Restructuring Costs

At June 30, 2015 and September 30, 2014, $13 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 nine months ended June 30, 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	15			—		—		15
Cash payments – continuing operations	(10		)	—		—		(10		)
Other	(3		)	—		—		(3		)
Total restructuring reserves at June 30, 2015	13			—		—		13
Less: non-current restructuring reserves	(2		)	—		—		(2		)
Restructuring reserves – current, at June 30, 2015	$	11		$	—	$	—	$	11

Balance at September 30, 2013	$	12		$	—	$	—	$	12
Activity during the period:
Charges to continuing operations	3			—		—		3
Cash payments – continuing operations	(6		)	—		—		(6		)
Total restructuring reserves at June 30, 2014	9			—		—		9
Less: non-current restructuring reserves	(3		)	—		—		(3		)
Restructuring reserves – current, at June 30, 2014	$	6		$	—	$	—	$	6

M2016 Actions: The company continues to implement certain footprint actions as part of its M2016 strategy. During the first quarter of fiscal year 2015, the company recorded severance charges of $3 million associated with the elimination of approximately 50 hourly and 20 salaried positions in the Commercial Truck & Industrial segment in connection with the consolidation of certain gearing and machining operations in North America.

During the third quarter of fiscal year 2015, the company notified approximately 40 hourly and salaried employees in the Commercial Truck & Industrial segment that their positions were being eliminated due to the planned closure of a North America manufacturing facility. The company expects this restructuring action will result in $3 million in costs, of which $2 million was incurred in the third quarter of fiscal year 2015. Restructuring actions associated with this plan are expected to be completed by the end of fiscal year 2015.

South America Labor Reduction I: 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.

South America Labor Reduction II: During the third quarter of fiscal year 2015, a restructuring plan to further reduce headcount in South America was approved by the local union. This restructuring plan is in response to the current economic environment in South America which has continued to weaken in 2015. With this restructuring plan, the company expects to eliminate approximately 230 hourly and 20 salaried positions and incur $9 million in employee separation costs in the Commercial Truck & Industrial segment. The company recorded severance expenses of $6 million associated with this plan during the third quarter of fiscal year 2015. Restructuring actions associated with this plan are expected to be completed by the end of the first quarter of fiscal year 2016.

Closure of a Corporate Engineering Facility: During the second quarter of fiscal year 2015, the company notified approximately 30 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 eliminated approximately 20 hourly and 20 salaried positions and recorded $2 million of expected severance expenses in the Commercial Truck & Industrial segment in the second quarter of fiscal year 2015. Restructuring actions associated with this program were substantially complete as of June 30, 2015.