Restructuring of Operations

6 Months Ended

Jun. 30, 2013

Restructuring and Related Activities [Abstract]

Our restructuring activities primarily include rationalizing our operating footprint by consolidating facilities, positioning operations in lower cost locations and reducing overhead costs. Restructuring expense includes costs associated with current and previously announced actions and is comprised of contractual and noncontractual separation costs and exit costs, including costs associated with lease continuation obligations and certain operating costs of facilities that we are in the process of closing.

During the second quarter of 2013, we implemented certain headcount reduction initiatives, primarily in our Light Vehicle and Commercial Vehicle businesses in Argentina and Australia. New customer programs and other developments in our North American Light Vehicle business and a decision by our European Off-Highway business to in-source the manufacturing of certain parts resulted in the reversal of previously accrued severance obligations. Restructuring expense of $4, net of the aforementioned reversals, during the second quarter of 2013 is attributable to newly implemented and previously announced initiatives and includes $3 of severance and related benefits costs and $1 of exit costs.

During the first quarter of 2013, restructuring expense of $3, including $1 associated with discontinued operations, was primarily attributable to exit costs associated with previously announced initiatives.

During the second quarter of 2012, we implemented and recognized the costs of specific headcount reduction initiatives, primarily associated with certain of our South American operations. Additionally, we exited our Kalamazoo, Michigan facility and recognized the fair value of the associated lease continuation obligation. Total restructuring expense in the second quarter of 2012 to recognize the costs of these actions as well as costs associated with other previously announced initiatives was $20, including $1 associated with discontinued operations, and includes $7 of severance and related benefits costs and $13 of exit costs.

During the first quarter of 2012, restructuring expense of $6, including $1 associated with discontinued operations, was attributable to costs associated with previously announced initiatives and included $4 of severance and related benefits costs and $2 of exit costs.

Restructuring charges and related payments and adjustments —



	Employee Termination Benefits			Exit Costs			Total
Balance at March 31, 2013	$	21		$	12		$	33
Activity during the period:
Charges to restructuring	9			1			10
Adjustments of accruals	(6		)				(6		)
Cash payments	(10		)	(2		)	(12		)
Balance at June 30, 2013, including noncurrent portion	$	14		$	11		$	25

Balance at December 31, 2012	$	27		$	13		$	40
Activity during the period:
Charges to restructuring	10			3			13
Adjustments of accruals	(7		)				(7		)
Discontinued operations charges				1			1
Cash payments	(16		)	(6		)	(22		)
Balance at June 30, 2013, including noncurrent portion	$	14		$	11		$	25

At June 30, 2013, the accrued employee termination benefits relate to the reduction of approximately 400 employees to be completed over the next three years. The exit costs relate primarily to lease continuation obligations. We estimate cash expenditures to approximate $9 in 2013 and $16 thereafter.

Cost to complete — The following table provides project-to-date and estimated future expenses for completion of our pending restructuring initiatives.



	Expense Recognized							Future Cost to Complete
	Prior to 2013		2013			Total to Date		Future Cost to Complete
LVD	$	18	$	2		$	20	$	8
Power Technologies	9					9		2
Commercial Vehicle	19		6			25		7
Off-Highway	8		(3		)	5		1
Corporate			1			1
Discontinued operations	4		1			5		4
Total	$	58	$	7		$	65	$	22

The future cost to complete includes estimated separation costs, primarily those associated with one-time benefit programs, and exit costs, including lease continuation costs, equipment transfers and other costs which are required to be recognized as closures are finalized or as incurred during the closure.

- 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.

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