Good afternoon, everyone, and welcome to our second quarter conference call. Joining me this afternoon are members of my executive team, Jim Zirle, Dale Schneider, Roger Fulton, Mark Stoddard as well as members of our corporate IR, marketing, finance and legal team. If you can advance the slide. Before I begin, I will draw your attention to the disclaimer that is currently being broadcast. Okay, I'm going to start off with an update on the COVID-nineteen crisis and Linamar's reaction to such.
So as you know, we took a four step approach to dealing with COVID nineteen, assemble a team, gather data, make a plan, execute on the plan, and of course, broadly throughout. And we have continued to make excellent progress in this regard. Our focus right now is very much on the next phase of this crisis, restarting, rejuvenating, and recovering. First and foremost, we are determined to create a work environment where people feel and are as safe or safer coming to work than not coming to work. More than 90% of our employees are now back at work, which is great to see.
We have had a few positive cases pop up, which is to be expected given the easing of restrictions broadly. The key is to stop any chance of the virus spreading within our facilities and I believe we are doing a really good job of that. We've had no serious outbreaks in any of our plants. We're learning as we go, of course, and adjusting our protocols as required to address any concerns that do pop up. At the same time, I think it is really important for us all to play a role in rebuilding confidence to spur our economic recovery.
Confidence in our ability to work safely, which we absolutely are, in the economy to weather the storm and governments to manage the debt incurred and trying to mitigate the personal and economic impact of what we've experienced. Our safe work protocol is based on five key principles: screening, PPE, including masks and or face shields, distancing, increased cleaning and hygiene, and contact tracing. We are regularly surveying our employees as to how safe they feel at work and the adequacy of the safe work protocols and have had great consistently strong scores for both metrics since we have started doing so. If there's a concern in any one plant or any one region in terms of how people are feeling, we can quickly focus in on that through this data that we're gathering, which does allow us to drill down by region and by plan. We're making excellent progress on the cash management and cost control aspects of our Linamar Health Scripts Action plan as you see with our second quarter results.
Capital spending was cut by more than 80% in the quarter to just $24,000,000 and we implemented cost savings of more than $30,000,000 realized just in Q2 alone. Our global cost team has identified and implemented nearly $30,000,000 of annualized savings, and every plant group and region has implemented significantly more savings in their areas as well. In terms of our balance sheet, we continue to be in a very strong position thanks to the success of our cost and cash initiatives. I'd like to point out that we have not lost focus on these areas as we believe there is still a lot of uncertainty out there and now is not the time for us to become complacent. We look in detail at forecast at least two quarters out every single week on sales, earnings and cash and we stress test to ensure we're aware of any potential weaknesses.
We've run stress models in which we model another two month shutdown, which by the way we feel is very unlikely to happen, and others where we cut output significantly for the remainder of the year. In both cases, we remain profitable for the year, generate cash for the full year and do not breach our covenants. We do not have any debt maturing this year. We early paid a private placement note in the quarter that was due fifteen months from now from a risk mitigation perspective and to take advantage of lower cost current borrowing rates. Dale will provide more information for you shortly on that transaction.
Here you can see the stress scenarios I described which basically cut in half current expected operating earnings levels and as noted still leave us profitable, still leave us generating cash and not breaching any covenants. Another key area of focus for us, of course, has been community support. I think we've done an excellent job in rapidly retooling lines for ventilator components and full assembly production. And I think it's just a great example of Linamar's innovation, our responsiveness and our flexibility. We were in part production on several orders for ventilator parts within two weeks of the first phone call.
We were assembly ready to build the UV disinfection unit for clean slate in just four weeks, and we were assembly ready to build our ICU in a box integrated ventilator and life support systems for thorn ill, comprised, by the way, of 1,700 different components in only six weeks. How did we manage to do that? Well, we were able to do it because we are a remarkably agile, flexible company, both in our management style, in our engineering and supply chain management capabilities and in our actual equipment, which can be easily and rapidly retooled to new programs. We are technically incredibly deep. Our team is fantastic and it's adaptable and our lean manufacturing skills are transferable.
Now I'm blowing this horn a little bit because we're often questioned and challenged about how Linamar will handle a changing landscape of design and technology in the fields in which we focus. Linamar is an advanced manufacturing company through and through. We can design and manufacture products for all kinds of industries and do and will continue to do so long into the future regardless of where technologies take us. We see technology change as only one thing, opportunity. And we will, as we always have, chase those opportunities down and continue to prosper.
