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Costs Associated with Rationalization Programs | 6 Months Ended
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Jun. 30, 2021
Restructuring And Related Activities [Abstract] |
Costs Associated with Rationalization Programs | NOTE 4. COSTS ASSOCIATED WITH RATIONALIZATION PROGRAMS In order to maintain our global competitiveness, we have implemented rationalization actions over the past several years to reduce high-cost and excess manufacturing capacity and operating and administrative costs. The following table presents a roll-forward of the liability balance between periods:
|  | Associate- |  |  |  |  |  |  |
(In millions) |  | Related Costs |  |  | Other Costs |  |  | Total |
Balance at December 31, 2020 |  | $ | 200 |  |  | $ | — |  |  | $ | 200 |
2021 Charges |  |  | 48 |  |  |  | 20 |  |  |  | 68 |
Incurred, net of foreign currency translation of $(5) million and $0 million, respectively |  |  | (108 | ) |  |  | (20 | ) |  |  | (128 | )
Reversed to the Statement of Operations |  |  | — |  |  |  | — |  |  |  | — |
Balance at June 30, 2021 |  | $ | 140 |  |  | $ | — |  |  | $ | 140 |
During the first quarter of 2021, we approved a plan primarily designed to reduce SAG in Europe, Middle East and Africa (“EMEA”). We have $19 million accrued related to this plan at June 30, 2021, which is expected to be substantially paid through 2021. During the first quarter of 2021, we increased by $32 million the estimated total cost of our previously announced plan to permanently close our Gadsden, Alabama tire manufacturing facility (“Gadsden”), primarily to reflect our decision to transfer additional machinery and equipment from Gadsden to other tire manufacturing facilities. We have $22 million accrued at June 30, 2021 related to this plan, which is expected to be substantially paid through 2021. In addition, we increased by $8 million and $29 million in the second quarter and first half of 2021, respectively, the estimated total cost of our previously announced plan to modernize two of our tire manufacturing facilities in Germany, primarily to increase expected associate severance costs based on actual payout history to date and the mix of associates electing lump sum vs. annuity settlements. We have $53 million accrued at June 30, 2021 related to this plan, which is expected to be substantially paid through 2022. The remainder of the accrual balance at June 30, 2021 is expected to be substantially utilized in the next 12 months and includes $12 million related to global plans to reduce SAG headcount, $8 million related to plans to reduce manufacturing headcount and improve operating efficiency in EMEA, $6 million related to the closed Amiens, France tire manufacturing facility, and $5 million related to a plan primarily to offer voluntary buy-outs to certain associates at Gadsden. The following table shows net rationalization charges included in Income (Loss) before Income Taxes:
|  | Three Months Ended |  |  | Six Months Ended |
|  | June 30, |  |  | June 30, |
(In millions) |  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Current Year Plans |  |  |  |  |  |  |  |  |  |  |  |
Associate Severance and Other Related Costs |  | $ | — |  |  | $ | 64 |  |  | $ | 20 |  |  | $ | 66 |
Benefit Plan Curtailments/Settlements/Termination Benefits |  |  | — |  |  |  | 5 |  |  |  | — |  |  |  | 5 |
Other Exit Costs |  |  | — |  |  |  | 2 |  |  |  | — |  |  |  | 2 |
Current Year Plans - Net Charges |  | $ | — |  |  | $ | 71 |  |  | $ | 20 |  |  | $ | 73 |
Prior Year Plans |  |  |  |  |  |  |  |  |  |  |  |
Associate Severance and Other Related Costs |  | $ | 8 |  |  | $ | 27 |  |  | $ | 28 |  |  | $ | 33 |
Benefit Plan Curtailments/Settlements/Termination Benefits |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (4 | )
Other Exit Costs |  |  | 10 |  |  |  | 1 |  |  |  | 20 |  |  |  | 6 |
Prior Year Plans - Net Charges |  |  | 18 |  |  |  | 28 |  |  |  | 48 |  |  |  | 35 |
Total Net Charges |  | $ | 18 |  |  | $ | 99 |  |  | $ | 68 |  |  | $ | 108 |
Asset Write-off and Accelerated Depreciation Charges(1) |  | $ | — |  |  | $ | 86 |  |  | $ | — |  |  | $ | 90 |
(1) Asset write-off and accelerated depreciation charges for the three and six months ended June 30, 2020 are primarily related to the permanent closure of Gadsden. Substantially all of the new charges for the three and six months ended June 30, 2021 and 2020 related to future cash outflows. Net current year plan charges for the six months ended June 30, 2021 primarily related to a plan to reduce SAG headcount in EMEA. Net current year plan charges for the three and six months ended June 30, 2020 primarily related to the permanent closure of Gadsden, including a $5 million termination benefits charge for one of our defined benefit pension plans. Net prior year plan charges for the three and six months ended June 30, 2021 included $7 million and $21 million, respectively, related to the modernization of two of our tire manufacturing facilities in Germany, $9 million and $17 million, respectively, related to Gadsden, and $2 million and $8 million, respectively, related to various plans to reduce manufacturing headcount and improve operating efficiency in EMEA. Net prior year plan charges for the three and six months ended June 30, 2020 included $25 million related to additional termination benefits for associates at the closed Amiens, France manufacturing facility. Refer to Note to the Consolidated Financial Statements No. 13, Commitments and Contingent Liabilities. In addition, net prior year plan charges for the six months ended June 30, 2020 included $6 million related to the plan to modernize two of our tire manufacturing facilities in Germany and $4 million related to the plan primarily to offer voluntary buy-outs to certain associates at Gadsden. Net prior year plan charges for the six months ended June 30, 2020 also included a curtailment credit of $4 million for a postretirement benefit plan related to the exit of employees under an approved rationalization plan. Ongoing rationalization plans had approximately $740 million in charges incurred prior to 2021 and approximately $70 million is expected to be incurred in future periods. Approximately 60 associates will be released under new plans initiated in 2021. In the first six months of 2021, approximately 200 associates were released under plans initiated in prior years. Approximately 30 0 associates remain to be released under all ongoing rationalization plans.

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- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI http://asc.fasb.org/topic&trid=2175745 + Details
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