Note 4: Restructuring

The Company initiated restructuring plans in 2010 and prior years due to the decline in demand for its products associated with the global economic crisis and to improve the Company’s operating margins. Execution of these plans was substantially completed during 2010. In 2011, the Company recorded approximately $8.6 million in charges associated with further streamlining of manufacturing operations and other cost reduction initiatives. In addition, the 2011 charges included costs associated with the establishment of a centralized European shared service center in the Czech Republic. The Company substantially completed the restructuring actions commenced in 2011 during 2012. The Company recorded charges related to 2011 plans of $1.1 million for the year ended December 31, 2012.

In addition, in 2012 the Company launched a broader restructuring program designed to optimize the Company’s global manufacturing footprint, better serve customers and expand margins. The initial phase of the global restructuring effort was commenced in the first quarter of 2012. These restructuring actions were primarily focused on the European and North American operations included in the Industrial Products Group reportable segment. These actions, once completed, will reduce the Company’s global headcount by approximately 7%. In addition, the Company closed three production facilities in 2012, including two facilities in the U.S. and one in Sweden. The Company expects to close an additional facility in the UK in 2013. The Company recorded charges related to the initial phase of the restructuring plans of $17.5 million for the year ended December 31, 2012. The Company expects to complete the specific steps contemplated by this initial phase by the end of 2013 and to incur related additional charges of approximately $6.9 million.

On August 16, 2012, the Company announced the launch of phase two of the restructuring program, which is primarily focused on the European operations included in the Industrial Products Group reportable segment. Phase two involves further reductions in the number of manufacturing facilities and associated headcount. Phase two of the program is subject to required consultations with local stakeholders, including employee representatives, and will continue until the end of 2015.

The Company expects to incur severance and other employment related benefit costs in the range of $60 to $65 million and other costs in the range of $15 to $20 million for phase one and phase two of the restructuring program. Non-cash charges, primarily related to fixed assets, are expected to be in the range of $10 to $15 million.

Charges recorded in connection with restructuring plans are included in “Other operating expense, net” in the Consolidated Statements of Operations, and are summarized for the years ended December 31, 2012, 2011, and 2010 by reportable segment as follows:


	Industrial Products Group		Engineered Products Group			Total
2010	$	3,687		(1,491	)		2,196
2011		6,621		1,963			8,584
2012		14,761		3,909			18,670
Total	$	25,069		4,381			29,450

The following table summarizes the activity in the restructuring accrual accounts for the years ended December 31, 2012, 2011, and 2010:


	Termination Benefits			Other			Total
Balance at December 31, 2009	$	17,325			3,655			20,980
Charged to expense		711			1,485			2,196
Paid		(10,246	)		(3,627	)		(13,873	)
Other, net (primarily foreign currency translation)		(3,197	)		(63	)		(3,260	)
Balance at December 31, 2010	$	4,593			1,450			6,043
Charged to expense		6,272			2,312			8,584
Paid		(7,710	)		(2,684	)		(10,394	)
Other, net (primarily foreign currency translation)		33			216			249
Balance at December 31, 2011	$	3,188			1,294			4,482
Charged to expense		15,348			3,322			18,670
Paid		(11,730	)		(3,725	)		(15,455	)
Other, net (primarily foreign currency translation)		(315	)		165			(150	)
Balance at December 31, 2012	$	6,491			1,056			7,547