Question-and-Answer Session
Operator
Thank you, sir. (Operator Instructions) We’ll take our first question from Howard Rubel. Please go ahead, sir.
Howard Rubel - Jefferies
Thank you. Good morning.
David Berges
Good morning, Howard.
Howard Rubel - Jefferies
Nice – I mean, gross margins were okay, all things considered. You seem to have done a nice job of being able to eliminate some of the operating leverage that’s hurt you in the past with sales declines. What did you do? And then related to that, Dave, you kind of talk about normal margins there, are we sort of targeting 24 to 25%?
David Berges
Let’s see. The first question, what did we do? Strike or a sudden stoppage, it’s pretty difficult to shed costs when you know things are going to come back, and it’s unexpected and it was longer than we expected. But we took out a bunch of people on a temporary basis. We tried to globally cut back on all the usual things that anybody does when they are in trouble. And we had some improvements in plane performance. You might recall in the second quarter, we were talking about having a pretty big past due position or backlog to our customers because of capacity constraints. Our capacity gradually has been coming on line.
The strike helped us work down the backlog, so some of the premium costs that we’ve been punishing ourselves with over the last nine months diminished. Obviously, a little bit less pressure on some of the oil commodity and materials prices. So things started to look a little better in the fourth quarter, but it’s real hard to tell exactly what the net would have been with the anomaly of the strike in there.
Your second question, Howard?
Howard Rubel - Jefferies
Well, kind of related to that is you talked about sort of at some point normal kind of – you talked earlier your comments about normal gross margins and it would seem to me that you’re sort of trying to target in the 24 to 25% range, is that still a fair??
David Berges
Well, it certainly sounds like an interesting target. I’d think for 2009 that’d be pretty aggressive if we don’t have the growth, principally because the incremental operating costs of the new plants. So we’ve obviously got the three that we talked about before. Now, in addition we have China and by mid-year we’ll have Colorado. Until those plants are up to serious volumes, some of them even require additional lines to support the future growth. They are going to be a bit of a drag on our margins.
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