003, as well as restated of financial data for the interim period in 2007 and '06. Looking at some of the details of the income statement and then balance sheet, for the quarter OEM had sales $229.243 million compared to $212.169 million a year ago, an 8% increase.

The year-to-date period is $956.892 million compared to $789.862, a 21% increase. Income from continuing operations fourth quarter $5.775 million or $0.22 per share compared to a loss in '06 of $4.987 million or $0.19 per share.

Year-to-date earnings of $10.319 million, $0.39 per share compared to a loss of $11.826 million or $0.44 per share. Net income, again, in the fourth quarter $5.8 million or $0.22 compared to a loss of $5 million or $0.20.

Year-to-date $10.3 million or $0.39 compared to $11.6 or $0.43. Gross profit margins in the fourth quarter $5.0 in '07 versus a negative $0.4 in '06.

Year-to-date 3.4% compared to 1.1%. SG&A percentage of sales 2.4% in the fourth quarter '07 compared to 3.2%.

Year-to-date 3.0% in '07 compared to 3.3%. Net income as a percent of sales 2.5% positive in '07, negative 2.5% in '06.

Year-to-date '07 1.1% compared to a negative 1.5%. Shareholders' equity at the end of '07, $550.573 million compared to $562.087 million.

Current ratio 3.7 to 1 in '07 compared to 3.1 a year ago. Weighted average shares for the diluted calculation for the fourth quarter $26.641 million in '07 compared to $26.610 a year ago.

On a year-to-date basis $26.635 million for '07 and $26.610 million for '06. The actual shares outstanding at the end of '07, 26,633,440 compared to 26,610,191.

Depreciation and amortization expenses in the fourth quarter were $11.238 million compared to $9.935 million. Year-to-date, $42.924 million compared to $39.137 million.

Our estimated depreciation for the year 2008 will be $45 million approximately. Actual capital expenditures in the fourth quarter $5.953 million in '07 versus $6.247 million a year ago.

Year-to-date, $37.639 million, and for all of '06, $73.062 million. Estimated full year capital expenditures for the year '08 $27 million.

Interest income net was $976,000 in '07's fourth quarter compared to $1.4 million a year ago. The differences there of approximately $400,000 both relate to the amount of cash that was available for investment and some interest expense that we incurred.

Year-to-date interest income net was $3.7 million compared to $5.6 million. Joint venture equity income $2,619,000 in the fourth quarter '07 compared to $2,254,000 a year ago.

Year-to-date $5,355,000 compared to $5,004,000. Miscellaneous income $726,000 for the fourth quarter of '07 compared to $246,000 a year ago and year-to-date $3,195,000 of income compared to a negative $268,000 a year ago.

Majority of the year-to-date miscellaneous income was due to the sale of some stock investments that we had and sold during 2007. Cash and cash equivalents at the end of '07 $106.769 million and cash and short-term investments a year ago $78.1 million.

Some other balance sheet information, accounts receivable net at the end of '07 $125.7 million compared to $138.6 million a year ago. Inventories $107.2 million compared to $118.7 million last year.

We have an income tax receivable this year of $6.7 million. Other current assets $9.7 million compared to $11.2 million a year ago.

Total current assets $356.1 million compared to a $346.6 million in '06. Net property, plant and equipment $302.3 million compared to $310.4 million.

Investments $51.1 million compared to $46.7 million. We have a non-current deferred tax asset of $12.7 million this year, which we did not have a year ago.

Other assets $7.7 million compared to $8.8 million. Total assets $729.9 million compared to $712.5 million.

Accounts payable, $51.6 million compared to $61 million last year. Accrued expenses $44.0 million compared to $41.9 million.

Income taxes payable in '06 were $10.3 million. And as I mentioned earlier, we have an income tax receivable of $6.7 million this year.

So total current liabilities then were $95.6 million compared to $113.2 million at the end of '06. Non-current tax liabilities of $62.2 million, which is due to the adoption of FIN 48 at the beginning of '07.