We're at various stages of completion for these different products. For the component work for GM, ZOLL and O2, are complete or nearly complete. For Thornhill, we've built about 100 units and we have we will have the full order of around 1,000 units complete within a few months. There is some potential for additional volume on this product as well. Similarly, we've built around 100 units for the Clean Slate disinfection system and we'll continue to ramp up on production there as we get into the fall.
Okay. With that, let's jump into some of the specifics around the quarter, starting with sales, earnings and content. So sales for the quarter were $924,000,000 down 56% from last year. The pandemic, of course, was the key driver of our results, having cost us an estimated 1,130,000,000.00 in sales in the quarter and an estimated $345,000,000 in operating earnings for decremental margins of 31% at the OE level. Lower agricultural expected, put a bit of a drag on the quarter as well.
All of that was mitigated by some fantastic cost savings execution by our team. Launching business on the transportation side also helped as to some extent did some government support programs around the world. If I strip out COVID related sales, earnings and any of the subsidy impact, we did actually see margin growth in both the transportation segment and overall, thanks to this great cost saving work that was done as well as launches. Overall, EBITDA as well remained positive despite the pressures from the pandemic with double digit margins. In North America, contract per vehicle for the quarter was $192.74 up quite a bit over last year with customers we have a heavy weighting with also seeing the biggest market share gain.
The story in Europe and Asia is the same with content per vehicle growth for the quarter in both regions at $86.53 and $14.11 respectively. Production levels were down dramatically in each market, most significantly, of course, in North America and Europe, given the lag to China. China was still down, but recovering from a tough Q1. Global content per vehicle was down a little, which isn't a surprise. We're most heavily weighted in our auto business in North America and Europe, which saw the biggest production decline, thus disproportionately impacting global content per vehicle.
Commercial and industrial sales were down 54% in the quarter due to lower Skyjack sales on global markets down nearly 50% as well as lower MacDon sales on soft agricultural markets. The Draper header market was down in double digits over last year in Canada, where MacDon had strong market share. These declines were partially offset by great market share growth for MacDon in Europe and CIS. In fact, MacDon sales in Europe in the first half of this year were up 86% over prior year levels despite the market being down. This has been a key strategy of MacDon since our acquisition, and it's great to see them delivering on it so strongly.
Rapidly cutting back on CapEx was a key priority in the quarter given the headwinds faced, of course, due to the pandemic. As noted, CapEx is down more than 80% compared to last year at $24,000,000 and we intend to finish the year with CapEx down at least one third from last year. And as already mentioned, we saw another strong quarter of free cash flow despite weeks of no receivables following customer shutdown. We saw another $170,000,000 of cash generated. We paid down debt and we kept our liquidity at 1,100,000,000.0 In fact, we have paid down nearly $600,000,000 of net debt from where we stood a year ago despite the pressures of the pandemic.
Leverage turned up somewhat to 1.8 times EBITDA due to that soft EBITDA. Q2 will be the peak quarter for leverage with the ratio improving already in Q3 under current forecast. Free cash flow is something Lindamar is quite good at managing. We've seen strong free cash flow over the last five years and expect to see positive free cash flow this year as well. In addition, we are seeing strong levels of free cash flow yield.
Our strong balance sheet and liquidity mean we have the ability to weather the financial impact of this situation over the next couple quarters in a way that a lot of suppliers will not be able to. This means we will have the ability to take on takeover work or potentially acquisitions as they arrive and drive even more market share growth to mitigate soft markets and accelerate future growth. Turning to our market outlook, we are seeing markets down across the board this year, which shouldn't be a surprise. Industry experts are predicting steeply declining light vehicle volumes globally this year to 12,600,000, fifteen point nine million and thirty seven point three million vehicles in North America, Europe and Asia, respectively. It's expected each market is going to see a strong double digit recovery in 2021 as I'll show you in a minute.
On highway medium heavy truck volumes are predicted to be down significantly in all markets this year with growth in most regions next year except Asia. In the access market, the industry is predicting significant declines globally this year, but most notably in North America and Europe where the market will drop as much as 50% with the COVID-nineteen pandemic adding significant pressure to an already soft year in terms of demand. Next year should see some growth resume although it is difficult to predict at this point in time. In the agricultural market, the industry expectation is for declining combined draper header markets in the double digits this year in North America thanks mainly to a tough harvest last year as well as tariffs and political backlash that is hurting North American farmers and dampening demand particularly in soybean and canola and particularly in Canada. The European and CIS markets are also expected to decline this year although Australia may see some improvement and South America likely to stay fairly flat.
