Good morning, everyone. Thank you for joining us today.

We always look forward to talking with our shareholders and we hope to inform you well and answer questions. We also note that we have many other stakeholders, including many employees on the call and our remarks are addressed to them, as well as we disseminate our second quarter results and commentary through our network.

With me this morning are Pat D’Eramo, Martinrea’s CEO and President and our CFO, Fred Di Tosto. Today, we will be discussing Martinrea's results for the quarter ended June 30, 2020.

I'm going to start with some brief remarks. After my opening remarks, Pat will take you through some highlights and give you his perspective.

Fred will review the financial results. And then we'll open the call for questions and we will endeavor to answer them.

Our press release with key financial information discussed on a fairly detailed basis has been released. Our MD&A and financial has been filed on SEDAR and should be available.

These reports provide a detailed overview of our company, our operations and strategy and our industry and the risks we face. Given the detail in our press release and filed documents, our formal remarks on the call today will be generally overview in nature.

We're very open to discussing in our remarks and we hope in the Q&A, some highlights of the quarter, the state of the industry to date, how we are addressing the challenges, anything about COVID-19 related issues and progress in our operations. As always, we want you to see how we see the world.

As for our usual disclaimer, I refer you to the disclaimers in our press release and file documents. Our public record, which includes an annual information form and MD&A of operating results is available on sedar.com.

You may look at the full disclosure record of the company there. So a few general thoughts.

First, a general industry comment. We’re all observers of COVID-19, the health issues, the economic hardships, the restart or rebound of our economy and so forth.

These are challenging times just as we saw and experienced with 9/11 and with the 2008, 2009 recession. As I said on our May call, from an auto industry perspective, there's really three phases to dealing with the pandemic.

First, the shutdown phase, which we now seem to be passed. Second, is the restart phase, which we have seen and it's gone pretty well for us as Pat and Fred will talk to.

This has been challenging for the industry but we've worked hard to launch as smoothly as possible by working on and implementing protocols to keep our people safe and actually ramping up successfully. The third phase is and will be rebuilding demand.

This requires a return to work restarting our economy fully and not locking down again. This has got to happen, not just from an economic perspective but from a social and health perspective.

And I think it's happening. From a macro perspective, our industry has endured the longest shutdown in its history and everyone has been affected.

Our team has responded well, not only in improving our company for the long-term but in our dedication to developing and implementing leading safety protocols and in contributing to the fight against COVID-19 by building ventilator stands and PPE, such as masks for our people and people in our communities. Just as with the great financial crisis of 2008 and 2009, we will be a stronger and more competitive company going forward coming out of the crisis.

It's in times like these that our focus on culture and our vision of making lives better by being the best we can be in the products we make and the services we provide comes through for us. We want to thank our dedicated employees for their great service, as well as our shareholders, lenders, suppliers, customers and governments for their hard work and support.

We believe that our industry has hit its low point in the second quarter and then for the future, we see growth in sales and earnings. The second half of 2020, we expect will be much better than the first half.

And while the rate of growth is still somewhat unclear, we expect growth in 2021 from this year's levels and further growth in 2022 and beyond. And now, here's Pat.

Thanks, Rob. Hello, everyone.

As noted in our press release, our adjusted net loss per share came in at negative $0.91, primarily due to the COVID related shutdowns during the quarter, down year-over-year from an adjusted EPS of $0.66 in Q2, 2019. $0.14 of the Q2 2020 per share loss can be attributed to the acquired operations of Metalsa.

Our adjusted operating loss came in at about negative $68 million or minus 14.9% of total sales for the second quarter in the range we expected, down from $84 million or 8.9% in Q2 of last year. Q2 production sales were $419 million, a 53% year-over-year drop compared to $898 million in 2019.

This includes the production sales contribution of $58 million from our Metalsa acquisition. Excluding the acquired Metalsa group, production sales were down about 60% year-over-year mainly due to COVID.

Total sales for Q2 was $460 million, including tooling compared to $949 million in Q2 of 2019. Our net debt-to-adjusted EBITDA ended the quarter at 2.64 times, up from 1.62 times at the end of Q1, 2020 and 1.41 times at the end of 2019.

