Restructuring Activities

12 Months Ended

Dec. 31, 2020

Restructuring and Related Activities [Abstract]

Expenses associated with the Company's restructuring activities are included in Restructuring expense on the Consolidated statements of operations.

2020 Restructuring Activities – In 2020, the Company initiated restructuring activities including a workforce reduction, the termination of certain current and future products, facility changes, optimizing its global independent dealer network, exiting certain international markets, and discontinuing its sales and manufacturing operations in India. The workforce reduction resulted in the termination of approximately 500 employees. In addition, the India action will result in the termination of approximately 70 employees.

Restructuring expenses incurred related to the 2020 restructuring activities were $130.0 million, including $119.1 million in the Motorcycles segment and $10.9 million in the Financial Services segment. The Company expects remaining restructuring expenses related to the 2020 restructuring activities to be approximately $20 million, which is expected to be recognized in 2021 when the actions are completed. The total estimated restructuring activities of approximately $150 million includes approximately $139 million and $11 million expected to be in incurred in the Motorcycles and Financial Services segments, respectively. Total expected restructuring expenses under the 2020 restructuring activities include approximately $30 million related to employee termination benefits, $90 million related to contract termination and other costs and $30 million related to non-current asset adjustments, including accelerated depreciation and other adjustments to the carrying value of non-current assets.

Changes in accrued restructuring expenses for the 2020 restructuring activities, which are included in Accrued liabilities on the Consolidated balance sheets, were as follows as of December 31, (in thousands):


	2020
	Employee Termination Benefits		Contract Terminations & Other		Non-Current Asset Adjustments		Total
Balance, beginning of period	$	—	$	—	$	—	$	—
Restructuring expense	28,913		70,894		30,202		130,009
Utilized – cash	(21,494)		(54,773)		—		(76,267)
Utilized – non cash	—		—		(30,202)		(30,202)
Foreign currency changes	305		75		—		380
Balance, end of period	$	7,724	$	16,196	$	—	$	23,920

2018 Restructuring Activities – In 2018, the Company initiated a plan to further improve its manufacturing operations and cost structure by commencing a multi-year manufacturing optimization plan which includes the consolidation of its motorcycle assembly plant in Kansas City, Missouri, into its plant in York, Pennsylvania, and the closure of its wheel operations in Adelaide, Australia (Manufacturing Optimization Plan). The consolidation of operations resulted in the elimination of approximately 800 jobs at the Kansas City facility and the addition of approximately 450 jobs at the York facility through 2019. The Adelaide facility closure resulted in the elimination of approximately 90 jobs. Through December 31, 2019 the Motorcycles segment incurred cumulative restructuring expenses of $122.2 million and other costs related to temporary inefficiencies of $23.2 million under the Manufacturing Optimization Plan. The Manufacturing Optimization Plan was completed in 2019.

In 2018, the Company initiated a reorganization of its workforce (Reorganization Plan), which was completed in 2019. As a result, approximately 70 employees left the Company on an involuntary basis.

Restructuring expenses for the 2018 Restructuring Activities were limited to the Motorcycles segment and were recorded during 2019 and 2018. Changes in accrued restructuring expenses for the 2018 restructuring activities, which are included in Accrued liabilities on the Consolidated balance sheets during 2019 and 2018 were as follows (in thousands). The changes in accrued restructuring expenses during 2020 related to the 2018 restructuring activities were immaterial.


	2019
	Manufacturing Optimization Plan								Reorganization Plan
	Employee Termination Benefits		Accelerated Depreciation		Other		Total		Employee Termination Benefits		Total
Balance, beginning of period	$	24,958	$	—	$	79	$	25,037	$	3,461	$	28,498
Restructuring expense	15		14,684		17,971		32,670		(317)		32,353
Utilized - cash	(24,102)		—		(16,950)		(41,052)		(3,118)		(44,170)
Utilized - non cash	—		(14,684)		(1,094)		(15,778)		—		(15,778)
Foreign currency changes	(6)		—		(4)		(10)		(26)		(36)
Balance, end of period	$	865	$	—	$	2	$	867	$	—	$	867


	2018
	Manufacturing Optimization Plan								Reorganization Plan
	Employee Termination Benefits		Accelerated Depreciation		Other		Total		Employee Termination Benefits		Total
Balance, beginning of period	$	—	$	—	$	—	$	—	$	—	$	—
Restructuring expense	38,666		34,654		16,182		89,502		3,899		93,401
Utilized - cash	(13,060)		—		(16,095)		(29,155)		(444)		(29,599)
Utilized - non cash	—		(34,654)		—		(34,654)		—		(34,654)
Foreign currency changes	(648)		—		(8)		(656)		6		(650)
Balance, end of period	$	24,958	$	—	$	79	$	25,037	$	3,461	$	28,498

The Company incurred incremental Motorcycles and Related Products cost of goods sold due to temporary inefficiencies resulting from implementing the Manufacturing Optimization Plan during 2019 and 2018 of $10.3 million and $12.9 million, respectively.