“I'd say, from the underproduction -- underproducing in Brazil, which we planned on and we're executing on in the first quarter and then Europe, that's probably about 1 point drag of operating margin for production precision ag.”

In context

“doing that in North America this year. Some of the changes that Josh mentioned will impact what we're doing in North America tractors and combines. But again, a proactive approach and trying to be really mindful of knowing the sooner we see these things, the more quickly we're able to make changes in our factories. Operator: Our next question will come from Kristen Owen with Oppenheimer. Kristen Owen: Someone have a follow-up to the first here is just helping us contextualize the headwind that you're assuming from that underproduction in Europe and Brazil, how much of the guide difference is related to that underproduction versus some of the incremental North America mix and effects that you've outlined? Josh Jepsen: Kristen, it's Josh Jepsen. Good question. If you look at the change, I'd say, from the underproduction -- underproducing in Brazil, which we planned on and we're executing on in the first quarter and then Europe, that's probably about 1 point drag of operating margin for production precision ag. So that's a decent piece of that. And then as we noted, we've seen just a little more shift in demand in North America, but about 1 point on that underproduction. I think important to note here, when we talk about underproduction in Brazil and some of the challenges that we faced last year coming into this year, in spite of that, we're seeing in our South American business, still really strong performance. And I think evidence of structural profitability improvement across the company, but even underproducing there somewhat significantly, we're doing mid-teens margins in the region. So we feel good about what we're doing there, the shifts and changes we've made to our business. And again, that's mid-teens margins while underproducing and making sure we're getting inventory in the right”