Q2 2020 net debt-to-adjusted EBITDA ratio for bank covenant purposes was under 2 times, reflecting the new formula, excluding Q2 2020 EBITDA. As you recall, our bank syndicate agreed to eliminate Q2 EBITDA for covenant purposes treating Q2 as a unique one-time event.

Net debt increased quarter-over-quarter by just over $60 million from $715 million at the end of Q1 to $776 million at the end of Q2. Our adjusted EBITDA was down year-over-year from $138 million or 14.5% of total sales in Q2 of last year to negative $8 million or minus 1.7% in Q2 of this year, a near breakeven level which is a good result considering the COVID related headwinds we face during the quarter.

Q3 production sales are projected to be between $850 million and $950 million. Our adjusted EPS is projected to be between $0.40 and $0.50, a wider range.

So, based on current sales trajectory, we feel pretty good about the third quarter. Q3 guidance also includes the closed acquisition of Metalsa Structural Components business.

The acquired business is expected to be negative to earnings at this juncture. We expect the earnings profile will improve early next year.

Travel has been very restricted and has inhibited our ability to get key resources on the ground in Germany as originally planned. The travel started to reopen and we are now getting key people in place to continue the integration activity.

During the shutdown, we did make progress in a number of areas but the needed operational improvements in Germany were slowed during the shutdown. We're also happy to report new business wins totaling $65 million in annualized sales, including $40 million in the aluminum transmission housings with ZF Group starting in 2023, and $25 million in various lightweight structures for Ford and Toyota starting in 2022 and 2023.

Though there was some slowing of awards and delays of some programs, quoting remains high and we expect the normal cadence of awards to return over the next year. The second quarter has certainly been the most challenging the industry has seen in my 34-years in this business.

The impact on Martinrea was no different. It was the most difficult quarter in our 19-year history.

Despite this tough time, there have been a number of positive items worth mentioning. First, the response to the Martinrea leadership and team members was first grade.

We cut costs at warp speed, focused on cash management that will have positive lasting effects on the way we do business going forward. We took advantage of downtime and idled facilities by keeping key people in our locations, working on lean activity that will assure financial benefits going forward.

This includes line efficiency, resource reduction, new program activity, product quality level ups, as well as safety enhancements in our facilities. Based on the volumes that we are seeing, it is clear that the most difficult times are behind the industry.

Q3 production volumes are expected to be strong in North America as OEMs build vehicle inventory gaps relatively healthy and China is slightly softer in Europe. We currently see a relatively solid back half of 2020.

The inventories of many vehicles are low. A number of those vehicles are customers of Martinrea, especially CUV's, SUVs and trucks.

Some plants in North America and China are at or near capacity, and the current orders and releases are a pre-COVID volumes, which is good news for the industry. Despite some continued chatter of spikes in COVID cases in some areas, the idea of another shutdown is nothing short of ludicrous.

It is clear that the media hype has not been able to change that. The majority of our people are back on payroll and we have removed the 20% to 50% base salary deductions, though executive level deferrals will remain in place until the end of August.

We are back in our plan. We're back in our offices and in our labs.

We're back in the groove and we are moving forward at a fast pace and are very excited about it. I want to thank the Martinrea team for doing all that was necessary at this time, dealing with the shutdown, sacrificing pay while moving at light speed to protect the company and its future.

My appreciation is measureless. Again, many thanks.

Now I'll turn it over to Fred.

Thanks, Pat, and good morning. I hope everyone is doing well.

As Pat already noted, Q2 was a very challenging quarter for us and our industry for obvious reasons. Needless to say, I've been really looking forward to getting the second quarter behind us.

As the dust settles from the events of the past few months, we’ve been refreshing and get back to business, opening up all our facilities and doing what we do best and that is producing parts for our customers. Q2 sales are down significantly year-over-year during obviously by the industry wide COVID-19 related shutdowns in April and May.

As Pat noted, excluding the acquired operation of Metalsa, production sales were down 60% year-over-year, a substantial decline by all accounts. Volumes in all regions in which we operate were impacted during the quarter as in China.

Our manufacturing operations were suspended in January and February but resumed in March. A phased restart of our facilities independent functions outside of China commenced in May and June, and it's continuing into the third quarter as OEMs began producing vehicles again, replenishing currently low vehicle inventory levels resulting from the COVID-19 related production shutdowns.