We have deferred income tax liability in '06 of $15.6 million. Retirement liabilities at the end of '07, $21.5 million compared to $21.7 million last year.

And then, again, shareholders' equity $550.6 million compared to $562 million. Total assets $729.9 million compared to $712.5 million.

Working capital at the end of '07 $260.5 million, last year $233.4 million. And now, Jessica, we can turn it over to questions, if you will.

Hi, guys. How are you doing?

Hi, Brett.

This is actually [Matt Maschon], his associate. A couple of questions to ask you guys.

First of all, great quarter, and it's nice to see somebody green on a day like today. SG&A, is this low rate sustainable as a percentage of sales?

Looking at the quarter rate?

Yes.

No. The expenses that were lower this year were kind of one-time, if you will.

There was a situation in our retirement benefits, unfortunately there was a death or retirees. So we received a death benefit payment, which reduced our expenses for the year.

Okay

And then the stock-based compensation was due strictly to the timing of options in the early -- they were in the early part of '06, whereas they were at the end of '07 because we held off, because of the derivative situation in '07. So, the expenses, if you look at anywhere between 2.5% to 3% for SG&A, you should be okay.

Year-to-date number is more likely.

I guess, so, anywhere between 2.5% and 3%.

Right.

As far your outlook for wheel shipments, what are you expecting for next year? Are we holding up or moderately up or really up?

Well, with everything that's going on today, I'm not sure we can even estimate that at this point.

Okay.

We get our numbers every Monday and not much more you can do in forecasting at the rate things are changing.

Are you seeing any kind of signs of like stabilization, is there any one customer doing any better than other?

No.

The guys at General Motors doing better than Ford and such, any color on that?

Mike, you want to…

This is Michael O'Rourke. On the passenger car side, definitely we've seen some strength on GM's new offering in the Malibu.

CTS, we expect that's going to continue. We've seen some increases on tooling capacities on specifically the Malibu, which is good news.

On the SUV and truck side, everyone's trying to differentiate with different option packages, so big wheels come into play. We might see an increase in some of the larger offerings as we go through '08, but it's a tough segment.

And I think GM's done very well as we all know with the new offerings, and that's encouraging. And I think some of that's going to continue for them.

Okay. Great.

One last question for you. Have you seen any sign of takeover business, significant takeover business from some of your more distressed, some other distressed suppliers?

I think obviously, we saw a lot in '07. The increase in volumes we saw, really it goes back to late '06, which is one of the reasons that a quarter-to-quarter comparison, '06 to '07.

We're not seeing that increase that we saw earlier in the year. So '07 we got, we're very fortunate to pickup some programs.

There are still some takeover business that we're working on, that will come into play in '08. I don't think we are going to see the major programs that we saw in '07 based on what happening here in the US and North America.

Okay.

The other things that's interesting is, globally there is a lot of cost pressures, logistics costs are coming into play. We'll see how that plays out with some of our Asian competition and how they deal with those cost pressures.

Thank you very much guys and a nice quarter.

All right. Thank you.

Great. Good afternoon or good morning for you.

A couple of things, I wanted to dig through here. On the shipment number; as we look through the first part of the year, first couple of quarters, you've pretty strong shipment numbers relative to production, and that's changed here pretty dramatically in the fourth quarter.

What happened here in the fourth quarter?

I don't know if it really change that much. If you look at '06, we had pretty strong for, if we look every quarter in '06, the fourth quarter was relatively strong in comparison to the other quarters.

So we got in to '07 with the takeover business, we saw these big quarter-to-quarter comparison increases versus '06. In '06 fourth quarter, I think our shipments were $3.1 million and that range from over $3.2 million in '07.

So that takes into account some of the takeover business that we were able to get towards the end of '06.

I saw that your fourth quarter shipments last year were down 9% though?

As compared to...

Previous year.

'05.

Yeah. But it would seem to me to be an easy comparison, not a tough comparison.

Ford production.