The ag market seems to have not been adversely impacted by the current pandemic. Our market expectations are basically unchanged from our expectations going into the year. Macron continues to build market share in its international markets, most notably in Europe, to partially offset global market declines, as I just mentioned. But nevertheless, we will see sales down in double digits at MacDon this year with growth resuming next year. As noted, almost all of these markets bounced back meaningfully in 2021, if you look pretty much across the board.
On the auto side, you can see an increase in 2021 in every region globally after a very tough, obviously, 2020. Now not surprisingly, 2020 is expected to be the trough for global production levels at nearly $70,000,000 $69,500,000 Q2 of this year will, of course, be the low point in production from a quarterly basis with production expected to bounce back up over Q1 levels in Q3, although still shy of last year's Q3. Production recovery, of course, drives from consumer demand. You can see here, I think we may be one slide ahead, if you could just go back a slide. And one more.
Yes. Nope, if we can go back to the consumer slide with the consumer okay. Yep. So sorry. We seem to be off a little bit on our slides.
I had a slide that showed consumer demand and how that was reacting in China, in North America and in Europe. So I'll just talk through it a little bit. I apologize that it's not displaying on the screen at the moment. So this is for our auto business. So in China, the consumer retail demand was quite negative right out of the gate.
China was quite sharp and deep in terms of the reaction, but then quickly bounced back up well over last year in terms of vehicle demand and consumer demand, which for the last few months has actually been in the double digits. Europe's curve is deep but broad, with low levels of demand lingering for much longer, although we did just see July numbers out today, which is basically back up to twenty nineteen levels. In The U. S, the curve is a lot shallower. It only went down half the level that we saw in Europe and in China.
It is taking a little longer to come back up, So it's broad like U. But it didn't go down as deeply. And actually, July was only down 12% to prior year. So not nearly as big a drop in North America, which is great to see. Not surprisingly, this is driving higher production levels at the moment in North America and also in China, and should bode well for European production when we get back from shutdown in a few weeks as well.
So on this slide, you can see the changes to both Q2 and Q3 from what was predicted last quarter in terms of global light vehicle production. Q2 basically turned out exactly as predicted, although lighter production levels for Europe were offset by stronger than expected levels for Asia. Q3 is expected to be just like marginally down from last quarter's estimates, mainly dropping out at a little bit less production in Asia Pacific, offset by a little bit stronger production in North America. It's very consistent to what we're seeing in our customers' behavior at the moment as well. This slide illustrates where volumes are now predictive for both 2020 and 2021, both of which are again basically very consistent with expectations last quarter, tiny changes as you can see.
I think it's really good to see that these predictions have leveled off and not continuing to degrade as frankly we've seen happen pretty consistently over the last couple of years. In terms of patterns of correction in North America, this correction fits a standard level of reduction that we've seen historically, which is great news. So although COVID-nineteen did accelerate this change painfully for us, it does mean we can now look forward to volumes starting to build again. So looking in more detail at the access market, you can see on the right hand graph the sharp declines in both North America and the European market June year to date, that's the blue bars is the actual year to date. Predictions for twenty twenty full year as of Q2 are represented by the gray bar, which as you can see for both North America and Europe are roughly 50%.
And a little bit changed from the orange bar which was the prediction for 2020 in Q1. Asia has a more positive outlook but is also a smaller market and one that we're just getting established in. So we're definitely more affected by the North American and European markets. On the positive side, equipment utilization levels were trending up in North America certainly as we got into the summer. In fact, in June, utilization levels of equipment were at 93% of what they were in June 2019, although we have seen some softening in that regard in July.
Here is a little more detail on the agricultural market. You can see North American combine retails trending up in Q2 after a tough first quarter. But notably most of that is driving out of The U. S. Canada is down 31% year to date and down 26 in Q2, whereas noted, Veraclon has dominant market share.
Okay, turning to an update on growth and outlook. You will be pleased to know that we have had a solid quarter in new business wins despite not being able to physically visit our customers. I will highlight a couple of our more strategic wins in a moment. Electrified vehicles, I'd like to point out, continue to provide great opportunities for us. You can see a steady build in our global content per vehicle for both battery electric vehicles and hybrids as a result of recent wins.