Although, the pandemic is not over, we believe we have seen the bottom from a volume perspective. As we now look to the broader industry and economic recovery, however, that may shape up.

Along with sales, second quarter earnings were also negatively impacted by the COVID-19 related shutdowns. As Pat already noted, adjusted EBITDA for the quarter was negative $8 million and near breakeven level and our adjusted operating loss for the quarter was $68.5 million, representing a year-over-year decremental margin of 31%, 26% if you exclude the results from the acquired operations from Metalsa.

Overall, decent results considering the rapid dissipation of customer volumes and reflective of the aggressive cost cutting measures we took at the onset of the pandemic. Our response to the COVID crisis has been measured, prudent and decisive.

The team did a tremendous job at responding to the second quarter headwinds, and we got through it in good shape. It was nothing short of remarkable.

Q2 adjusted operating margins in all regions, again, except for China, were impacted by the COVID-19 shutdowns. North America and Europe both turned negative during the quarter on the lower sales volume.

Our operating margin in Europe was also negatively impacted by the addition of the acquired operations from Metalsa, specifically our new plant in Germany where over half of the Metalsa Group sales were generated during the quarter. Pat has already addressed the plans and outlook for the acquired Metalsa operations.

Notwithstanding, we continue to feel very good about the acquisition and its prospects for the future. Q2 adjusted operating margins in the rest of the world, inclusive of the two additional plants we acquired from Metalsa, came in at a healthy 12.9%.

Despite the COVID-19 related disruption in Brazil during the quarter. Overall, we continue to be very pleased with our performance in this segment.

Our Q2 adjusted loss per share was $0.91 as Pat noted. In addition to the COVID-19 disrupted operating results, the adjusted net loss for the quarter was impacted by a net unrealized foreign exchange loss of approximately $4 million, driven by some really drastic movements in various foreign currencies during the quarter and unusual effective tax rate given the last quarter and the addition of the acquired operations from Metalsa.

I expect the tax rate to normalize to some extent during the back half of 2020 be in the range of 27% to 28% inclusive of the acquired Metalsa Group. We also reported some adjustments during the quarter, as outlined in our Q2 financial statements and MD&A.

The restructuring costs, representing employee related severance, relates to reduction in our workforce globally in response to the COVID-19 pandemic. As Pat has noted in the past, we used the time during the COVID shutdowns to make the organization leaner.

We do not currently expect any further such costs during the remainder of 2020 but we'll obviously react to the market as required. The non-cash impairment charges reflecting the recoverability of certain assets are essentially a byproduct of the reduction in volumes and current industry production projections as a result of the COVID-19 pandemic.

We rely on industry vehicle volume projections, namely IHS and normal course project and budget our sales and cash flows, including for impairment and asset recoverability purposes. These industry volume projections are currently showing a reset in overall vehicle volumes from pre-COVID levels with volumes gradually recovering to near pre-COVID levels over the next few years.

We shall see how the broader recovery actually plays out. Notwithstanding based on the industry projections, the bottom from a volume perspective is clearly behind us.

Free cash flow, as defined in our MD&A for Q2 2020, was negative $47 million inclusive of $42 million in cash additions to property, plant and equipment, respectable result considering the COVID-19 related headwinds we faced during the quarter. We generated about $17 million in cash from working capital during the quarter, aided by a reduction in tooling related working capital.

We spend a lot of time on managing the cash burn from CapEx and tooling during the quarter and the Q2 results clearly show that. Again, the team did it great job and making cash management front and center of all our activity during the quarter as we navigated our way through the COVID related headwinds.

Based on current industry projections for the rest of the year, we continued to target a near breakeven free cash flow for 2020 but that is still a bit of a work in progress as we continue to assess the impact COVID will have on the market and work our way through our CapEx and tooling programs, which continues to be ongoing. In that regard, we are still targeting 20% reduction in capital spend in 2020, which was projected to be relatively flat year-over-year pre-COVID.

Due largely to the free cash flow profile for the quarter, net debt excluding the impact of IFRS-16, did increased by about $60 million during Q2. Net debt to adjusted EBITDA increased during the quarter to 2.64 times, again, a respectable result considering the headwinds and well below 3 times.

