Conference Transcript - DAN 2026-06-03

Speaker 2

All right. Welcome back, everyone. I'm very pleased to have Dana Incorporated up as our next company here at the UBS Auto Conference. I'm pleased to have Bruce McDonald, Chairman and CEO, and Byron Foster, incoming CEO, as of July 1. July 1, that's right, yeah. Right around the corner. But, you know, a lot I want to get to here. Why don't we just start with, you know, sort of current trends, sort of what you're seeing in the business, and really from an end market perspective, you know, I know you've laid out some of the, some of your assumptions for, you know, different end markets, you know, light vehicles, sort of, you know, light truck, commercial vehicle. on your first quarter earnings call. We've seen some changes to third-party forecasts, at least on the light vehicle side. Then we had some good orders numbers on commercial trucks. So maybe you could just sort of update us sort of what you're seeing currently in the market and where sort of the push and pull is really for the balance of the year on the demand side.

Byron Foster, CEO

Yeah, sure. I'll start on the light vehicle side. Right. So we're seeing good, steady production from our customers, our large programs. We're actually seeing some slight volume uptick, and the markets seem to be pretty stable and resilient, despite kind of all the other things going on around the world. So we feel pretty good about the demand on the light vehicle sides. Our plants are humming along right now in Q2, and we expect that should continue into kind of the back half of the year. On the commercial vehicle side, on the Class 8, we're starting to see pickup in demand there. So we're starting to see that come through in our orders, and we expect kind of in the back half of the year that there should be some uptick there. now for us you expected that already though in your initial guidance or is it sort of trending a little bit that's trending a little bit ahead of uh kind of what we thought initially um but for us just from a mixed standpoint um you know we're we're a larger player kind of in the medium duty space and we're seeing that continue to be you know soft to you know flattish to soft um but some uptick on the Class 8. So net-net, you know, there should be some slight upside for us from a volume side in the back half of the year.

Speaker 2

And sticking with, in the commercial vehicle segment, with some of the international markets, whether it's Europe or China or South America?

Byron Foster, CEO

Yeah, for us, you know, the larger markets for us are really North America. South America is fairly large. South America is kind of soft. North America, we're seeing the pickup, and Europe remains kind of soft, but not a big, big region for us.

Speaker 2

You know, so when you, when you reported, I think you sort of were indicating, you know, maybe towards the higher end of the, the, the guidance range. You know, is, is it, is it, is it really just sort of volume that's sort of going to determine here where you sort of play out, you know, with, within that range or even above that range?

Byron Foster, CEO

Yeah, I think for, in terms of getting us, you know, continuing to see us at the top end of that range, you know, we're looking for volume to continue to be stable. Again, we're seeing some good signs here in the quarter. The CV pickup that I mentioned earlier, you know, should that really kind of continue to come through and the supply base be able to react to that, that could present some upside to us. And then we've got a lot of activity around, you know, continuing to drive cost in the business.

Speaker 2

So to the to the extent we can accelerate some of that, you know, all combined that would lead us to kind of continue to the higher end of the range yeah yeah and then on the cost savings side um you know you've done a really good job there big part of the story right been able to sort of take costs out um you know i think as you sort of move through the year you start to get up against some of the the the the comps if you will from when you started to take more costs out there so how should we think about that progressing um and you know one of the things you know, we've talked about in the past, right, is how you're continually evaluating the business and always looking for more and more opportunities. So where do we stand on that?

Byron Foster, CEO

I would say a couple things on the cost side. So first, so far year to date, we've taken out $35 million of a plan to get $65 million out. So we're on track to deliver that $65 million for the year. But to your point, Joe, you never stop on the cost optimization piece. So when we laid out our Dana 2030 plan, we talked about an incremental $65 million of costs that we're looking to take out over the plan period. So we're constantly working on that. And then if you think about cost in a broader sense in terms of our in-plant productivity, our purchasing savings, I mean, teams have roadmaps in place to deliver that, and they're constantly looking for ways to kind of over-deliver in that regard. Things like automation, right? We're a big effort on automation to drive efficiency, improve quality, improve safety in the plants, and so we're actively driving those projects and trying to go as quickly as we can.

