Restructuring Costs

6 Months Ended

Mar. 31, 2015

Restructuring and Related Activities [Abstract]

At March 31, 2015 and September 30, 2014, $12 million and $11 million, respectively, of restructuring reserves, primarily related to unpaid employee termination benefits, remained in the consolidated balance sheet. The changes in restructuring reserves for the six months ended March 31, 2015 and 2014 are as follows (in millions):



	Employee Termination Benefits			Asset Impairment		Plant Shutdown & Other		Total
Beginning balance at September 30, 2014	$	11		$	—	$	—	$	11
Activity during the period:
Charges to continuing operations	6			—		—		6
Cash payments – continuing operations	(3		)	—		—		(3		)
Other	(2		)	—		—		(2		)
Total restructuring reserves at March 31, 2015	12			—		—		12
Less: non-current restructuring reserves	(2		)	—		—		(2		)
Restructuring reserves – current, at March 31, 2015	$	10		$	—	$	—	$	10

Balance at September 30, 2013	$	12		$	—	$	—	$	12
Activity during the period:
Charges to continuing operations	3			—		—		3
Cash payments – continuing operations	(4		)	—		—		(4		)
Other	(1		)	—		—		(1		)
Total restructuring reserves at March 31, 2014	10			—		—		10
Less: non-current restructuring reserves	(3		)	—		—		(3		)
Restructuring reserves – current, at March 31, 2014	$	7		$	—	$	—	$	7

Closure of a Corporate Engineering Facility: In the second quarter of fiscal year 2015, the company notified 33 salaried and contract employees that their positions were being eliminated due to the planned closure of a corporate engineering facility. The company recorded severance expenses of $1 million associated with this plan. The company expects to incur approximately $2 million in lease termination and other exit costs in North America associated with this closure. Restructuring actions associated with this program are expected to be completed by the end of fiscal year 2015.

European Labor Reduction: During the second quarter of fiscal year 2015, the company initiated a European headcount reduction plan intended to reduce labor costs in response to continued soft markets in the region. The company plans to eliminate 21 hourly and 23 salaried positions and has recorded $2 million of expected severance expenses in the Commercial Truck & Industrial segment in the second quarter of fiscal year 2015. The company plans to incur an additional $1 million in severance costs by the end of the third quarter of fiscal year 2015.

M2016 Actions: The company continues to implement certain footprint actions as part of its M2016 strategy. In the first quarter of fiscal year 2015, the company recorded expected severance charges of $3 million associated with the elimination of 51 hourly and 19 salaried positions in the Commercial Truck & Industrial segment associated with the consolidation of certain gearing and machining operations in North America.

South America Labor Reduction: During the fourth quarter of fiscal year 2014, the company initiated a South America headcount reduction plan intended to reduce labor costs in response to decreasing production volumes in the region. The company eliminated approximately 190 hourly and 20 salaried positions and incurred $7 million of restructuring costs in the fourth quarter of fiscal year 2014, primarily severance benefits, in the Commercial Truck & Industrial segment.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

+ References+ Details