We believe we entered the COVID-19 driven downturn of the strong balance sheet, which has ultimately allowed us to navigate our way through the crisis with confidence. As at June 30, 2020, the company had total liquidity of over $500 million, including cash and cash equivalence and availability under the company's revolving credit lines.

As noted previously, the company's banking facility also includes $300 million allowance for asset based financing that the company can use for additional financing if required. Of which, $230 million was available as at June 30.

We believe we have ample liquidity on hand to get us through the COVID-19 related downturn. Overall, considering the magnitude of the volume declines and the consequent challenges we faced, we are pleased with our second quarter results and our response to the COVID-19 shutdowns.

We believe the worst is behind us as we now look to the future, starting with a respectable third quarter as our Q3 sales and earnings guidance indicates. Thank you for your attention this morning.

With that, I now turn it back over to Rob.

Thanks, Fred. I've said what I had to say.

Now, it's time for questions. We see we have shareholders, analysts and competitors on the phone.

So we may have to be a little careful with our answers but we will answer what we can.

Hi, thanks for taking my question and good morning, everybody. Maybe I could just start off on decremental margins.

Fred, you gave some good color on what you saw in the second quarter. Just wondering how we should be thinking about the back half of this year?

And then, if I look over to 2021, you've taken some restructuring charges so I suspect there's some permanent cost savings from there. And it sounds like Metalsa is start to ramp up in terms of some of the synergy opportunities.

How should we think about the incremental margins as volumes do start improving on a year-over-year basis in 2021?

Yes. Thanks for the question.

So in terms of the decremental margin, as I noted excluding the Metalsa, we were at 26% year-over-year for the second quarter. I think going forward that could be lower, I would say in the range of 20% to 25% on a decline in volumes, just given the fact in the second quarter the decline in volume was quite rapid.

So on our own more circumstances, we can react a little bit better. So I would say, 26% on the higher side and you can probably model something lower.

With that said based on our Q3 guidance, our sales are actually going to be up year-over-year in the third quarter and that includes Metalsa of course. So if you exclude Metalsa that's a way of looking at it.

And beyond the third quarter, there's still some uncertainty out there. And on the way back up, we expect the incremental margins to be consistent so that's the expectation.

We're not prepared to issue guidance beyond Q3 at this point, just given some of the uncertainty. But as we noted in our opening remarks, we believe the back half year will be strong.

And then we'll see once inventory levels are replenished what the market demand will look like and then at that point, we should be able to provide a little more color going forward on our margin profile.

And maybe just a second one from me, I appreciate that the timing of all this has changed given what we're going through, but if memory serves me correct, I think the original expectations were for Metalsa to be breakeven on EBITDA this year and then that being a $30 million EBITDA, a positive contribution next year. Just given all that you've gone through and you took swift action to reduce your costs and just look at line item.

Have the scope of the synergies or the scope of the synergy opportunities within Metalsa increased relative to maybe original expectations back in Q1 of this year?

Yes, Pat, I'll start. And if you want to add something after me.

Ultimately, in terms of Metalsa, you know what the original expectations are and then COVID hit. Timing wasn't the best.

We still feel pretty good about the acquisition. The integration activity it's followed during the second quarter and is starting to ramp back up again.

It's still dealing with some volume headwinds so we're still working our way through that. So if the volume eventually does come back and as we work our way through our integration activity, there's no reason why we can't get back to those original expectations.

It looks like it's going take longer than anticipated just given some of the volume outlook at this point. But we still feel pretty good about it heading into 21 we're targeting to be, as Pat noted, we're going to be a bit negative for the bet balance of this year, but we're targeting to be positive next year, maybe not to the original expectations but we'll continue to work towards that.

I can add in a little bit of color. Related to Germany, which was the area we needed to focus on the most operationally as I said, in my comments we weren't able to get resources on the ground.

Most of those resources were coming from North America. And unfortunately, because of all the flights and so forth were stopped we basically had a three to four month delay, probably closer to three, which we're now getting people on the ground.

But simultaneous to that in Mexico where we also had some challenges, we were able to address those during the shutdown for the most part. So that facility I think operationally has moved down the line a bit.

The Tuscaloosa plant, which is half empty really it was for us future program and kept us from having to build a new plant in Tuscaloosa for the EB2 that we won from Daimler. I visited that during the shutdown I got in the car and drove all over the U.S.

and that was one of the stops I made and that plant I'm very excited about the activity we have going on there, moving things and preparing for the new equipment. And the two plants in China are clipping along at a pretty high pace and the one in South Africa is pretty much on target.

