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Costs Associated with Exit and Restructuring Activities
9 Months Ended
Sep. 30, 2020
Restructuring And Related Activities [Abstract]  
Costs Associated with Exit and Restructuring Activities

NOTE 8 – Costs Associated with Exit and Restructuring Activities

Restructuring charges are reported as a separate line within operating earnings in the Condensed Consolidated Statement of Earnings.

Total restructuring charges are as follows:

 

 

 

Three Months Ended

 

 

 

September 30, 2020

 

 

September 30, 2019

 

Restructuring charges

 

$

1,041

 

 

$

2,342

 

 

 

 

Nine Months Ended

 

 

 

September 30, 2020

 

 

September 30, 2019

 

Restructuring charges

 

$

1,416

 

 

$

5,337

 

 

September 2020 Plan

In September 2020, we initiated a restructuring plan focused on optimizing our manufacturing footprint and improving operational efficiency by better utilizing our systems capabilities. This plan includes transitioning certain administrative functions to a shared service center, realignment of manufacturing locations, and certain other efficiency improvement actions ("September 2020 Plan"). The restructuring cost of the plan is estimated to range between $5,000 and $6,000, including workforce reduction charges, building and equipment relocation charges, other contract and asset related costs. In addition to these charges, we expect an additional $5,000 to $6,000 of other costs to be incurred related to the initiatives that would not qualify as restructuring charges. These costs would include certain related employee resource overlap and training costs as well as additional capital expenditures. Restructuring charges under this plan were $1,008 during the three and nine months ended September 30, 2020. The total restructuring liability related to the September 2020 Plan was $583 at September 30, 2020.

June 2016 Plan

In June 2016, we announced plans to restructure operations by phasing out production at our Elkhart, IN facility and transitioning it into a research and development center supporting our global operations ("June 2016 Plan"). Additional organizational changes were also implemented in various other locations. In 2017, we revised this plan to include an additional $1,100 in planned costs related to the relocation of our corporate headquarters in Lisle, IL and our plant in Bolingbrook, IL, both of which have now been consolidated into a single facility. Restructuring charges under this plan, which is substantially complete, were $0 and $671 during the three months ended September 30, 2020 and 2019, respectively. Restructuring charges under this plan were $(32) and $3,914 during the nine months ended September 30, 2020 and 2019, respectively. The total restructuring liability related to the June 2016 Plan was $23 at September 30, 2020 and $233 at December 31, 2019. Additional costs related to production line movements, equipment charges, and other costs will be expensed as incurred.

The following table displays the planned restructuring charges associated with the June 2016 Plan as well as a summary of the actual costs incurred through September 30, 2020:

 

 

 

 

 

 

 

Actual costs

 

 

 

Planned

 

 

incurred

through

 

June 2016 Plan

 

Costs

 

 

September 30, 2020

 

Workforce reduction

 

$

3,075

 

 

$

3,312

 

Building and equipment relocation

 

 

9,025

 

 

 

10,530

 

Other charges(1)

 

 

1,300

 

 

 

2,156

 

Total restructuring charges

 

$

13,400

 

 

$

15,998

 

 

(1)

Other charges includes the effects of currency translation, non-cash asset write-downs and other charges.

April 2014 Plan

In April 2014, we announced plans to restructure our operations and consolidate our Canadian operations into other existing facilities as part of our overall plan to simplify our business model and rationalize our global footprint (“April 2014 Plan”). These restructuring actions were completed in 2015. Restructuring charges associated with this plan were $(248) for the three and nine months ended September 30, 2019. There were no restructuring charges incurred under this plan during the three and nine months ended September 30, 2020. The total restructuring liability related to the April 2014 Plan was $874 at September 30, 2020, and $703 at December 31, 2019.

Other Restructuring Activities

From time to time we undertake other restructuring activities that are not part of a formal plan. During the three and nine months ended September 30, 2020, we incurred restructuring charges of $33 and $440, respectively, primarily relating to workforce reduction actions.   During the three and nine months ended September 30, 2019, we incurred restructuring charges of $1,671 for exit and disposal activities at three facilities, of which $800 was related to a lease termination charge resulting from our acquisition of Quality Thermistor, Inc. (see Note 19, “Business Acquisitions”) and $871 was related to workforce and building relocation costs at two foreign facilities. The total remaining restructuring liability associated with these actions was $14 at September 30, 2020 and $1,057 at December 31, 2019.

The following table displays the restructuring liability activity included in Accrued expenses and other liabilities for all plans for the nine months ended September 30, 2020:

 

Restructuring liability at January 1, 2020

 

$

1,993

 

Restructuring charges

 

 

1,416

 

Cost paid

 

 

(1,382

)

Other activity(1)

 

 

(533

)

Restructuring liability at September 30, 2020

 

$

1,494

 

 

(1)

Other activity includes the effects of currency translation, non-cash asset write-downs and other charges that do not flow through restructuring expense.