Speaker 2

Since you brought up automation, I mean, it's obviously something that you've talked about in the past, And, you know, but like maybe you could sort of just talk to us a little bit about your approach. Like, are there things you automate in one plant that you then see this has applicability to a different plant and you can sort of scale it and then vice versa?

Speaker 1

There might be other areas. Yeah, I would say, well, first of all, we're if you compare our manufacturing operations to, let's just say, an investment grade manufacturer. I'm not counting automotive, but just in general. But we were capital constraint, and so we're behind. So there's a lot of low-hanging fruit. But if you were to go into our manufacturing operations, I mean, some of our plants, it's well over half the people have jobs where they're loading or unloading a machine, And that is very low-level, single-arm robotic, replacing two or three heads, because it's three shifts, two or three shifts a day. And that's why we have such a high payback. So there's a lot of opportunity. And I'm talking about not loading something like this into a machine. We have lift-assisted things, and it's banging around. It's not safe. if it's ergonomically a challenge, it's not kind of jobs that the union, our union colleagues like to do. So we haven't had any pushback in terms of, hey, this is where we're deploying automation. So it's not Tesla robots running around our plan.

Byron Foster, CEO

Yeah, exactly. I would just add to Bruce's points. So one, you know, when we find an opportunity, we're very much looking to share that across plants, right, that have similar operations. So we have a roadmap of kind of best practices from a deployment standpoint that we can leverage so we don't have to relearn this every time we want to deploy for a specific operation. The other opportunity is just material handling, you know. So that's a big one for us. the movement of material through automated kind of AGV type technology is a huge opportunity for us.

Speaker 2

So I think those investments are sort of contemplated in your CapEx budget.

Speaker 1

But like how long do you think this process sort of could take to get the plants up to more acceptable levels as you sort of, you know, I think in our numbers that we put in a capital market day, I think we got about $175 million of capital here over a three-year period. So, say $60-ish million a year type thing. And Byron's point, one of the things that we are finding is we've got a team that's going out and identifying projects by plant, things like that. And once we go into a plant and implement, then the plants are coming back and saying, hey, we got some other, I have now lived with this, We've got some other ideas. So it wouldn't surprise me if we picked that number up.

Speaker 2

That's helpful. I mean, I guess not so much on the cost side, or maybe it is, but it might also just be, you know, some other factors here. I think one of the other things you mentioned that the capital markets say was there's a number of parts or products that are just not profitable today. So, you know, maybe we can sort of talk about the effort to, you know, either get them profitable, whether automation or other aspects are a part of that, or whether it makes sense to remain in the portfolio.

Byron Foster, CEO

Yeah, so in the capital markets today, we gave an example of one of our ceiling plants that that particular plant has quite a few SKUs. I think it's close to 600 SKUs. And so we've been going deep into part-level, skew-level profitability and understanding what our margin profile looks like. And for those parts that are not meeting our hurdles, we then have to unpack, okay, what's driving it? Is it a design issue? Is it material? Is it pricing? Scrap throughput? So we go through all those to see what levers we might be able to pull to get the parts to an acceptable level of profitability. And if we can't find a path, be it on a set of SKUs, on a product line, on a set of business with a particular customer, what have you, then we have those discussions and we're more than willing to exit. I mean, we just, you know, each product line, each SKU, each plant has to get to a level of sustainability from a profitability standpoint. And we're just attacking that in a very aggressive way.

Speaker 1

Yeah, I mean, just to put it in perspective, when you look at our numbers, like our quarterly bridges, and you're seeing the contribution margin that we have flowing through on the volume, because we've got repriced products going through here. And so this year, it's in the $30 million to $40 million benefits in our plan as a result of that stuff. So it's not, I think in your pre-questions, you were sort of asked about the time frame. And to the extent it's with, let's just say Ford, and we've got a lot of other Ford businesses, we're more constrained. But what we're finding is we've got a lot of other customers, some competitors, where it's fairly easy for us to implement the actions on a pretty timely basis.