So overall picture is pretty good but Germany being the biggest challenge was the one we were not able to get to as soon as we wanted but now we're back on track. And if you look at three months delay, four months delay and carry that in from the end of this year into beginning of next year.

Just to look at the Q3 guidance, so you're calling for 850 to 950 on production sales and $0.40 to $0.50 in EPS. I know you've referred to Metalsa being a slight drag.

But what are some of the other lingering items on the margin to think about as we're thinking about the way Q3 plays out?

Well, I mean, there's still some volume headwind in the third quarter in you exclude Metalsa. So are slightly down year-over-year if you back Metalsa out so is that to deal with.

But when you really break it down and I outlined what the expected tax rate was going to be, our margin profile if you exclude Metalsa is getting back to similar level to where we were last year in Q3, somewhere north of 6%, including Metalsa and then it'll be slightly higher if you back that out. So we feel, again, third quarter is looking pretty good right now.

We are obviously been helped by the fact that OEMs in North America in particular folks on replenishing inventory. So, we're seeing some good production levels come through on trucks, SUVs and CUVs in particular.

So based on that, we feel pretty good about what the third quarter holds and we'll see what the fourth quarter holds, but this production increase to replenish inventories we believe will likely end up expanding into the fourth quarter as well.

And then for Metalsa just like when we're looking at 2021, should that business -- should you be able to -- we should think about something better than breakeven for Metalsa in 2021?

That's what we’re targeting right now and again the volume outlook is a bit of a question mark. So I'll have to see how that plays out.

But again if the volume were to materialize as originally expected, the expectation is it'd be positive next year in Metalsa, maybe not quite to the $30 million of EBITDA that we were anticipating, it's going to take a little longer just given some delays in the second quarter. But the expectation is, is subject to the ones that we’ll be positive next year.

And one observation is the volume return is lagging a little bit in Europe, in North America. As we predicted, it's coming back quicker, because it's been more open, longer and Europe is just ramping up a little more slowly.

And that's an important point. I mean, we are -- like North America, the volumes are quite strong right now but Europe is lagging so it is softer there.

And then just in terms of some of the impairment charges taken. Are you able to just give a little bit of more information like what type of programs were these charges tied to?

And I know that you probably don’t want to get into platform specific or anything like that, but just perhaps a little bit more information there?

I mean, we don't test at that level. But in light of COVID and COVID essentially created a triggering event to assess the asset recoverability.

So we did a full in-depth analysis. As in my opening remarks, we rely on industry projections and namely IHS so we layer that on into our pre-COVID expectations and it's showing a bit of reset in volumes.

Sooner or later that end the byproduct of that was essentially some massive impairments in a few different spots in the organization. We'll get into this program specific and so forth but some of it is generic equipment as well.

But that was as simple as that it was essentially model out based on industry projection is driven by IHS. Now, they may be right, they may be wrong, we'll see how the recovery plays out.

But what those projections clearly show to me is that the bottom is behind us and that we're on a recovery phase at this point.

And what would happen if the recovery volumes came in better than those IHS forecasts from some of those platforms?

We'll have to reassess it at that time. But under IFRS and so under old GAAP, you'd write down assets and it'd be permanent write down under IFRS you have to reassess on an ongoing basis.

And then there potentially maybe some write-offs at that point. We'll have to gauge you when that time comes.

This is Chang filling in for Peter. My first question is, did you guys capitalize on the government wage subsidy programs that were available in certain countries?

And if so, what was the impact in Q2?

Yes. We did in a couple of spots or a few spots in the organization and we disclosed in our financial statements.

So the total amount was about $28 million. But I want to put some context around that, because in my mind the, “benefit”, to the company is not really significant.

The majority of that, related to what I referred to as inactive employees. So essentially those are employees on layoffs, are not working for the company but still on our payroll.

So those amounts are generally pass-through in nature. And related to employees are not actually working for us and being productive.

And in Canada particularly actually strategically brought people back on our payroll after layoffs to kind of take advantage as programs, so that our employees would benefit from a higher amount compared to EI reserve. And as relates to the amounts received for active employees, which is a smaller amount, I still don't see as much benefit to the company conceptually when a company knows it has a stream of cash, it makes certain decisions around cost structure.