In '06.

Yeah, it was down.

Yeah.

One of comments here is that Ford in '06 was way down in the fourth quarter which may have explained some of that comparison to '05.

Okay. And do you have a number of what's your estimate aluminum contributed to your revenue line here in the quarter?

Actually in the fourth quarter, it was a negative because, the prices I guess started coming down in late third quarter, and then into the fourth. So I do have it here, if you hold on a second.

Say a couple of million dollars or something?

I think it was, no just over $1 million drop.

$1 million, Okay.

Yeah.

You talked about that -- comeback on that. Where do you think you are right now on I know the timeline launching Mexico and moving production down there in right size in the capacity here in North America.

I mean most of the way through there, or there's still room to go, you just kind of give us some perspective on that please?

Well, as it relates to Mexico, where we thought we're going to be at this point in time, the capacity is there, but unfortunately, the customer requirements have lessen from where we thought they'd be at this point in time. So the new plant is definitely contributing to the improvement in the profit, it may not be to the extent we were hoping for at this level, but again, its due to the external pressures and not anything internally.

As far as restructuring or rationalization goes, it's still early in the game when there's nothing we're planning at the present time. We are just watching the market and trying to get an idea where it's going.

What do you think your capacity is today?

In Mexico, in the new plant or in general?

In total.

$14 million.

I was going to say $14 million, $14.5 million.

Okay. So your intention is a kind of, you don't need the down side that further from here, do you?

Not at this point.

Okay. And then, do you think your US plans are deploying that they are competitive at this stage or is there -- are we still looking at a year or two or three down the road of another Mexico plant?

It depends on what program is there in there, some are less comparative and that's probably the strongest push we're doing, David, as to keep working on our costs to be competitive in our U.S. operations.

I am not saying that we want to be a huge financial winner there because we understand the pricing scenarios but we want to be plus and continue to move in that direction, which is what we are doing, what we are seeing today.

And then this one other number of question and I will come back if needed, do you have the cash from operations number for the year of the cash flow statement?

David, I meant to grab that before they came down here and I unfortunately don't have it, if you want you send me an email I will be happy to get it for you.

No problem, I will come back and with some another question. Thank you.

Thanks, hi everybody.

Good morning, Rob.

Just a couple of here, going forward what should we expect for a tax rate, I am thinking as [Mex] goes up and running and contributing the tax rate should be coming down?

We here at Superior are calling 2007 the year of taxes.

Okay.

And we just had so many things happen with what with the change that was made several years ago and that quarterly tax provisions have to be looked at as if they are in annual period. Certain items that are considered discreet and they can only be included in the current quarter as opposed to being estimated over an annualized tax rate situation that we just dealt with.

It is another thing that needs to be look at. So to project where we are, I mean things like tax credits and permanent differences have a much greater impact on our percentage when our pre-tax profit is down.

Where it is today, as we build a pre-tax profit levels back up, those things will have a lesser significant on the tax rate itself. We reported what, 51.3, I think it is for the year overall rate and its probably going to stay in the 45% to 50% range, I would guess as the pre-tax profit continues to grow.

Okay. Stay in that range, okay.

Yeah.

You mentioned, but Mexico it's not fully utilized right now. Is the intention, I understand volumes are less than you are expected production of vehicles.

But is the intention to fully load Mexico at the expense of the more expensive U.S. plants and if so is that just take a while to do or am I off in that thinking?

No you are completely correct, Rob. And we have a lot of programs coming in this summer.

So we'll see a further loading at the plant and I anticipate we'll be in the 45,000 to 50,000 range, depending on the economic environment by the end of this year, which is about inline with what we anticipated. We will keep looking at Mexico for positive plant loading and opportunities and working on what mix makes the most sense throughout the organization.

Okay. And then just last one.

Which did the Big Three account for in terms of percentage of revenue, percentage of unit shipments in the quarter?

I don't have that number right in front of me.

In the quarter?

I guess, whatever is easiest, Bud?