Speaker 2

And as you sort of go through that process, are there some parts where maybe you think you need to reconsider whether it's something you continue to do, or you think these are all sort of...

Byron Foster, CEO

Yes, for sure. I mean, we have some products where the volume is very, very low, it's kind of niche to a particular... And so some of that pruning, if you will, will definitely result in some products just coming out of the portfolio, which is okay.

Speaker 2

Turning back to the capital markets day, and you highlighted a number of sort of, let's say, growth vectors for the company. one was sort of the you know the backlog um for um you know i guess let's say your existing traditional like you know you know light vehicle and commercial vehicle business and you know i think like especially with the um with the ram uh dakota win um you announced last last quarter um most of that seems sort of you know uh in the books um but maybe you could sort of talk a little about that. And also, you know, some of the other drivers here, I guess the two I'd want to focus most on are, one, some of the adjacencies, like you mentioned, you know, A&D or maybe power sports to the aftermarket. Because, you know, I know that that sort of seems to be a pretty sizable, addressable market for you.

Byron Foster, CEO

Yeah. So maybe I'll start and Ruth can chime in. But on the traditional side. We were obviously very excited with the Dakota win. It fits right into our strategy, right into our sweet spot. It's in our current manufacturing footprint, a lot of carryover products, so it made a lot of sense for us and for Stellantis, so we're excited about that, and that obviously plugs a big hole in terms of backlog. We are not done yet. We have a list of great opportunities with our customers i think in general our team's ability to execute from a quality delivery overall performance we have green scorecards our customers are looking for opportunities to grow with us so there there will be more to come uh on the traditional growth side uh even though that plugged a big part of our roadmap uh the team's not just on on that on that front um that means it could fall within certainly the 2030 timeframe, but are there still opportunities that could be even a little bit more near-term, similar to Dakota, or that sort of mostly? Well, I think, you know, for it to hit the business in the 2030 timeframe, we need to deliver, you know, wins in the next, let's say, 12 to 18 months, right, for it to launch in that timeframe. So, yes, there are other active opportunities that we're chasing that, you know, hopefully we'll be able to deliver some good news on those within the next kind of 12 months.

Speaker 2

So that work stream is well underway.

Byron Foster, CEO

Teams are focused there. On the commercial vehicle side, in addition to hopefully what continues to be tailwind from the overall market, we're really doubling up our efforts in terms of being in the field, talking to the fleets, talking to the dealers to create that pull through for the Dana solutions. And even though it's early days, we're starting to see some nice wins on that front. So, again, our traditional commercial vehicle business should benefit from both of those efforts. You want to take maybe?

Speaker 1

Aftermarket, I think we're sort of counting on a couple hundred million dollars type opportunity here. You know, the biggest single one is on the North American ceiling side of our business. And this is where we have a unique value proposition in the market in that we are an OE gasket supplier. and we're competing against people that aren't. And so what we're seeing, you know, it's a relatively inexpensive part when you're doing an engine repair. The TE was an OE quality part. And so we've got, you know, excellent demand, I'll say, from the big box retailers. The way that tends to work, Joe, is if I used, I mean, AutoZone as an example, they've got a number of regional DCs and they typically would say, okay, you can have this in this DC and prove ourselves, and to the extent we're successful, they would look to get incremental DC. So we got our foot in the door. This is a business we really weren't in, say, two or three years ago. We're probably at like a $40 million type run rate right now. We're in AutoZone, O'Reilly's, Advanced, and having some discussions with Napa to try and lock them in. So we've been very pleased with the pull that we're seeing on it. And, you know, right now I would say we're internally constrained on our ability to take business on. We're going to have to add some distribution capacity in the U.S., and that's an investment that Byron and the team are looking at right now.

