RESTRUCTURING COSTS

At September 30, 2015 and 2014, $10 million and $11 million, respectively, of restructuring reserves primarily related to unpaid employee termination benefits remained in the consolidated balance sheet. Asset impairment charges relate to manufacturing facilities that have been sold and machinery and equipment that became idle and obsolete as a result of these actions.

The following table summarizes changes in restructuring reserves (in millions):



	Employee Termination Benefits			Asset Impairment			Plant Shutdown & Other			Total
Balance at September 30, 2012	$	15		$	—		$	—		$	15
Activity during the period:
Charges to continuing operations	18			1			4			23
Charges to discontinued operations ⁽¹⁾	3			—			—			3
Asset write-offs	—			(1		)	—			(1		)
Cash payments – continuing operations	(19		)	—			(4		)	(23		)
Cash payments – discontinued operations ⁽¹⁾	(3		)	—			—			(3		)
Other	(2		)	—			—			(2		)
Balance at September 30, 2013	12			—			—			12
Activity during the period:
Charges to continuing operations	10			—			—			10
Cash payments – continuing operations	(10		)	—			—			(10		)
Other	(1		)	—			—			(1		)
Balance at September 30, 2014	11			—			—			11
Activity during the period:
Charges to continuing operations	15			1			—			16
Asset write-offs	—			(1		)	—			(1		)
Cash payments – continuing operations	(16		)	—			—			(16		)
Total restructuring reserves, end of year	10			—			—			10
Less: non-current restructuring reserves	(3		)	—			—			(3		)
Restructuring reserves – current, at September 30, 2015	$	7		$	—		$	—		$	7

____________________


⁽¹⁾	Charges to discontinued operations are included in discontinued operations in the consolidated statement of operations. In fiscal year 2014, amounts for fiscal year 2013 were recast for discontinued operations.

Restructuring costs attributable to the company’s business segments during fiscal years 2015, 2014 and 2013 are as follows (in millions):



	Commercial Truck & Industrial		Aftermarket & Trailer		Corporate		Total
Fiscal year 2015:
South America labor reduction II	$	6	$	—	$	—	$	6
M2016 footprint actions	5		—		—		5
Closure of engineering facility	—		—		2		2
European labor reductions	2		—		—		2
Other	1		—		—		1
Total restructuring costs	$	14	$	—	$	2	$	16
Fiscal year 2014:
South America labor reduction I	$	7	$	—	$	—	$	7
Other	1		1		1		3
Total restructuring costs	$	8	$	1	$	1	$	10
Fiscal year 2013:
Variable labor reductions	$	5	$	—	$	—	$	5
Segment reorganization and Asia Pacific realignment	10		3		3		16
M2016 footprint actions	2		—		—		2
Total restructuring costs	$	17	$	3	$	3	$	23

M2016 Footprint Actions: As part of the company's M2016 Strategy, the company announced a North American footprint realignment action and a European shared services reorganization. In fiscal year 2015, the company announced the consolidation of certain gearing and machining operations in North America and 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. In fiscal year 2015, $5 million of severance and other restructuring charges were recognized associated with the closure of this facility. To date, the company has eliminated approximately 140 hourly and salaried positions and incurred approximately $7 million of restructuring costs associated with M2016 Footprint Actions, primarily in the Commercial Truck & Industrial segment. Restructuring actions associated with this program were substantially complete as of September 30, 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 softening economic conditions in the region. In response to decreasing production volumes in South America, the company eliminated approximately 190 hourly and 20 salaried positions and incurred $7 million of restructuring costs, primarily severance benefits, in the Commercial Truck & Industrial segment. This plan was completed in fiscal year 2014.

South America Labor Reduction II: During fiscal year 2015, a restructuring plan to further reduce headcount in South America was approved by the local union. This restructuring plan was in response to the current economic environment in South America which continued to weaken throughout 2015. With this restructuring plan, the company eliminated approximately 230 hourly and 20 salaried positions and recorded severance expenses of $6 million associated with this plan during the third quarter of fiscal year 2015. Restructuring actions associated with this program were substantially complete as of September 30, 2015.

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 $2 million associated with this plan. Restructuring actions associated with this program were substantially complete as of September 30, 2015.

European Labor Reductions: 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 fiscal year 2015. Restructuring actions associated with this program were substantially complete as of June 30, 2015.

Variable Labor Reductions: In fiscal year 2013, the company recognized $5 million of restructuring costs associated with a global variable labor headcount reduction plan. This plan was completed in fiscal year 2013.

Segment Reorganization and Asia-Pacific Realignment: In fiscal year 2013, the company announced certain plans to revise its management reporting structure and consolidate its operations in China. During fiscal year 2013, the company recorded employee severance charges and other exit costs of $16 million associated with these actions. These costs related to the elimination of approximately 200 salaried positions (including contract employees) and 50 hourly positions and a lease termination. This plan was completed in fiscal year 2013.