Note 4. Repositioning and Other Charges

	A summary of repositioning and other charges follows:

			Three Months Ended				Nine Months Ended
			September 30,				September 30,
			2011		2010		2011		2010
Severance		$	194	$	64	$	237	$	121
Asset impairments			76		12		86		21
Exit costs			35		5		47		9
Adjustments			(7)		(9)		(21)		(17)
Total net repositioning charge			298		72		349		134

Asbestos related litigation charges,
net of insurance			38		48		116		135
Probable and reasonably estimable
environmental liabilities			76		68		177		169
Other			(2)		24		(5)		42

Total net repositioning and other charges		$	410	$	212	$	637	$	480

The following table summarizes the pretax classification of total net repositioning and other charges by income statement caption:

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2011		2010		2011		2010
Cost of products and services sold	$	343	$	185	$	545	$	445
Selling, general and administrative expenses		67		27		92		35
	$	410	$	212	$	637	$	480

The following table summarizes the pretax impact of total net repositioning and other charges by segment:

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2011		2010		2011		2010
Aerospace	$	38	$	27	$	32	$	33
Automation and Control Solutions		137		34		182		63
Specialty Materials		28		14		41		25
Transportation Systems		120		44		196		149
Corporate		87		93		186		210
	$	410	$	212	$	637	$	480

In the quarter ended September 30, 2011, we recognized repositioning charges totaling $305 million including severance costs of $194 million related to workforce reductions of 2,097 manufacturing and administrative positions across all of our segments. The workforce reductions were primarily related to the planned shutdown of a manufacturing facility in our Transportation Systems segment, factory consolidations and/or rationalizations and an organizational realignment of a business in our Automation and Control Solutions segment, factory transitions in connection with acquisition-related synergies in our Automation and Control Solutions and Aerospace segments, the consolidation of non-U.S. repair facilities in our Aerospace segment, the exit of a product line in our Specialty Materials segment, and cost savings actions taken in connection with our ongoing functional transformation and productivity initiatives. The repositioning charges included asset impairments of $76 million principally related to the write-off of certain intangible assets in our Automation and Control Solutions segment due to a change in branding strategy and manufacturing plant and equipment associated with the planned shutdown of a manufacturing facility and exit of a product line as discussed above. The repositioning charges also included exit costs of $35 million principally for costs to terminate a contract in connection with the exit from a product line in our Aerospace segment and closure obligations associated with the planned shutdown of a manufacturing facility and exit of a product line as discussed above.

In the quarter ended September 30, 2010, we recognized repositioning charges totaling $81 million including severance costs of $64 million related to workforce reductions of 1,188 manufacturing and administrative positions in our Automation and Control Solutions, Aerospace and Specialty Materials segments. The workforce reductions were related to achieving acquisition-related synergies in our Automation and Control Solutions segment, factory transitions in our Automation and Control Solutions and Specialty Materials segments to more cost-effective locations, the exit and/or rationalization of certain product lines in our Specialty Materials segment, and the wind-down of certain programs in the Defense and Space business of our Aerospace segment. The repositioning charges also included asset impairments of $12 million principally related to manufacturing plant and equipment associated with the exit and/or rationalization of certain product lines in our Specialty Materials segment.

In the nine months ended September 30, 2011, we recognized repositioning charges totaling $370 million including severance costs of $237 million related to workforce reductions of 3,043 manufacturing and administrative positions across all of our segments. The workforce reductions were primarily related to the planned shutdown of a manufacturing facility in our Transportation Systems segment, cost savings actions taken in connection with our ongoing functional transformation and productivity initiatives, factory transitions in connection with acquisition-related synergies in our Automation and Control Solutions and Aerospace segments, the exit from and/or rationalization of certain product lines and markets in our Specialty Materials and Automation and Control Solutions segments, the consolidation of repair facilities in our Aerospace segment, and factory consolidations and/or rationalizations and organizational realignments of businesses in our Automation and Control Solutions segment. The repositioning charges included asset impairments of $86 million principally related to the write-off of certain intangible assets in our Automation and Control Solutions segment due to a change in branding strategy and manufacturing plant and equipment associated with the planned shutdown of a manufacturing facility and the exit of a product line and a factory transition as discussed above. The repositioning charges also included exit costs of $47 million principally for costs to terminate contracts related to the exit of a market and product line and a factory transition and closure obligations associated with the planned shutdown of a manufacturing facility and exit of a product line as discussed above. Also, $21 million of previously established accruals, primarily for severance at our Aerospace and Automation and Control Solutions segments, were returned to income in the first nine months of 2011 due principally to fewer employee separations than originally planned associated with prior severance programs.