About 79% that's the Big Three in the fourth quarter of '07.

And that's revenue?

That's units.

Units okay. And would revenue be materially different?

No, I don't think so.

Okay, thanks guys.

Thanks, hey guys, can you hear me?

Yes.

Okay. So we're mostly through Q1 of '08 here.

The Big Three, or at least GM and Ford have published production schedules for Q2. Do you have a feel at least for Q1 and may be Q2.

What your real shipments look like on a year-to-year basis?

Right now, other than the actual strength, it's had some short-term impact, which we are told, once that resolves will be made up in overtime any way, so we're not taking much indication from that. Our numbers look still very positive for the year at this point in time.

We recognized that the economic environment is questionable, lack of transparency to understand exactly what's going on today. So we're being optimistically cautious about what our shipments will look like.

But we have a lot of new launches coming up that will have some system [bills] that will continue to push those numbers into what we consider to be good positive numbers for the year at this point in time.

What's the timing on those launches, Steve, are they normal second half kind of launches?

Second half July, August, they already -- we are in beginning ramp up some of them at this point in time.

So given the timing of the launches and what looks like the cadence of production, is it fair to assume then that your shipments may be down year-to-year in the first half, but up in the second half, So that you will be up for the year, am I thinking about that right?

It could be flat for the year, flat for the first half and may be up for the second.

Okay.

We're not getting a lot of negative traction on the numbers right now. But it can change so dramatically that I could be eating my words on Monday.

Okay. Can you tell us in the quarter what the mix was of production in U.S.

versus Mexico?

That’s probably I would say, at this point we are at 40: 60 may be, 40 Mexico, 60 US and that will continue to shift.

Where do you see that by the end of the next year, Steven?

By the end of '08 or '09?

End of '08.

50-50.

50-50 by…

Yeah may be skew it a little bit 52-48.

What in '09 and even further?

So that depends on what the environment looks like out there. And what the pushes are, we just keep hearing a little tidbits here and there about some of our OEM customers being a little more concerned about in the Asia.

Logistics the RMB quality from time-to-time may be they have overstepped their balance a little bit. So there is a lot of things that are playing out.

We feel the domestic cost, the manufactures that are probably scratching their head about whether they really want to stay in this business. So, we are keeping our doors very open to those opportunities, understanding that the pressure on pricing, which has certainly stabilized greatly, is not going away.

But as I said in my opening statement we are going to be last man standing and we are going to take business and make some profit. It may not be initially in some of our US plants where we want it to be.

But we are really working hard on costs and understanding how to become a more efficient organization.

A last question on the equity income in the quarter, was at little bit higher than normal even for a fourth quarter, was there anything in there that was kind of one time in nature or had anything to do with the accounting restatements that you had to do?

No, the accounting restatements for the equity earnings is very small, less than a $100,000 impact. But the euro did have about $0.5 million impact on our equity earnings.

It’s had about a $4 million for the year, that's been a very tough peso, if you look at that part of business. We didn’t hedge the euro like we could have if we had the crystal ball we’d have done that.

But that impact was pretty significant to us and if you look at that detraction from earnings you could certainly, as I say, it’s part of business, so it has to be included. I want to also make a comment to everybody on the line.

I've already read a couple of tidbits this morning about this restatement, it’s absolute non-event, its meaningless, it’s a lot of companies go through this when they have huge amounts of depreciation and we really will be looking at that. Whether it is material weakness, is really insignificant because what we are doing today is we are really looking at whatever past management issues we had to getting things done correctly and we are fixing all of them.

As I say, it is non-event and insignificant, shouldn’t be a concern to anybody.

Just to clarify, the $4 million figure that Steve referred to on the euro, is up in cost of sales, it is in the gross profit areas but it didn’t impact the equity earnings.

Just to clarify, the $4 million figure that Steve referred to on the euro, is up in cost of sales, it is in the gross profit areas but it didn’t impact the equity earnings.