The lines of internal combustion engine, battery electric vehicle and hybrid global content per vehicle are converging, which of course is the goal. Now interestingly, our content per vehicle and electric vehicles is now predicted to surpass that of hybrid vehicles a few years out for the first time with continued solid wins in that market seen in the last couple of quarters. And also importantly, our global content per vehicle for battery electric vehicles in only three years is actually equivalent to what our global content per vehicle for internal combustion engine vehicles is today, which is fantastic news. Our addressable market across a range of vehicle propulsion types continues to look excellent with our total addressable market for us today with around $80,000,000,000 growing to more than 300,000,000,000 future, an increase of more than three times. We have recently updated this analysis to include additional content potential for battery electric vehicles, fuel cell electric vehicles as well as hybrids.
And as you can see, the market potential for each is really starting to even up. This is largely driving from the higher potential content we now have in the battery electric, fuel cell electric as well as hybrid vehicles, thanks to continued product development efforts such as the assembled battery tray we talked to you about last quarter as an example. In fact, our potential content for battery electric, hybrid electric and fuel cell electric vehicles are now equivalent, in fact, a little higher than the content potential we have for internal combustion engine vehicles, which is great to see. Our launch book is solid and expected to peak at more than $4,300,000,000 in sales, thanks to new wins this last quarter. We saw a shift of $100,000,000 of programs that moved from launch to production last quarter.
Launching programs continue to mitigate market declines despite some delays. As usual, we are summarizing all of these market expectations and changes on our outlook slide that's now being displayed. Obviously uncertainties about the coming months are still making it difficult to be very specific about our expectations. What we can say is we expect significant double digit declines in both sales and earnings this year. But we do expect to be profitable overall and in both segments.
And 2021 should see strong growth on rallying markets and of course, solid expansion on the margin side. We expect to maintain leverage levels well under two for the year and improve significantly from that level in 2021, and we do expect to generate positive free cash flow in both years. Looking specifically at Q3, the COVID-nineteen pandemic will certainly continue to impact our results, but we should see steady improvement. As noted, North America and Asia are nearly back to pre global COVID forecast levels, and the EU is improving. That said, the industrial segment has not yet shown signs of bouncing back and frankly is not normally better than Q2 and Q3 in any case.
So I will add as the lawyers insist I do that impacts from COVID-nineteen outbreak are currently not fully understood or determinable in terms of their impact to all segments at this point, so of course risk remain. But that said, if current market conditions persist, Q3 should see a meaningful improvement back towards Q1 levels for both sales and earnings. So I'm going to finish up highlighting a few of our more interesting wins this quarter, which were notable again mainly for electrified vehicles. So first, we picked up a package of e axle gearbox components for a battery electric vehicle in the quarter representing a meaningful level of annual sales. This job is for a new entrant into the battery electric vehicle space.
They're headquartered in The U. S. With a great and innovative vehicle design and concept. We are excited to again be expanding our portfolio of battery electric vehicle customers. Secondly, we were awarded a significant camshaft assembly job in the quarter.
The design is very innovative and meant to drive much lower emissions in an internal combustion engine design. The job will launch from one of our Guelph facilities and is substantial in its revenue potential as well. And finally, a win for hybrid electric vehicles. This one is in China. It is for a balanced shaft module, a key product for smaller sized engines which are often used in hybrid design.
And the Battleshaft module is key to reducing noise, vibration and harshness in those smaller engines. So an interesting growth product for us in hybrid vehicles. So with that, I'm going to turn it over to our CFO, Dale Schneider, to lead us through a more in-depth financial review. Dale, over to you.
Thank you, Linda. Good afternoon, everyone. As Linda noted, Q2 was significantly impacted by COVID-nineteen as expected given the shutdowns that occurred. Despite these impacts, it was a great quarter for cash generation as we generated $170,500,000 in free cash flow, which brings the year to date total to $317,600,000 Additionally, we were able to maintain our strong level of liquidity at CAD1.1 billion, which is unchanged from December 2019 levels. For the quarter, sales were CAD924 million, down CAD1.2 billion from CAD2.1 billion in Q2 twenty nineteen.
Earnings are normalized for FX losses related to the revaluation of the balance sheet and any unusual items that occurred in the quarter. In Q2, earnings were normalized for the cost impact of prepaying the 2021 notes. We made the decision to prepay the notes early as at the time there was a high level of uncertainty around OEMs restarting their operations and around their production ramp up schedules. This caused significant uncertainty for Linamar's own recovery and restart plans. To mitigate any potential capital or liquidity risk and given the thirty day notice period within the notes, we decided in May to prepay the notes early.
