Restructuring and Acquisition-Related Costs (Notes)

9 Months Ended

Sep. 30, 2022

Restructuring and Related Activities [Abstract]

Business Acquisition, Integration, Restructuring and Other Related Costs [Text Block]

2. RESTRUCTURING AND ACQUISITION-RELATED COSTS

In the first quarter of 2020, we initiated a new global restructuring program (the 2020 Program). The primary objectives of the 2020 Program are to achieve efficiencies within our corporate and business unit support teams to reduce cost in our business, and to structurally adjust our operations to a new level of market demand based on the impact of COVID-19. We expect to incur costs under the 2020 Program through 2022.

In the second quarter of 2021, we completed the acquisition of a manufacturing facility in Emporium, Pennsylvania (Emporium), and subsequently determined that we will cease production at the facility in 2022 and relocate the production capacity to other AAM manufacturing facilities. As a result, during the nine months ended September 30, 2022, we incurred restructuring charges related to the anticipated closure of the facility and expect to incur costs associated with the closure of the facility through 2022.

A summary of our restructuring activity for the first nine months of 2022 and 2021 is shown below:


	Severance Charges		Implementation Costs		Total
	(in millions)
Accrual at December 31, 2020	$	1.7	$	9.8	$	11.5
Charges	2.7		33.2		35.9
Cash utilization	(3.9)		(39.7)		(43.6)


Accrual at September 30, 2021	$	0.5	$	3.3	$	3.8

Accrual at December 31, 2021	$	0.7	$	2.7	$	3.4
Charges	3.4		15.8		19.2
Cash utilization	(1.3)		(13.9)		(15.2)


Accrual at September 30, 2022	$	2.8	$	4.6	$	7.4

As part of our restructuring actions, we incurred total severance charges of approximately $3.4 million and $2.7 million during the nine months ended September 30, 2022 and 2021, respectively. We also incurred total implementation costs of approximately $15.8 million and $33.2 million during the nine months ended September 30, 2022 and 2021, respectively. Implementation costs consist primarily of professional fees and plant exit costs.

We incurred $12.4 million of restructuring costs under the 2020 Program and incurred $6.8 million of costs associated with the anticipated closure of Emporium in the nine months ended September 30, 2022. We have incurred $99.7 million of total restructuring costs under the 2020 Program since inception and have incurred $10.5 million of total costs related to the anticipated closure of Emporium.

Approximately $1.3 million and $12.0 million of our total restructuring costs for the nine months ended September 30, 2022 related to our Driveline and Metal Forming segments, respectively, while the remainder were corporate costs. Approximately $3.9 million and $3.1 million of our total restructuring costs for the nine months ended September 30, 2021 related to our Driveline and Metal Forming segments, respectively, while the remainder were corporate costs. We expect to incur approximately $20 million to $30 million of total restructuring charges in 2022 associated with the 2020 Program, our closure of Emporium and potential restructuring actions related to our acquisition of the Tekfor Group (Tekfor).

On June 1, 2022, our acquisition of Tekfor became effective. The following table represents a summary of acquisition-related charges incurred primarily related to our acquisition of Tekfor, as well as integration costs incurred for acquisitions:


	Acquisition-Related Costs		Integration Expenses		Total
	(in millions)
Charges for the nine months ended September 30, 2022	$	5.8	$	1.4	$	7.2
Charges for the nine months ended September 30, 2021	0.3		4.6		4.9

Acquisition-related costs primarily consist of advisory, legal, accounting, valuation and certain other professional or consulting fees incurred. Integration expenses primarily reflect costs incurred for information technology infrastructure and enterprise resource planning systems, and consulting fees incurred in conjunction with integration activities. Total restructuring charges and acquisition-related charges are presented on a separate line item titled Restructuring and acquisition-related costs in our Condensed Consolidated Statements of Operations and totaled $7.9 million and $26.4 million for the three and nine months ended September 30, 2022, respectively, and $7.4 million and $40.8 million for the three and nine months ended September 30, 2021, respectively.