UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 2.05 Costs Associated with Exit or Disposal Activities.
On December 3, 2019, Textron’s Board of Directors approved a restructuring plan designed to reduce costs and improve overall operating efficiency through headcount reductions, facility consolidations and other actions. The restructuring plan principally impacts the Textron Aviation and Industrial segments. In the Textron Aviation segment, we conducted a review of our ongoing workforce requirements, resulting in the initiation of targeted headcount reductions and other actions to realign our cost structure. In the Industrial segment, in connection with the strategic review of our Kautex business in the fourth quarter of 2019, we are initiating cost reduction and other measures to maximize its operating margin and are taking further cost cutting actions in our Textron Specialized Vehicles business.
We expect to incur pre-tax charges in the fourth quarter of 2019 in the range of $65 million to $80 million. Severance and related costs are estimated to be in the range of $40 million to $45 million, with a total headcount reduction of approximately 875 positions. The headcount reductions include business support and administrative functions within both segments. At Textron Aviation, the headcount reductions are primarily related to engineering positions, reflecting completion of the Longitude certification activities and reduced requirements for ongoing development programs. Impairment charges related to facility closures and tooling and other assets across both segments are estimated to be in the range of $15 million to $20 million. Contract termination and other costs are estimated to be in the range of $10 million to $15 million, which includes facility closure costs and cost associated with the strategic review of the Kautex business.
Future cash expenditures are expected to be in the range of $50 million to $60 million, which will be paid principally in the first half of 2020. We anticipate that the restructuring plan will be substantially completed by the end of 2019.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TEXTRON INC. | ||
| (Registrant) | ||
| By: | /s/ Mark S. Bamford | |
| Mark S. Bamford | ||
| Vice President and Corporate Controller | ||
| Date: December 5, 2019 | ||