Speaker 2

And just to refresh my memory, I mean, like this was something you used to do. You sort of lost the license, and so you're reentering.

Speaker 1

We sold a business with a 10-year non-compete, and now that expired six or seven years. Craig probably remembers. He's the only one that was around back then. He's not being a historian. We didn't jump back into it, and given the margin profile on it, it's very attractive. So it was more of a non-compete.

Speaker 2

It wasn't like someone else was making product with your name on it.

Speaker 1

And this is a market where we've got 35-40% share in Europe and that's our entitlement here in the U.S. So we're very confident in that one and so far so good in terms of the effort building it up.

Byron Foster, CEO

The other piece relative to growth, we have a whole work stream around adjacent markets, applied technologies we call it. So taking the Dana product, capabilities, technologies into new spaces. We've talked about power sports as an example of being one where the customers there are looking for more automotive grade, higher quality, more robust solutions for their vehicles. They're looking for hybridization solutions, local supply. So all fits right into the sweet spot of what we can provide from a solution standpoint. So we've been engaged with the top customers in that space at their CTO levels. We've got a number of RFQ opportunities in front of us. So that one is real. It's gaining momentum, and that's going to turn into something tangible for us. And then defense is the other one we've talked a bit about, and we all kind of understand kind of the ramp up and demand relative to defense. and again there we've got solutions that are relatively off the shelf just you know kind of have to beef up some of the solutions we have because they're looking for off-the-shelf solutions that are already kind of validated and that can kind of get to market quicker and again there we've got great traction with a number of the players in that space and and it's tangible turning into real opportunities for us yeah the reason i wanted to sort of um you know recant a lot of that work at that at the analyst day and so is it's just sort of really sort of

Speaker 2

segue into one of the big themes that investors are sort of looking at in autos here which is you know what core competencies do companies have that might have applicability to other use cases and you know i i think what your the examples you gave here right like um okay well you know we're we're good on trucks and commercial vehicles are there applications in military power sports clear example of that right taking something you know how to do finding a new end market um you know we just you know had a had a note out that sort of went through all the portfolios and i think you know one of the areas that you know we highlight and i'd be curious to sort of hear your views on this are um is is battery cooling plates right so clearly you do some of that in your business um for uh electric vehicle batteries but batteries are um in in you you know, creator demand beyond electric vehicles in terms of energy storage systems. So maybe you could just sort of talk about, you know, what you do there, your core competencies, how portable is that, like, type of technology, and, like, do you see demand for your product in some of these other areas? And is there anything else in your portfolio that might also have some applicability?

Speaker 1

We can tag team it.

Byron Foster, CEO

Yeah, yeah, go ahead. I'll start. So just from a baseline capability, we have, when we talk about the Dana product portfolio, we talk about thermal products, right? And so that can be helping regulate temperature of an ice engine solution to the EV space, which is where, you know, we've spent a lot of time developing capability to cool batteries in an electric vehicle, right? So that product is just what it sounds like. It is a plate that is kind of sandwiched between the batteries to regulate temperature. And there's a lot of intellectual property behind our solutions there. And we're on several key platforms with some of our larger customers, albeit at lower volumes than we initially thought. But we are in production with that technology today. And I'll let Bruce take kind of how we're starting to look at how we might be able to apply that to some of these other markets that you're talking about, Joe.

Speaker 1

Yeah, so as it's like ESS, which is a buzzword right now, in that space, we think the battery cooling plate opportunity right now is about $2 billion, like size of market. we have a stamped product so basically we stamp it and that creates the channels that we put coolant through as opposed to cast products which are the primary products in the market today there's some technical benefits in terms of heat dissipation of our product versus the cast ones and we think as the next generation chips come out we have a very good solution. So we are talking to people in this space as a tier one supplier, but it's in the prototype, technical solution, engineer to engineer. We're not at a point where we're quoting things or going to win new business. So, you know, when Byron talked about our applied technology growth initiative, we have five of them. And, you know, as we said, our capital markets today, look, this isn't a one-and-done process in looking at our capability in what market. And so, you know, from the capital market day to today, this is an opportunity that's moving pretty quickly. And we are having discussions with folks in the data center space and some of the chip suppliers.

