Restructuring Charges and Asset Impairments, Net

For the years ended December 31, 2018, 2017, and 2016, restructuring charges, net, by segment, is as follows:



	Year Ended December 31
	2018			2017		2016
	(Millions)
Clean Air	$	14		$	23	$	6
Ride Performance	48			16		13
Aftermarket	16			7		9
Powertrain	(2		)	—		—
Motorparts	31			—		—
Other	5			1		2
	$	112		$	47	$	30
These amounts are classified in the consolidated statements of income as follows:
Cost of sales	$	66		$	41	$	17
Engineering, research, and development	4			—		1
Selling, general, and administrative	40			6		12
Other expense	2			—		—
	$	112		$	47	$	30

For the years ended December 31, 2018, 2017, and 2016, asset impairments, by segment, is as follows:



	Year Ended December 31
	2018		2017		2016
	(Millions)
Clean Air	$	—	$	2	$	1
Ride Performance	6		1		2
Aftermarket	—		—		3
Other	2		—		—
	$	8	$	3	$	6
These amounts are classified in the consolidated statements of income as follows:
Cost of sales	$	3	$	—	$	—
Selling, general, and administrative	2		—		—
Depreciation and amortization	3		3		4
Other expense	—		—		2
	$	8	$	3	$	6

In 2018, the Company incurred charges for the following items:


•	The Company incurred $25 million in restructuring and related costs, related to the accelerated move of the Beijing Ride Performance plant. The Company anticipates the move out of its Beijing plant will be completed by the first quarter of 2019.


•	The Company incurred $10 million in restructuring charges related to headcount reductions at a Clean Air manufacturing plant in Germany.

•

In October, 2018, the Company announced a plan to close its ride performance plants in Owen Sound, Ontario and Hartwell, Georgia as part of an initiative to realign its manufacturing footprint to enhance operational efficiency and respond to changing market conditions and capacity requirements. The Company expects to complete the closure of the two facilities near the end of the second quarter of 2020. The Company recorded charges of $24 million in 2018, including asset write-downs of $6 million. The charges included severance payments to employees, the cost of decommissioning equipment, and other costs associated with this action.

•

The Company incurred a $45 million charge related to a restructuring plan designed to achieve a portion of the synergies the Company anticipates achieving in connection with the acquisition of Federal-Mogul. Pursuant to the plan, the Company will reduce its headcount globally across all segments. The Company began implementing headcount reductions in January 2019 and these actions will continue through 2019. The Company's acquisition of Federal-Mogul is discussed further in Note 3, Acquisitions and Divestitures.


•	The Company incurred an additional $16 million in restructuring and related costs, including asset write-downs of $2 million, for cost improvement initiatives at various other operations around the world.

In 2017, the Company incurred charges for the following items:

•

On June 29, 2017, the Company announced a restructuring initiative to close its Clean Air manufacturing plant in O'Sullivan Beach, Australia and downsize its Ride Performance plant in Clovelly Park, Australia when General Motors and Toyota ended vehicle production in the country in October 2017. All such restructuring activities related to this initiative were completed in 2018. The Company recorded total charges related to this initiative of $21 million in 2017 including asset write-downs of $2 million. The charges included severance payments to employees, the cost of decommissioning equipment, a lease termination payment and other costs associated with this action.


•	In the fourth quarter of 2017, the Company began to accelerate a required move of its Beijing Ride Performance plant outside of Beijing area. The Company incurred $6 million of restructuring and related costs due to this relocation.


•	The Company recognized a $10 million charge, including asset write-downs of $1 million, related to the planned closing of its Clean Air plant in Ghent, Belgium due to the scheduled end of production on a customer platform in 2020.


•	The Company incurred an additional $13 million in restructuring and related costs for cost improvement initiatives at various other operations around the world.

In 2016, the Company incurred $36 million in restructuring and related costs including asset write-downs of $6 million, primarily related to manufacturing footprint improvements in North America, headcount reduction and cost improvement initiatives in Europe, China, South America and Australia.

Restructuring Reserve Rollforward

Amounts related to activities that were charged to restructuring reserves, including costs incurred to support future structural cost reductions, by reportable segments are as follows:



	Reportable Segments
	Clean Air			Ride Performance			Aftermarket			Powertrain			Motorparts			Total Reportable Segments			Other			Total
	(Millions)
Balance at December 31, 2015	$	2		$	24		$	4		$	—		$	—		$	30		$	—		$	30
Provisions	6			13			9			—			—			28			2			30
Payments	(6		)	(31		)	(7		)	—			—			(44		)	(1		)	(45		)
Balance at December 31, 2016	2			6			6			—			—			14			1			15
Provisions	23			16			7			—			—			46			1			47
Payments	(12		)	(16		)	(9		)	—			—			(37		)	(2		)	(39		)
Foreign currency	1			1			—			—			—			2			—			2
Balance at December 31, 2017	14			7			4			—			—			25			—			25
Federal-Mogul Acquisition	—			—			—			22			15			37			—			37
Provisions	14			48			16			1			31			110			5			115
Held for sale	—			—			—			—			(2		)	(2		)	—			(2		)
Revisions to estimates	—			—			—			(3		)	—			(3		)	—			(3		)
Payments	(10		)	(35		)	(12		)	(5		)	(4		)	(66		)	(2		)	(68		)
Foreign currency	(1		)	—			—			—			—			(1		)	—			(1		)
Balance at December 31, 2018	$	17		$	20		$	8		$	15		$	40		$	100		$	3		$	103

The following table provides a summary of the Company's consolidated restructuring liabilities and related activity for each type of exit costs:



	Employee Costs			Facility Closure and Other Costs			Total
	(Millions)
Balance at December 31, 2015	$	20		$	10		$	30
Provisions	19			11			30
Revisions to estimates	(15		)	15			—
Payments	(16		)	(29		)	(45		)
Balance at December 31, 2016	8			7			15
Provisions	31			16			47
Payments	(22		)	(17		)	(39		)
Foreign currency	2			—			2
Balance at December 31, 2017	19			6			25
Federal-Mogul Acquisition	37			—			37
Provisions	90			25			115
Held for sale	(2		)	—			(2		)
Revisions to estimates	(4		)	1			(3		)
Payments	(41		)	(27		)	(68		)
Foreign currency	(1		)	—			(1		)
Balance at December 31, 2018	$	98		$	5		$	103