Question-and-Answer Session
Operator
[Operator Instructions] Your first question comes from the line of Brian Johnson of Lehman Brothers.
Brian Johnson – Lehman Brothers
Turning back to page 11 and 12 can you give us a sense of how currency has influenced the LVS and CVS margin development? If you were to take another cut at it and just look at the currency impact taking Euro denominated EBITDA over into the US how much of the improvement is due to that?
Chip McClure
I’ll turn it over to Jay in a moment to give you the details but obviously as we look at the currency impact, Euro is a big one but as you know we’ve got a lot of business in Asia and South America we’re also seeing a different currency impact that way too. Let me turn it over to Jay to talk about it in more detail.
Jay Craig
We’ve isolated the impact of the currency for the quarter, the strengthening of the foreign currency for the quarter we estimated to be relatively insignificant between $5 and $7 million impact on our second fiscal quarter.
Brian Johnson – Lehman Brothers
On the EBITDA line?
Jay Craig
On the EBITDA line.
Brian Johnson – Lehman Brothers
The second thing is also on CVS margins. This is the first quarter, last quarter you talked about the non-re-occurrence of production issues in OE. Does this mean, it may not have just been in the quarter before, but when you look at this and you look at the operational metrics in the factories are you comfortable now you can flex up and down cost efficiently in Europe?
Chip McClure
As you know we had a real focus on lean manufacturing so I feel much better about the performance of our plants on that side but as we also indicated there was capital investment we need to do that’s going to be really coming in the second half of the year. As we look at the first phase as far as lean improvements within the existing capacity primarily our plants and current suppliers, yes I feel comfortable with that. As we indicated a lot of the capital investment we’ll really start seeing that come online the second half of this year.
Brian Johnson – Lehman Brothers
Final question, can you quantify your steel buy in terms of tonnage or dollar volume and of that how much is contractually passed through versus negotiated?
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