The prepayment was funded with available cash and as such, there will be a benefit over the next fifteen months of removing the higher fixed interest rates on the notes in comparison to current market rates. As a result, we are expecting a payback of just over fifteen months at today's current rates. The impact from prepaying the notes was $0.11 per share on EPS. Earnings were further normalized for FX losses related to revaluation of the balance sheet, which impacted EPS by $0.13 per share. Normalized operating losses for the quarter were $19,400,000 This compares to earnings of $225,300,000 in Q2 twenty nineteen, a decrease of CAD244.7 million or 108.6%.
Normalized net earnings decreased CAD180.3 million or 113.9% in the quarter to a loss of CAD22 million. Fully diluted normalized EPS decreased by CAD2.74 or CAD114.2 percent to a loss of CAD0.34. Included in earnings for the quarter was a foreign exchange loss of CAD11 million, which resulted from a CAD5.9 million loss related to the revaluation of operating balances and a CAD5.1 million loss due to revaluation of financing balances. As I mentioned, the net FX loss impacted the quarter's EPS by $0.13 From a business segment perspective, the Q2 FX loss due to the revaluation of operating balances of 5,900,000.0 was a result of a $12,000,000 loss in Industrial and a $6,100,000 gain in Transportation. Further looking at the segments, Industrial sales decreased by 56.7% or CAD 339,900,000.0 to CAD 259,200,000.0 in Q2.
The decrease for the quarter was due to the sales declines associated with the global COVID-nineteen pandemic and the expected agricultural sales declines due to the ongoing issues in these markets as we have discussed over the last number of quarters. Normalized investor operating earnings for Q2 decreased CAD71 million or 66% over last year to CAD36.5 million. Primary drivers impacting industrial were the lower volumes as I just discussed. This was partially offset by various government support programs related to COVID-nineteen. Turning to transportation.
Sales decreased by CAD 8 and 22,600,000.0 over Q2 last year to CAD $664,000,000. Sales decrease in the second quarter was driven by the impact of COVID-nineteen and the resulting customer shutdowns that incurred in the quarter. This was lessened by a favorable FX impact due to changes in rates since last year. Q2 normalized earnings for transportation were lower by $173,700,000 or 147.5% over last year. In the quarter, transportation earnings were impacted primarily by the COVID-nineteen shutdowns, which was partially offset by the targeted cost reductions achieved in the quarter, the various government support programs for COVID-nineteen and a favorable FX impact due to the changes in rates since last year.
Returning to the overall LENRAR results, the company's gross margin was CAD41 million, a decrease of CAD293.4 million, primarily due to the lower earnings from the reduced volumes in both segments due to the impact of COVID-nineteen. The lower volumes in agriculture, which was mitigated by the targeted cost reductions achieved and the impact of various global government support programs. COGS amortization expense for the second quarter was CAD109.4 million. COGS amortization as a percent of sales increased 11.8%, primarily to the significant decline in sales related to COVID-nineteen in the quarter. Selling, general and administration costs decreased in the quarter to CAD60.4 million from CAD111 million.
The decrease is mainly due to targeted cost reductions to help offset the COVID-nineteen impact on our earnings and due to the impact of various government support programs. Finance expenses increased CAD4 million since last year due to the impact of prepaying the 2021 notes, which was mitigated by the impact of lower interest rates and lower debt levels. The consolidated effective interest rate for Q2 declined to 2% from 2.9% last year. Effective tax rate for the second quarter decreased to 21.2% compared to last year, which was mainly driven by the impact of a tax adjustment related to prior years that was recorded in the quarter. We are expecting the 2020 full year effective tax rate to be at the high end of our range of 23% to 25%.
Minimized cash position was $375,600,000 on June 30, a decrease of $62,000,000 compared to June 2019. Second quarter generated $193,500,000 in cash from operating activities, which is used mainly to fund CapEx and note repayments. This also resulted in free cash flow generation of CAD170.5 million in the quarter. Net debt to EBITDA increased slightly to 1.8 times in the quarter as a result of the COVID shutdowns, which was lessened by the strong cash generation in the quarter. Based on current estimates, we are expecting to remain well under two times by the end of the year.