Speaker 2

So it wasn't really considered in your capital market, say. I guess just a bigger picture then, because like you said, things are moving very quickly. All of a sudden, there's an influx of demand. You have, I would say, within Dana, probably a lot of technology. And whether it's BESS or data centers or power sports, I'm just curious sort of how you organize internally. Like, is there some sort of team that's responsible for almost like incubation of ideas saying, like, hey, we could do this. This is very applicable towards potentially this new use case. Let's see if we could sort of come up with a product and become differentiated.

Byron Foster, CEO

That's a pretty good description of our process, Joe. So what's important is that you've got to commit and dedicate the team and resources if we say, hey, we want to grow in this market. So first, we did the legwork of, you know, what's possible, what markets could have an opportunity where Dana could bring solutions to, and got down to this initial list, and we're continuously looking to refresh that as we, you know, explore those markets and see if there's something there or not. And then we have dedicated teams. And this all starts out, to Bruce's point, engineer to engineer. Do we have a technical solution that makes sense? Do we have a value proposition that's interesting for the customer? And then as these markets and opportunities become real, right, we will kind of build the team around those accordingly.

Speaker 1

And we've maybe done ourselves a little bit of a disservice because we've really focused on a window to 2030 And like we said, so a great example of that would be in our power sports initiative that we talked about. We really saw that opportunities around driveshafts and things like that, replacing, say, old technology, Chinese-based suppliers and things like that. And as we've gone into those discussions, what we found is a lot of opportunities for hybridization. So looking at our high-performance transmission business, we're now doing demonstrator vehicles for a couple of the power sports manufacturers on a hybrid product, almost like a range extended, so a couple miles of battery-only drive. But those would be things coming in beyond, like in 2030 tail end and beyond. So we're not limiting it to just a five-year window. We're looking for market opportunities that are attractive and at accretive margins. So the bogey that we've kind of given to our applied technologies group is 25% type EBITDA margins as a threshold type thing.

Speaker 2

You know, you mentioned, maybe turning the conversation just to plates again, just as an example here, right, that obviously the volumes didn't materialize, as I think everyone sort of planned and capacized for. Or certainly planned for. I guess the question is, was it also sort of capacized for? Is that something where you do have some excess capacity on that front? Now, so if you do find a new use case...

Speaker 1

Cooling plates, we definitely do. Okay, yeah.

Speaker 2

So that's something that obviously would require some investment, and some retooling, potentially, but some of it is definitely leverageable. Some of the core capacity is there that could be redeployed. And I guess it's TBD, but do you think it can be sort of fairly fungible and flexible that you could sort of switch back and forth, you know, let's say EV or best demand, if need be, or they would be...

Byron Foster, CEO

Well, our technical teams are looking to, as they explore this opportunity, to see what solutions could make sense, right? They're doing that with a sense, you know, with the understanding of the capacity we have in place and can we leverage that process in whatever solutions we may come up with. So we'll see. I mean, again, TBD, ideally, right, this capacity could be fungible and we could kind of leverage kind of both markets. That would be ideal, but we're still kind of in.

Speaker 1

I think one kind of way to think about it, I'm not the smartest guy in the room in terms of this topic, but as it relates to our base battery cooling plate business today, the market is moving away from a cooling plate on a cell that's two by three to something that's the size of these screens or a piece of plywood. So it would be one plate for all the cells. And so we will have to invest in capacity for our existing business, which will free up, because our machines can't make something that big. And we think the size that we have will fit the market demand if it comes through. So I don't see it being a very capital-intensive initiative for us.