The $500,000 that you mentioned, was that on the equity line?

That is on the equity line and that’s for the year.

That is on the equity line and that’s for the year.

Negative or positive?

Positive. And was $0.5 million for the year and about $275,000 for the fourth quarter.

Positive. And was $0.5 million for the year and about $275,000 for the fourth quarter.

Okay, great. Thank you very much.

Hi guys, this is Ravi in for Jonathan. Did you quantify the takeover business in the quarter?

No, we don’t do that.

No, we just don’t know at this point. You know the players that are left in the U.S.

number one, and what their positions are, those that are public certainly have not stated anything, but we just keep our eyes and ears open if there is potential opportunities and we will seize on those where the OEMs ask us to, just as we’ve done in the past. This is a tough business and as you know it’s been a difficult ride for us from where we were to where we’ve been and where we were going and we are very positive about it.

We are highly respected and we will continue to take that position and help out the OEMs when they need help.

Got it, and also I think earlier you spoke about logistics costs and that going up. Can you help us understand, how much that’s actually affecting your competition in terms of pricing and what you’re actually seeing in the market?

Okay, thank you.

Yeah.

All aluminum contracts at OEMs are a 100% pass through pricing. So, the only issue that may crop up is timing on pricing from time-to-time depending on when we get resets, but everything is a 100% pass through.

Okay. And then the, you said the, your earlier comments, your applied visibility was pretty low in terms of productions almost week-to-week.

So, now have you guys modeled a stress case where, for your platforms obviously, the outlook right now isn’t great and with these, with obviously the cost inflation, how much cash you could possibly burn in a stretch, for the year?

I don’t see much cash burn. Our free cash flow is very positive and we’ve gone into a major budgeting process at each plant.

So, we react very quickly to what we need to do in pullbacks at the plant level with our cost. Obviously, our fixed costs are our fixed costs and we have to be careful of that.

But, we have not modeled a major cash burn, and I don’t believe it’s of a high level of concern, but it’s something that we will discuss externally once we are off this line and I appreciate the comment.

Okay. And then lastly, you mentioned, the Chinese competition in terms of how they are seeing cost pressures, now is there something that’s specific to China as opposed to you guys, I mean obviously higher cost of raw materials I would imagine impacts everybody equally, but is there like specific wage inflation or things like that that you think might make it more difficult for them to compete?

No, we are not the sole supplier on all GM 900 programs today they are split on some of the programs, we have a 100% in some of them, some of them are split. We still have a large bulk of those programs so.

Okay, thank you for your help.

Thank you.

Yeah, hi thanks. It looks like gross margins have migrated up to 5% in the fourth quarter.

How should we think about gross margins going forward in ‘08 as you continue to move more production down to Mexico? How much higher can gross margins get?

Well, that’s a tough question Adam, and I don’t think I want to speculate on that based on the environment, but our intention is to continue to migrate that further to a plus side higher than five but I’m not prepared to really talk directly to that at this point in time.

Well, depending on what the business outlook is, I mean certainly Mexico is going to be 50 plus percent of our production. And it could go a little bit higher and we haven’t discussed anything about other global opportunities that we are looking into at this point in time.

We have said many times that we certainly would like to get to 5% after tax number minimum, and we will continue to work towards that goal.

Okay. Thank you very much.

Hey, guys how are you doing?

All right, Brett.

I just wanted to clarify one quick one that you made. Did you say that you think that GM is going to make up production with overtime because we were under the impression that they weren’t going to do that?

Okay, well thank you very much.

Yeah, a few other items here. The takeover business you’re talking about in the second half of this year, do you think that’s comparable in scale to what you took over earlier here in ‘07 or not?

It could be David, just depending on what happens, if there is any what happens with these players. I mean it’s a hard call, we know that with [MCAST] when they were in some of the other issues, I guess it’s just a question of what some of our competitors are going to decide to do with anything.

They may not do anything, they may continue to just produce and deal with their own internal issues.