This is subject to change and the impacts of COVID-nineteen is still very fluid and may not be currently fully understood. The amount available credit on our credit facilities was $754,000,000 at the end of the quarter. Our available liquidity at the end of Q2 was $1,100,000,000 And as a result, we currently believe we have sufficient liquidity to satisfy our financial obligations during 2020. To recap, sales and earnings for the quarter was a story of COVID-nineteen. With the dramatic impact the pandemic is having on Linamar, the critical story is one of cash and liquidity.
Linamar had a remarkable cash generation quarter as we generated $117,500,000 in the quarter and $317,600,000 year to date in free cash flow and maintaining strong liquidity at twenty nineteen levels of 1,100,000,000.0 That concludes my commentary, and I'd now like to open up for questions.
Your first question comes from Mark Neville with Scotiabank.
Thanks for taking my questions. First, Linda, you made a comment, I think, during the O book. I just want to clarify that Q3 would be back towards or trend towards Q1 levels for sales and profitability. I wasn't sure if that was consolidated or industrial?
No. I was talking about our overall Q3 results. So if you look at the outlook slide that's being displayed right now, over on the slide, you can see our outlook for Q3. So we're talking a little bit about the industrial specifically. And then at the bottom, we're talking about the overall consolidated results that we feel will be bouncing back up in a meaningful way to get towards where we were in Q1.
Okay. Okay. And I know you're not providing sort of an outlook or I mean, is good color, but I guess we can make our own assumptions around the transfer. But around the industrial, do you have sort of do you are you willing to sort of make a ballpark estimate of what you think sales may be down for the year, like consolidated industrial?
Well, no. I mean, as you know, we don't give specifics ever really around what our forward looking information is going to be. And certainly right now with, you know, so much uncertainty around what's happening is certainly not the quarter to start giving you a number in terms of what's going to be happening with our industrial business.
Sure. Understood. But it is the quarter to ask. Dale, just a point of clarification for you. The government grants or subsidies in the quarter, I think it was 52,000,000 or $53,000,000 Is that correct?
And maybe how does it flow through the P and Ls? Are they hitting different segments as they're running through the corporate line? Just trying to understand how it helps each business segment in the quarter.
Most yes, the $52,800,000 does flow through the statements in various locations because most of it is related to wages and benefits. So it does hit cost of goods sold and SG and A. We haven't split out it by segment, though. But, obviously, if majority of our employees are in the transportation segment, we have the biggest impact.
Yeah. Maybe just one last question if I can. Just on the working cap, obviously, was a great quarter. But is some of that I I assume some of that reverses in the second half as the business ramps. I'm just trying to get an idea sort of what the second half investment might look like or if you'd still see some cash coming out of working cap.
Yes. I mean certainly on the CapEx side, we're going to start to need to spend again. I mean we ratcheted back quite significantly in the second quarter, but we're going to we will start spending again. But still for the year, it should be down significantly from last year. In terms of noncash, I mean, as we ramp up, there's a pull on noncash working capital, but also an opportunity for managing the receivables, particularly on the auto side through some programs we have in place.
So that sort of offsets that. So we don't see a huge sucking sound on the noncash side and do actually expect to continue to generate free cash flow throughout the back half of the year. Dale, did you have anything else you want to add to that?
No, I thought that was an excellent answer.
All right. Thanks a lot. I'll get back in queue. And a good job, Nancy.
Thanks, Mark.
And your next question comes from Krista Breesen with CIBC.
Hi, good afternoon. Just a question on your free cash flow. It was quite good this quarter in spite of the pandemic. I was just wondering how you think about returning cash to shareholders as production improves, What sort of metrics you're looking at before becoming more active on your NCIB or returning your dividend to pre pandemic levels? Yes.
So I mean, on the dividend side, the cut to half was always meant to be temporary. And we'd always envisioned it for a couple of quarters. So if things go well, hopefully, we'll be seeing that come back up quite soon. In terms of the NCIB, obviously we want to support our share price. But given continued uncertainties out there, think it's definitely premature to do that.
But that said, if things continue to transpire as we currently expect, both the dividend and the buyback will be firmly back on the table and open for discussion because we're seeing some great levels of free cash flow and expect to have good free cash flow next year as well. Perfect. Thanks. And just a question on your CPV. So there was a pretty big spike this quarter.
And I was wondering how sticky is that number as production increases? Yes. I think that, you know, when there's volatility in production, the content per vehicle number tends to slop all over the place, right? So I think that it's probably not that sticky, especially the North American number of 192. I mean, it was driven up because customers that we are more heavily weighted with were the ones that were driving the most of the production in the quarter.