Speaker 2

Are there other areas that maybe, you know, even since the annual stay, as you sort of take a longer lens and longer scope beyond 2030 that, you know, may come into purview? Like, you know, for instance, I think you're probably pretty good at gearing and stuff like that.

Byron Foster, CEO

So like in robotics, might there be use cases for some of your know-how? um we haven't really i would say what we have in front of us right now is kind of where we have the team teams focused um and the the big opportunity is you know in terms of the core capabilities around uh gearing as an example or are in these markets that we talked about because they bring you know pretty good scale and size of opportunity and then on the thermal front right beginning to explore, one, as the vehicle architectures change, we think the need for cooling in EVs is going to increase, and so we're working on some solutions as kind of the various computer modules come together into larger pieces where we would cool that, and then we're, again, obviously starting to explore the VESS space and data centers at a very initial stage, I would say.

Speaker 2

Okay. And I guess just in terms of ease of entry into that market, should we sort of think about it as maybe some customers that are already customers on a vehicle side that might also be exploring some of these opportunities? Or is it broader than that?

Byron Foster, CEO

I think it has the potential to be both. Obviously, some of our customers are starting to explore that. We have relationships there. They know us. They know our technology. So we'll see kind of where that could potentially go. But then there's going to be new players, right, where we're building contact, building relationships, and starting to talk about what the needs are and what solutions we might have.

Speaker 2

And we've got teams kind of working that space. And I guess just the last question on this is, like, does, when you have, like, what, you know, and again, maybe these conversations are very, very early stages, but as you sort of continue to sort of advance that, is the conversation centered around, A, we have capacity, we could do this, here's what we know how to do, or is it more around, like, what you mentioned before, where you have, you know, a stamp for sort of casting product, which is like, we actually think we have a better mousetrap here. Yeah, the latter. Yeah, exactly.

Speaker 1

It's definitely the improved heat dissipation from our product and the ability to have more surface contact or maybe mold it around a chip instead of just touching part of it. So it's really about solving a problem.

Speaker 2

Let's turn the page to Bruce. I know one of your favorite topics here over the past, you know, a couple of years, which is sort of capital allocation. So, you know, obviously sort of laid out some free cash flow targets for the year, some, you know, longer term sort of capital returns, you know, as well. Maybe you could sort of just refresh us in terms of, you know, how you think about, you know, the, not only the cash generation, but in terms of how you want to sort of, you know, use that capital. And I am, I guess, just curious a little bit, like, as we sort of, you know, start to think about and synthesize some of these potential new opportunities, is it, is it, are any of those, it sounds like it's pretty capital light. I just wanted to make sure it's sort of not, you know, significant enough that maybe, you know, you, or is it significant enough, whereas you may have to re-evaluate some other priorities.

Speaker 1

No, I think, you know, our, what we laid out our cap on Mark's Day was $2 billion of cumulative buybacks by 2030. And that was, that's what we sort of committed to so far. that would leave us with zero net debt at the end and that's not our desire so we sort of said look we want to be about one times leverage to the cycle you know I think in hindsight you know we had a debate with with a lot of folks outside the company around to what extent would we see multiple expansion by reducing our risk profile and you know we've we've moved up you know despite the fact we sold, our off-highway business, I think our efforts in terms of approving our margin, our balance sheet, we've definitely been rewarded with multiple expansion. So we think it's prudent for us to stay within that one times to ride out the cycle. So we've got...

Speaker 2

But that would give you more than $2 billion.

Speaker 1

So we didn't say, hey, here's every nickel. To the extent our business continues to perform well, as our leverage declines, then we certainly have the opportunity to pull it forward and expand it in an aggregate sense. And this year, we're sort of talking about we've committed to 300 million of buybacks, of which we're probably about halfway done right now, where we sit.

Speaker 2

Mm-hmm. One of the other parts of the capital market today was sort of, you know, market share gains, right, across sort of a different sort of array of calories. I am, you know, curious there as well, what is sort of the factor that you think is sort of driving these sort of share gains from competitors into yourself? Is it, you know, obviously things are always sort of some combination of, you know, price performance, you know, and durability.

