Kyle Maring

Kyle Maring requested more color on the auto and truck outlook for 2026 and how the auto OE pruning is factoring into that outlook. He also asked for details on expanding the 80/20 philosophy across the entire enterprise, the impetus for this, potential low-hanging fruit in operations/supply chain, and the expected timing.

Answer

Lucian Boldea (President and CEO) noted that Q4 2025 auto and truck (heavy truck and auto OE) were down, with aftermarket flattish, and no significant changes expected for Q1 2026. Regarding auto OE pruning, customer conversations are mostly complete, with significant revenue decline expected in 2027 but margin uplift in both 2026 and 2027. He explained that broadening 80/20 to operations is recent, involving a couple of quarters of analysis and training. Early insights show high product complexity, and the goal is simplification to gain margin and free resources for growth, with data suggesting typical 80/20 outcomes.