So conceptually, if know this cash is coming in you may not cut as deep and that was the whole premise around the Canadian program to avoid further layoffs. So it's really a frame of reference.

So disclosures in the financial statements but we don't see that as being a huge benefit to the company, because a lot of it was pass through in nature.

But we do think it was a benefit to the employees in that sense and so the reason, and we are actually involved with helping to set up at least a Canadian program so that our people that were on layoff could actually benefit from it and make more than they otherwise would. And I think in that sense when you saw this all over the world, whether it's in Germany or the U.S.

or Canada, governments wrote big checks to try and alleviate the strings of lockdown. I think that it was certainly welcomed by the recipients in that sense.

But our overall view and I think Pat mentioned and I mentioned it's now that we're getting back to work, we recognize that all these things are future taxes for us and let's get let's get moving.

And I mean, Rob, we like the programs. I mean, a big part of that was also in Germany and they're systemically set up that way where the benefits flow through the company.

So that's normal course. To some extent there was some enhancements to those benefits because of COVID but ultimately speaking it's something that allowed us to navigate our way through and make certain decisions, but a “benefit” to the company and our decremental margin I don't see a huge impact.

And going forward, what is your intention in regards to the NCIB?

So the NCIB, which is the normal course issuer bid, ends in August, I guess in a couple of weeks. We suspended it basically in the second half of March when COVID was hitting and said so at the time.

So we're not renewing it this August but we'll revisit that as we go forward. We want a little more clarity ultimately in the context of M&A and M&A opportunities, which I think do exist and we've taken advantage of an M&A opportunity.

One of the questions we asked ourselves is the best acquisition reinvesting in our own company. And that's the type of question that we'd ask when we're looking at that.

And so stay tuned for further notice. But you will not see a press release in August saying that we're renewing our normal course issuer bid certainly something we consider in future.

Hi, this is jazz filling in for Brian. In terms of the workforce reduction and your ongoing optimization strategy.

Is there any color you guys can provide on what the margin progression will look like in 2021?

Yes. I'll provide some comments and Pat, if you want to provide some commentary as well.

I mean ultimately, we took this opportunity given the shutdowns to kind of lean out the organization. And Pat has noted in the past that with these reductions with a smaller workforce, we'll still be able to [Technical Difficulty] with the pre-COVID levels.

So from that perspective, it's a good thing. I think activity will serve to help our margin going forward, but some of the stuff was also just pushed forward.

So we're able to do it earlier just given that the fact that we have some time, so not necessarily incremental. But ultimately to help us deal with the next number of quarters and depending on the volume plays out and help the margin kind of work its way through there.

Yes. I think you pretty much nailed it, Fred.

I mean, these were in a lot of cases, plans that we had in our outlook for improvement. I think the key point here is we didn't wait four months to get back at it.

We went ahead and moved forward, some quicker than we would have otherwise certainly. But overall, these numbers are numbers that we had projected out in a lot of cases.

And then also, I don't know if there's any color you can provide on your CapEx outlook for 2021?

We're just going through that at the current time. So I'm not ready to do that.

We've started an annual business planning process. And as I noted in opening remarks, we're still working through tooling and CapEx programs for this year and that will obviously impact next year.

So there's been some delays in some programs, no major cancellations which is a positive thing. So we're trying to understand and engage how that kind of plays off before I can provide some commentary for next year.

Hey, good morning guys. Thanks for taking my questions.

Well first off, I think you guys did a good job managing through the quarter, protecting the balance sheet, protecting the business. So good job on that.

I guess just first, maybe just the first question, you just sort of touched on this last question, but on this cost take out, just make sure I'm understanding, again, there were some structural costs taken out of the business, but it was stuff that was sort of pre planned and it’s just moving forward. Is that the best way to sort of think about that?

I would say, generally speaking, yes, it wasn't all that. But again, we just use the time to accelerate some of our OpEx activities, lean activities, just to lean out the organization.

So that's probably a good way of looking at it.

Yes. I would say, it was that combined with, as part of the integration of Metalsa, we had targeted certain numbers of reductions and we were able to move on those as well.

