Restructuring Charges

9 Months Ended

Sep. 30, 2021

RESTRUCTURING CHARGES

We periodically take action to improve operating efficiencies, typically in connection with business acquisitions or changes in the economic environment. Our footprint and headcount reductions and organizational integration actions relate to discrete, unique restructuring events, primarily reflected in the following plans.

On June 26, 2020, the Company committed to a workforce reduction plan in the United States, as part of the Company's continued cost reduction efforts. The workforce reduction plan included a voluntary retirement program and involuntary severance actions which were effective as of the end of the second quarter of 2020. These actions were completed in 2020 and the Company incurred $102 million in employee termination costs related to these actions. The remaining cash settlement of $15 million will occur throughout 2021, 2022 and 2023.

During the third quarter of 2020, the Company committed to workforce reductions outside of the United States, as part of the Company’s previously announced continued cost reduction efforts. The Company has incurred $93 million of the approximately $148 million total costs and the action will be substantially complete in 2021. Cash settlement of $80 million has been paid to date with the remaining cash settlement expected to be paid primarily over the duration of 2021.

On May 31, 2019, we announced our intention to reconvert our Naples, Italy manufacturing plant and potentially sell the plant to a third party. On September 16, 2019, we entered into a preliminary agreement to sell the plant to a third-party purchaser and to support costs associated with the transition. In October 2019, we announced that, based on further discussions with unions and the Italian government, we will continue production at the Naples manufacturing plant in the near-term and resume negotiations with unions and the Italian government related to our exit of the plant. Our preliminary agreement to sell the plant to a third-party purchaser terminated in accordance with its terms in March 2020. We ceased production in the plant and exited the facility in 2020 as previously disclosed.

In connection with this action, we have incurred approximately $141 million total costs comprising $43 million in asset impairment costs, $25 million in other associated costs and $73 million in employee-related costs through September 30, 2021. The Company has commenced the collective dismissal process which had been

previously postponed in Italy as a result of the COVID-19 pandemic, and expects substantially all of the remaining $59 million cash settlement to occur in 2021, subject to the outcome of current litigation involving the unions, which should be resolved in 2021. Any negative outcome is not currently expected to materially impact cost, but could delay cash settlement into 2022.

The following table summarizes the changes to our restructuring liability during the nine months ended September 30, 2021:


Millions of dollars	December 31, 2020		Charges to Earnings		Cash Paid		Non-Cash and Other		September 30, 2021
Employee termination costs	$	145	$	32	$	(72)	$	—	$	105
Asset impairment costs	8		1		—		(1)		8
Facility exit costs	—		1		(1)		—		—
Other exit costs	20		1		(16)		(6)		(1)
Total	$	173	$	35	$	(89)	$	(7)	$	112

The following table summarizes the restructuring charges by operating segment for the period presented:


	Nine Months Ended
Millions of dollars	September 30, 2021
North America	$	—
EMEA	32
Latin America	—
Asia	2
Corporate / Other	1
Total	$	35