We have some takeover business coming in, in 2008 for the 2009 model year, some of the business Steve mentioned additional launches and new programs coming in, that’s a mix of replacement, some incremental and some quick to market, which would be more of a takeover.

But, David what I’m referring to is potential opportunities.

Okay.

Vis-à-vis our competitors and where all that is going to unfold as time goes on.

No.

13.2

What’s in average our shipments burn off?

13.2.

13.2.

13.2. And your capacity is 14 million?

Right.

I mean, you are only 6% short of that. I mean conceivably you are running at full capacity sometime at the end of ‘08 or early ‘09 aren’t you?

Where are you in the planning stage of the additional capacity then down the road, I mean is that at 2009, 2010?

Well, I wouldn’t say at this point David, but we are in strategic discussions on a couple of interesting opportunities.

Okay. And then the other item here is, if we look at the quarter and where your earnings were in the quarter and you’ve seen, nice recovery here in margins as you start to get the costs side out.

Is there anything there and I saw that you have some incremental business that you have coming in, in ‘08, is there any reason to basically not to take your fourth quarter numbers and annualize that for a full year number or are there some things going on there we should be aware of?

Well, it would be nice to annualize that, since we don’t give guidance you are going to have to decide how to play that one out.

All right.

At this point in time.

I’m just trying at a different way to...

Of course you were. And when I speak in the Morgan Stanley Conference, you can listen to that one, maybe you can squeeze anything in that way to.

All right, thank you.

All right, David thanks.

Good morning.

Good morning, Jeff.

You touched a little bit on my first question, which is the impact of your competitive advantage that increasing fuel has I am not blaming, for anymore pressures in that area, but did I interpret correctly that you perceive that the cost of fuel is significant enough for your Chinese competitors to reduce to some extent the competitive pressure from them?

Well, I think that yeah, we’ve made a 150 million wheels in this company, and we bang our heads up against the walls sometimes wondering, when we see some of this pricing that comes out depending on what country it’s coming from, as to how that’s really sustainable with any real profit margin, and then when you look at what it costs to build a facility and the capital equipment involved, and doing it right, and the requirements by the OEM’s, both from a safety standpoint and from a quality standpoint. You really start to look at all that, and I think we understand making a wheel and that becomes very difficult to understand, how those prices can create a profit picture long-term that is sustainable.

That’s really what I am saying.

In the larger size wheels, particularly 18 and particularly 20 inch, we are highly competitive to anybody in our Mexico operations based on our full logistics. There is no question about it.

Well, we are certainly continuing to move in that direction and I have to say that we have developed a really nice relationship with Toyota and continue to garner new business in that particular field along with some of the other OEMs or some we still need to break into. But as time goes on, we will continue to move in that direction and try to pick up new pieces of business.

I might say and no one has asked a question also that we’ve seen a real significant volume increase in our European, Hungarian operation that we’re quite proud of and seeing more and more players even though we are a small player in Europe, come to us based on our engineering quality abilities.

All right well. Thanks for taking my questions and thanks again for the navigation you guys have done through the past couple of years.

Well I appreciate that comment very much.

Good morning. Most of my questions have been answered, I have just one sort of small question and that is as you head into ‘08 have you hedged your gas use at all or where do we stand on that?

About, guys it’s what, about maybe 40-50%.

40%.

40% of our gas is hedged at significantly below market right now and we think there is an anomaly and this, the anomaly is in the commodity market altogether that doesn’t mean anything in today’s environment, but it’s strictly from a supply demand standpoint, we believe there is really an anomaly going on in the gas market, we will see it come back down. As it does we are going to poise our self to do additional hedging as we go through that.

I wish I could say the same thing about the year over, but I’m little less comfortable with that one at this point.

Okay. Thanks.

You bet.

Well, I appreciate your listening to us and listening to the Superior story, and we look forward to reporting similar results in the future. Thanks again.

Thanks everybody, and I will be in New York, Monday and Tuesday. Okay, thank you.