Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from John Walthausen - Walthausen & Co.
John Walthausen - Walthausen & Co.
When we look at the North American automotive business, you’ve completed the consolidation ahead of schedule; that’s great, but should we expect the few quarters where we’re starting to actually gain the efficiency from that or does it seems like we should hit the ground running?
Dale Barnhart
Well will see obviously the fixed cost reduction as a result of the restructuring immediately. Well will start, the efficiency will ramp up as we go forward. Right now, all the manufacturing equipment has been relocated to Hamptonville from St. Johnsbury. All of the parts that have to go through PPAP or requalification with the OEMs have been completed. As of two weeks ago, when I was in Hamptonville, we were actually producing some products for GM off the equipment. So it is starting to ramp up.
John Walthausen - Walthausen & Co.
The third quarter is often a quarter where we have some new product launches. Do we have any significant ones that will challenge as Hamptonville? Then I guess the other part of the question is, you were somewhat ambiguous about the way you talked about Ford having some new product launches and you’re seeing more approvals from the transplant, but I didn’t know whether that meant that was translating into some actual new production parts in the close-in future.
Thomas Smith
Ford will actually have a positive benefit in ?09. There is some pickup in the transplants in ?09, but most of that’s coming out past ?09. The key, John, is we are now qualified as a Tier one supplier at all the key Asian transplants and we are starting to ship products. We want some significant applications at all of them starting in 2010 and 2011.
John Walthausen - Walthausen & Co.
Finally, is there any update on the membrane business?
Dale Barnhart
Membrane business is going pretty much as planned. We’ve put our people in from North America. We have the General Manager running that business now. Our target was to have four air filtration membranes qualified and ready for sale. Three of those four have been developed.
We are now going through all of the detailed application work with the air filter manufacturers to get the product qualified. So it’s got to be in excess of 15 customers right now sampling the product. So we’re very comfortable with how that’s progressing at this time.
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