Question-and-Answer Session
Operator
(Operator Instructions) The first question comes from the line of Meredith Taylor - Barclays Capital.
Meredith Taylor - Barclays Capital
I am hoping you can talk a little bit about how we should think about margins in the fourth quarter in the Ag and Turf business. You talked a little bit about the 30% decremental for the year which suggests about 25% in the fourth quarter. Clearly the costs associated with the consolidation is a drag there but then how should we think about the drag from underproduction in that business and then from the boost of pension guidance, what the split is between Ag and Turf and Construction and Forestry.
Marie Ziegler
First of all let me address your second question. Pension guidance is a funding issue. It does not affect our accruals which are basically unchanged in our guidance. That is a funding decision. Regarding the drag from the change in inventory, it is fairly significant in the fourth quarter but maybe a better way just to help everyone cut to the chase here we are expecting our Ag division will remain profitable but that operating margin implied in our guidance is something around 1% so it is fairly low.
Meredith Taylor - Barclays Capital
Are there other issues other than the under production I should be thinking about in terms of drag there? Is there a mix issue that will be there as well?
Marie Ziegler
There is always a loss of but clearly the most significant item is very clearly the production changes versus last year when we were in a very strong up production mode and then you correctly guided earlier the repositioning charges.
James Field
I might just add when you think about Ag production in the fourth quarter of the year they are going to be shut down about 1/3 of the production days. Just to give you a sort of order of magnitude. They have some pretty significant shut downs.
Meredith Taylor - Barclays Capital
I appreciated the color you gave in terms of the U.S. and Canada versus the rest of the world. Maybe if you could just give some more color specific to the U.S. how much of a factor the transition to the new 8000 series tractor is in terms of the underproduction in the U.S. Then globally I would appreciate it if you could give a little more color on how we should think about Latin America versus Russia and Europe and just how to think about some of the geographies.
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