So as other OEMs start to ramp back up to more meaningful levels of production, I mean, that's going to dilute that down again as well. Okay, thanks. That's it for me.
Your
next question comes from Peter Skylar with BMO Capital Markets.
My first question is the government support levels that you've benefited from, the $53,000,000 which is quite substantial. Was that the major reason why you revised your guidance for the second quarter is that you saw you started to be able to see the benefit coming and you were able to, I guess, calculate what the amount was?
No, at all. I mean that was one piece of the puzzle, right? So I'd say hugely influential in comparing where we thought we'd be when we released first quarter results as opposed to where things started to look like where they panned out was first and foremost much stronger North American production levels than we had been expecting. We weren't really sure what was going to happen in terms of the ramp up. I don't think our customers really did either.
And what ended up happening was a much more rapid ramp up in production than anybody had expected. So that was a really big piece of the puzzle. Also very influential was the significant cost savings. I mean more than $30,000,000 in the quarter. That's not an annualized figure.
That's in the quarter cost savings that were realized that, you know, we it was implemented a lot quicker than, frankly, we had expected. And then, you know, the government subsidy is a piece of it, but don't forget that that was meant to just, you know, designed to help employers bring employees back to work, right, so that they could get paid at either 100% of their wage or at least 75% of their wage. So of course, we wanted to tap into the program for the benefit of those people who were laid off. But and also, it enabled us to bring more people back, to full time work than we would have originally done. And the cost of that, of course, was not netted off that $50,000,000 because we did have additional costs for them as well.
So there were some costs there that are not netted off.
And maybe just to add to that, Peter, I mean, in the sort of early May timeframe, I mean, when we're working with our customers, they're weekly telling us watch the EDIs, check the releases and all those type of things. So we never really anticipated them jumping back to three shifts or two shifts on some of these applications. So that was really an important factor. And then also, as Linda said, the cost reduction, we created a team basically around the world and things that people wouldn't think of, right, like stop doing subscriptions, stop doing uniform cleaning, stop picking up garbage. I mean, that you don't have the full workload going, just stop those things.
So we really focused in on that. And then I think the bringing people back to work, if you look at what we did on ventilators and the clean slate on the ultraviolet system and then also working with local communities on PPE, like distributing and making things to really support some of those things in the community to get people back to work. So I thought that was really important as well at the time.
Okay. But what's the timeline for these government subsidies to expire? Because I assume you're seeing them in Canada, US. I'm not too sure if you're seeing them in Mexico and I don't know where you're at in Europe. And also like on these cost savings Jim, the 30,000,000 in the quarter like they will creep back in won't they?
Because you can only defer them at some point. You know, you have to clean your uniforms and, you know, you need garbage pickup.
Certainly. Like, some of
I mean, some of them
Yeah. Go ahead, ma'am.
Sorry, Jim. Yeah. Some of them are gonna come back. But, I mean, a lot of it, like, was, you know, travel costs that were significantly cut and, you know, like, you know, conferences, all these kind of things that people aren't going to, I mean, those things are not gonna come back by any stretch. And, you know, putting something off that, okay, we're just not gonna do that this year, You know, there's a lot of cost savings that are sticky and are going to hang on at least for another few quarters.
And with regards to the government subsidy itself, you know, it depends on the country obviously, but what's happening and what, you know, how long it's going to last. But I mean certainly the Canadian program is changing dramatically over the next couple of months as well. Again, to encourage people to come back to work and that's the whole point of it, right? So, you know, this you know, we had costs associated with bringing all those people back to work that is not considered when you look at that $50,000,000 So do need to keep that in mind as well. And I'm sorry, I interrupted you, Jim.
You go No,
I think we're on the same page, and it was the same sort of thing. Anything associated with production, Peter, certainly would come back. But I was going to say some of the things, the sustaining stuff about travel and things like that, that people are just not doing. Those are sort of longer term until that sort of gets back to a normal state of having a cure or vaccine or something, right? I think that will be sort of state status quo.
Okay. And I would just lastly say as well that you know, we're still remaining extremely cost conscious. And, you know, as I mentioned in my formal comments, not becoming kinda complacent that, okay. We're coming out of it because, you know, there's risk out there. So, you know, we're keeping it pretty tight for a while.
