Restructuring of Operations

Our restructuring activities have historically included rationalizing our operating footprint by consolidating facilities, positioning operations in lower cost locations and reducing overhead costs. In recent years, however, in response to lower demand and other market conditions in certain businesses, our focus has primarily been headcount reduction initiatives to reduce operating 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 third quarter of 2016, we approved plans to implement certain headcount reduction initiatives, primarily in our Off-Highway business. Including costs associated with this action and with other previously announced initiatives, restructuring expense during the third quarter of 2016 was $17, including $16 of severance and benefits costs and $1 of exit costs.

During the first half of 2016, we approved and announced the closure of our Commercial Vehicle manufacturing facility in Glasgow, Kentucky. The closure is expected to be completed by mid-2017. We expect that completion of this action will require cash expenditures in the range of $15 to $20, of which $6 represents estimated restructuring charges for employee separation costs, $3 represents estimated restructuring charges for equipment relocation costs and the remainder represents expected capital investment costs for supplier tooling and other exit costs. Including costs associated with these actions and with other previously announced initiatives, restructuring expense for the nine months ended September 30, 2016 was $23, including $20 of contractual severance and benefits costs and $3 of exit costs.

During the first nine months of 2015, we implemented certain headcount reduction initiatives, primarily in our Commercial Vehicle business in Brazil in response to lower demand in that region. Including costs associated with this action and with other previously announced initiatives, restructuring expense during the first nine months of 2015 was $13, including $11 of severance and benefits costs and $2 of exit costs.

Accrued restructuring costs and activity, including noncurrent portion



	Employee Termination Benefits			Exit Costs			Total
Balance at June 30, 2016	$	9		$	7		$	16
Charges to restructuring	16			1			17
Cash payments	(2		)	(1		)	(3		)
Balance at September 30, 2016	$	23		$	7		$	30

Balance at December 31, 2015	$	9		$	8		$	17
Charges to restructuring	21			3			24
Adjustments of accruals	(1		)				(1		)
Cash payments	(6		)	(4		)	(10		)
Balance at September 30, 2016	$	23		$	7		$	30

At September 30, 2016, the accrued employee termination benefits include costs to reduce approximately 400 employees to be completed over the next two years. The exit costs relate primarily to lease continuation obligations.

Cost to complete — The following table provides project-to-date and estimated future restructuring expenses for completion of our approved restructuring initiatives for our business segments at September 30, 2016.



	Expense Recognized						Future Cost to Complete
	Prior to 2016		2016		Total to Date		Future Cost to Complete
Light Vehicle	$	9	$	1	$	10	$	1
Commercial Vehicle	25		6		31		17
Off-Highway			14		14
Corporate			2		2
Total	$	34	$	23	$	57	$	18

The future cost to complete includes estimated separation costs, primarily those associated with one-time benefit programs, and exit costs through 2021, 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.