Restructuring Activities

12 Months Ended

Dec. 31, 2021

Restructuring and Related Activities [Abstract]

Restructuring Activities

Restructuring Activities

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 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 resulted in the termination of approximately 70 employees.

Since the inception of the 2020 restructuring activities, the Company has incurred cumulative restructuring expenses of $133.4 million, including $121.8 million and $11.6 million in the Motorcycles and Financial Services segments, respectively. The Company does not expect restructuring expenses of any significance in 2022.

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):

	2021
	Employee Termination Benefits		Contract Terminations & Other		Non-Current Asset Adjustments		Total
Balance, beginning of period	$	7,724	$	16,196	$	—	$	23,920
Restructuring (benefit) expense	(1,400)		4,405		410		3,415
Utilized – cash	(6,025)		(17,608)		—		(23,633)
Utilized – non cash	—		—		(410)		(410)
Foreign currency changes	(178)		(119)		—		(297)
Balance, end of period	$	121	$	2,874	$	—	$	2,995
	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 included 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 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 (benefit)	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

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 of $10.3 million.