In the nine months ended September 30, 2010, we recognized repositioning charges totaling $151 million including severance costs of $121 million related to workforce reductions of 2,155 manufacturing and administrative positions across all of our segments. The workforce reductions were primarily related to the planned shutdown of certain manufacturing facilities in our Automation and Control Solutions and Transportation Systems segments, cost savings actions taken in connection with our ongoing functional transformation and productivity initiatives, factory transitions in our Aerospace, Automation and Control Solutions and Specialty Materials segments to more cost-effective locations, achieving acquisition-related synergies in our Automation and Control Solutions segment, and the exit and/or rationalization of certain product lines in our Specialty Materials segment. The repositioning charges also included asset impairments of $21 million principally related to manufacturing plant and equipment associated with the exit and/or rationalization of certain product lines and in facilities scheduled to close. Also, $17 million of previously established accruals, primarily for severance at our Automation and Control Solutions, Transportation Systems and Aerospace segments, were returned to income in the first nine months of 2010 due primarily to fewer employee separations than originally planned associated with prior severance programs.

The following table summarizes the status of our total repositioning reserves:

		Severance		Asset		Exit
		Costs		Impairments		Costs		Total

December 31, 2010	$	276	$	-	$	34	$	310
Charges		237		86		47		370
Usage - cash		(95)		-		(17)		(112)
Usage - noncash		-		(86)		-		(86)
Foreign currency translation		-		-		-		-
Adjustments		(21)		-		-		(21)

September 30, 2011	$	397	$	-	$	64	$	461

Certain repositioning projects in our Aerospace, Automation and Control Solutions and Transportation Systems segments included exit or disposal activities, the costs related to which will be recognized in future periods when the actual liability is incurred. The nature of these exit or disposal costs includes asset set-up and moving, product recertification and requalification, and employee retention, training and travel. The following tables summarize by segment, expected, incurred and remaining exit and disposal costs related to 2011 and 2010 repositioning actions which we were not able to recognize at the time the actions were initiated.


				Automation and		Transportation
2011 Repositioning Actions		Aerospace		Control Solutions		Systems		Total

Expected exit and disposal costs	$	15	$	15	$	7	$	37
Costs incurred during:
Current year-to-date		-		-		-		-
Remaining exit and disposal costs	$	15	$	15	$	7	$	37


				Automation and		Transportation
2010 Repositioning Actions		Aerospace		Control Solutions		Systems		Total

Expected exit and disposal costs	$	11	$	10	$	2	$	23
Costs incurred during:
Year ended December 31, 2010		-		-		-		-
Current year-to-date		(1)		(3)		-		(4)

Remaining exit and disposal costs	$	10	$	7	$	2	$	19

In the quarter ended September 30, 2011, we recognized a charge of $76 million for environmental liabilities deemed probable and reasonably estimable in the quarter. We also recognized a charge of $38 million primarily representing an update to our estimated liability for the resolution of Bendix related asbestos claims as of September 30, 2011, net of probable insurance recoveries. Environmental and Asbestos matters are discussed in detail in Note 15, Commitments and Contingencies.

In the quarter ended September 30, 2010, we recognized a charge of $68 million for environmental liabilities deemed probable and reasonably estimable in the quarter. We also recognized a charge of $48 million primarily representing an update to our estimated liability for the resolution of Bendix related asbestos claims as of September 30, 2010, net of probable insurance recoveries. We also recognized other charges of $24 million in connection with the evaluation of potential resolution of certain legal matters.

In the nine months ended September 30, 2011, we recognized a charge of $177 million for environmental liabilities deemed probable and reasonably estimable in the period. We also recognized a charge of $116 million primarily representing an update to our estimated liability for the resolution of Bendix related asbestos claims as of September 30, 2011, net of probable insurance recoveries.

In the nine months ended September 30, 2010, we recognized a charge of $169 million for environmental liabilities deemed probable and reasonably estimable in the period. We also recognized a charge of $135 million primarily representing an update to our estimated liability for the resolution of Bendix related asbestos claims as of September 30, 2010, net of probable insurance recoveries. We also recognized other charges of $42 million in connection with the evaluation of potential resolution of certain legal matters.