Question-and-Answer Session
Operator
(Operator instructions) Our first question will come from Ingrid Aja with Merrill Lynch.
Ingrid Aja – Merrill Lynch
Good morning.
Gordon Hunter
Good morning, Ingrid.
Ingrid Aja – Merrill Lynch
Wondering if you could tell me a little bit more about the pricing pressures that you may remarked on in your prepared remarks. How much extra pricing pressure do you see? And how much of that is baked into your guidance at this point?
Philip Franklin
It's a tough question looking forward. I think if we look back to the most recent quarter, the price erosion and the price pressure has been pretty similar to what it was in the earlier part of the year and even back into last year. Going forward, it's a hard thing to gauge, particularly with commodity prices coming down and other things coming down and also volumes, the expectation would be that there should be – that there probably will be some additional price pressures. And we have baked some amount of that into our guidance. But we're not expecting that – I mean, we typically see 5% or so price erosion in electronics and 2% to 3% in automotive. While that could tick up modestly above those numbers, we don't see it going dramatically higher than those.
Ingrid Aja – Merrill Lynch
And you think with the electrical business that you're not going to be able to continue with the price increases that you've been able to?
Philip Franklin
I think it's pretty safe to say that we won't be able to continue at the levels that we've had over the last year or so, some of which were justified and rationalized by price increases in things like copper that were pretty significant. With those prices going down, it's clearly going to be tougher to put through price increases in the electrical business. So, yes, I would say that's a safe statement.
Ingrid Aja – Merrill Lynch
Okay. And then, on the transfer costs, since you're slightly ahead of schedule, do you see that rolling off more into Q4 than you originally expected?
Philip Franklin
I don't think – you mean getting more benefit in Q4?
Ingrid Aja – Merrill Lynch
Right.
Philip Franklin
Not – I don't think so necessarily. We have pulled a few things ahead, but we're still going to have substantial transfer costs in the fourth quarter as well although we will start to get some savings benefits in the fourth quarter from some of these programs that completed a little bit early. So I would say net-net not tremendously different than what we previously thought. But fourth quarter from the cost of the transfers and savings from the transfers perspective should be somewhat better than the – or the fourth quarter should be better than the third quarter was, and then it should get consistently better and pretty significantly better as we start to roll into 2009.
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