Okay. Switching gears, like the as you point out, like the outlook for the two industrial markets that you're involved in are it's kind of cloudy. It's to really put your finger on how they're going to how those sectors are going to perform for the rest of the year and into 2021. But can you comment like what are you seeing in your, order book, for Skyjack and for MacDon? Is is the order book stable or is it building or is it declining?
Like what are you seeing for yourself?
Yes. So I mean for MacDon, as noted, we're expecting the market to be down, and it is down. So but it's not 50% down. I mean it's you know, not down at anything close to that. It's like 10% down, you know.
So it's double digit but it's pretty low double digit decline. So, you know, we had a chart that I showed on that. I think year to date was like 9% down. So it'll be around that for the year. So, you know, for ag, actually, the outlook is pretty good because although this year is a pretty, you know, rough year, we are seeing great market share growth like in Europe, for instance, which is really helping to offset that.
So, you know, we feel like, you know, things are, you know, not that bad on the ag side. On the access side, I mean, you know, for sure we're not seeing signs of the market bouncing back yet. So, you know, it's very reliant on construction levels and that's reliant on people being able to leave their houses and work. So, you know, I think that I thought it was quite positive that we were seeing the equipment utilization levels really ramping up. You know, June being at 93 percent of where it was a year ago, that was great.
But with the, you know, sort of resurgence in The U. S. The virus, we've seen things slow down in July. So, you know, it's a little uncertain. And when it's uncertain, rental houses aren't fine.
So, you know, we're not seeing the momentum there yet. But, you know, we're seeing the agricultural business performing not too badly. Jim, can you give a little more color on that?
Yes. I was just going to maybe add on the ag side, the we watch the dealer inventories, and they're at sort of the right levels that we've been thinking through. So that's a pretty important thing that we're watching, Peter. And then also farmer confidence and stuff like that. And those seem in line with what Linda said.
And then access on the access market, I would say, in general, we're seeing sort of maybe some postponement of stuff, just things like that where we're expecting order intake. It might be getting postponed or deferred a little bit, right? But that's more what we're seeing there on sort of day to day feel and touch, right? So that is, Linda was saying, is a little less clear on where that's going to go in the next couple of quarters.
Right. And just remind me of the seasonality in the access in terms of the order patterns. Q3 is a weaker quarter than Q2 in terms of order development. Is that true?
Yes. Yes.
Sorry, just bear with me. Just have one more question, which is like this ramp that we've had in the North American automotive industry, like as you point out, where they're really ramping back quite quickly to try and you know, resolve these depleted inventory levels. Like, how how has it gone in terms of the industry? Has, you know, have parts suppliers been able to perform so you're seeming seeing, you know, limited interruption? Has there been kind of stops and starts as you've ramped up?
Not saying that Linamar is an issue but other parts suppliers, you know, in Mexico and elsewhere been an issue in slow speed.
Yes. I mean I think overall it's been musically smooth, you know, surprisingly so. I mean certainly there's been the odd issues here and there. And certainly things recently like Mexico, is having issues. So some states are forcing shutdowns and less shifts.
Jim, why don't you add some more Yes. Color to
It's been really fluid. And yes, there has been some stops and starts and things like that with some suppliers struggling. And there's obviously, there has been and there will be more COVID cases that pop up in the OEM in the supply base. And but I got to say overall, in general, I think the protocols at the automotive side and the supply base have been excellent and people are following those. And so and I think there's a commitment on the OEM side to keep going that they're not going to stop things again.
They now I think we all know we've got to be doing both things, right? We've got to keep people safe, but we also got to keep livelihoods going and demands there, right? So which is really incredible to see as well. So there's been a little bit of here and there, but nothing like I thought we would see more of it quite frankly, and but we've seen some pretty good action.
Okay. Those are my questions. Thank you.
Great. Thanks. And there are no further questions. I would like to turn it back over to Linda for any closing remarks. Okay, great.
Thanks very much. Well, to conclude this evening, I'd like to, as always, leave you with three key messages. First, we have executed strongly on our cost reduction and cash generation action plans with excellent results this quarter, including more than $30,000,000 of realized cost savings and free cash flow of 170,000,000 I just have to say it one more time. Second, our balance sheet is in strong shape with debt reduced further and liquidity held despite a very demanding quarter in terms of market pressures. And finally, we are very proud of our teams for their outstanding execution on launching complex ventilator and UVM disinfection systems in record time and at the same time, flawlessly ramping production back up globally with now more than 90% of our workforce back to work and working safely.
So thanks everybody and I hope you all keep well.
That does conclude today's call. You may now disconnect.