The other thing that we learned and I think it's going to be interesting in our environment, not necessarily just automotive but just in general. When everybody's working from home, you really start to weed what you need, what you don't need and we did find some opportunities that we, and not huge numbers but certainly opportunity that things we really don't need to do this.

And so we were able to reduce some resources along those lines as well.

For the, I think you said the target for the year of free cash flow of roughly breakeven. I’m just trying to do some quick math on the fly here.

But I think that would suggest working cap is relatively neutral for the year, maybe my math is wrong, but at least the back half where I would have thought it would have been maybe bigger investments just given the ramp up. But I guess is that sort of how you're thinking about the second half in terms of the working cap or no?

Yes. So based on math, I mean, we're going to have to actually be slightly positive in the back half to get to breakeven for the year.

Working capital is a bit of a moving target. And again, the tooling piece is always volatile and we're still working our way through that.

And we continue to spend a lot of time and trying to manage the CapEx spend as well. So, that's going to be ongoing and continuing for the rest of the year.

And I'm expecting to, some positives that comes out of that activity like we saw in the second quarter. So, we're working our way through it and that's -- for the company internally that's the target at this point.

Maybe I can ask the 2021 CapEx question another way. The last couple of years you’ve been [Multiple Speakers].

For the the last couple of years, you've been trending around $300 million, presumably next year industry sales are -- you're still below where you were 2018, 2019, it takes a couple years to get there. So I guess our thinking that CapEx is still down, but maybe there's some deferrals this year that we need to slip into next year.

So just again, sort of just directionally like, should we be thinking somewhere between sort of 2020, 2019 CapEx or, again, you can just tell me no comment?

Yes. I'll provide a little bit more color.

So you're right. I mean, there may be some deferrals into next year from this year, so that will have an impact.

But pre-COVID, we were on -- our CapEx levels are on the decline. And in part because we had a heavy investment cycle on our own group and a lot of that is starting to be behind us.

So that should slow down to some extent. And then also the benefits from our flexible line designs that we've been talking about the last number of years, we're starting to get into second life cycles or in the next couple of years on some of these programs.

And what we'll see and we'll find is the CapEx investments for those next gen replacement programs will end up being lower. So I would say we're on the decline but you may have some deferral.

So I'm generally speaking. And also the other thing is I want to see what sales look like next year and cash flow and so forth and obviously make adjustments accordingly.

But I like -- it’s obviously be down next year year over year and we'll continue to kind of work towards that. Hopefully that helps.

Maybe just one last one then, just based on the Q3 guide. Obviously, sounds like things are going pretty well and you guys have touched on this.

But I'm just curious just generally how the ramp has gone at Martinrea, any sort of material issues, anything with suppliers, just anything noteworthy and that's it?

So overall, it's gone exceptionally well. The first few weeks as we've noted before were a little bumpy for the industry.

But as we got reports, even had a report from one of our larger companies this morning, OEMs this morning reporting how they're performing, which basically they have 100% of their facilities up. And the supply base seems to be pretty strong.

So is there issues with supply? Yes.

I mean it's touch and go on a few spots but nothing that's been significant so far. Certainly, some of the tier two suppliers have to be pretty stretched on cash.

And so there's a little noise out in the system. But so far we've not been inhibited by our supply base.

I think probably the most challenging thing we've run into is in the U.S., which is true with both our customers and other suppliers is with the government incentives some areas in the U.S. the workers are making is not sitting at home as they are working and that's inhibiting the industry a little but we're still managing to get by so far.

Otherwise, it's been, I won't say a pleasant surprise, but I'm very happy with where we're sitting and how we got here relative to the start up.

Well, thanks very much. Thanks everyone for calling.

I think that you will see, we all say that we want you to see how we see the world. We think auto is a good story.

We think this is a good story. Never let a good crisis go to waste.

Remember this is an industry that shutdown completely. We knew that we had to restart safely and successfully.

I think that we've done that. I think we've been at the leading edge of basically rebounding the economy, our country -- our company and also our sister suppliers and OEMs.

So if you want to look at how to try and rebuild an economy, I think our industry is getting an A plus for how to keep our people safe and move forward. For all of you that are in lockdowns and so forth, I urge you to get back to work.

Have a great day. If any of you have further questions or would like to discuss any issues concerning our company, please feel free to contact any of us at 416-749-0314.

Thank you.