Byron Foster, CEO

Yeah, I think the answer is slightly different depending on which segment we're talking about. So aftermarket, which we talked a little bit about earlier, is about reintroducing a brand that, you know, is recognized, that we have great kind of vehicle coverage for, and where our customers are looking for an alternative solution. and they're willing to give us that shot and, you know, give us some DCs, and we're performing, and we expect that piece will grow. I think on the commercial vehicle side, there it's about, you know, really getting the Dana value proposition into the market. So it's serving customers that we have underserved in terms of being in front of the fleets, in front of the dealers, and obviously continuing to execute with our OEM customers. And there, again, people are looking for an alternative and giving Dana a shot, and we're seeing some great kind of early wins in that regard. And then in our traditional space, the light vehicle space, I mean, we were able to deliver the Dakota program because our teams come to work every day and execute in a fantastic way, high quality, deal with a lot of complexities supplying the Jeep platform and have gained the customer's confidence that we can do more with them. So I think, for me, it all starts with our teams that execute every day in a world-class way, and then our customers want to figure out how to grow us.

Speaker 1

Yeah, maybe just double-clicking on the CV opportunity there, Joe. You know, we have brand-new, world-class CV axle plant that we built in Escobedo in Mexico. I mean, it's state-of-the-art. Customers are blown away with it because I don't think there's been a new CV axle plant in a long time. And so, you know, our customers right now are very worried about the inevitable supply claim. Can the supply base keep up with demand? It happens every cycle. And we've got surplus capacity, so that's helping us. I would also say our quality and our cost base, we think we have an advantage. So I think, you know, a combination of, like Byron said, us focusing on the dealers and the fleets, which we have not done in the past, create additional demand, as well as our ability to add capacity, reliable capacity, is going to help us gain share.

Speaker 2

Maybe just to close here, you know, late last week, I'm sure we all saw the argument article about the government pushing for certain U.S. requirement and contents on USMCA. You know, I don't think really that's surprising that the government was sort of pushing for it. I don't know whether 50% is ultimately going to be the right number, but maybe you could sort of, you know, talk about because I think you've already internally, like you already have a decent U.S. footprint. I think you've also sort of made some efforts to sort of try to get more U.S. content to help your customers. I know that's been sort of an edict by the automakers to the suppliers. So maybe you could just talk a little bit about how you think USMCA might evolve and how Dana's positioned within that.

Byron Foster, CEO

Well, I'll stay away from trying to predict like what the final solution looks like, but I will say to your point that, you know, because of the nature of our product being kind of large we're within a close radius of most of our oem customers for the final product and then the component footprint a lot of that is u.s but but also kind of global so through this whole kind of tariff piece we have worked that global supply chain to optimize it to leverage usmca as best we can and to partner with our customers on what the right long-term economic solutions are. And so when the new rules come out, we'll adapt and continue to evolve and get to the best low-cost solution for us and our customers.

Speaker 1

I mean, just add on that a little bit, because for me, it's not something that keeps me awake at night, maybe because I'll be leaving soon. No, I would just say, to our customers' credit, our customers' credit here in the U.S., they have done an amazing job working, you know, here's tariffs, chaotic, they've done an amazing job working with the administration, commerce department on, hey, let's try and figure this, like, we're willing to go there, but we got to have a proper path to get there, and they've done a great job up to this point in time, and I think I'm very confident they will do it again.

Speaker 2

I think that's a fair point, and it's not, you know, we don't know all the details of the larger potential agreement, and And so I think that's a totally fair point. And I would echo your view, Bruce, that I think, I don't think it's the administration's intention here to sort of inflict pain on this industry here. Okay. Well, I think with that, we're perfect out of time. So, yeah, thanks for joining us today. Bruce, see you off. I don't know, is this your last conference officially? Well, take care.