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Costs Associated with Rationalization Programs | 9 Months Ended
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Sep. 30, 2022
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, and, more recently, related to the integration of Cooper Tire. 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, 2021 |  | $ | 88 |  |  | $ | — |  |  | $ | 88 |
2022 Charges |  |  | 69 |  |  |  | 18 |  |  |  | 87 |
Incurred, net of foreign currency translation of $(8) million and $0 million, respectively |  |  | (62 | ) |  |  | (18 | ) |  |  | (80 | )
Reversed to the Statement of Operations |  |  | (5 | ) |  |  | — |  |  |  | (5 | )
Balance at September 30, 2022 |  | $ | 90 |  |  | $ | — |  |  | $ | 90 |
On October 13, 2022, the Company approved a plan that primarily proposes to close Cooper Tire's Melksham, United Kingdom tire manufacturing facility ("Melksham") to address long-standing competitiveness issues at that plant. Total expected charges related to the proposed plan are between $80 million and $90 million, of which $60 million to $70 million are expected to be cash charges primarily for associate-related and other exit costs, with the remainder representing non-cash charges primarily for accelerated depreciation and other asset-related charges. The proposed plan will result in approximately 340 job reductions. We have $32 million accrued related to this plan at September 30, 2022 and expect that the majority of the remaining charges and cash outflows associated with this plan will occur in 2023. The proposed plan remains subject to consultation with relevant employee representative bodies. During the third quarter of 2022, we approved a plan related to the exit of our retail operations in South Africa. Total expected charges related to the plan are $18 million, primarily representing cash charges for associate-related and other exit costs. The plan will result in approximately 930 job reductions. We have $10 million accrued related to this plan at September 30, 2022, and expect that the majority of the remaining charges and cash outflows associated with this plan will occur in the fourth quarter of 2022. During the second quarter of 2022, we approved a plan related to the integration of Cooper Tire aimed at reducing duplicative global SAG headcount and closing redundant Cooper Tire warehouse locations in Americas in line with previously announced planned synergies. We hav e $17 million accrued related to this plan at September 30, 2022, which is expected to be substantially paid through 2023. The remainder of the accrual balance at September 30, 2022 is expected to be substantially utilized in the next 12 months and include s $15 mi llion related to plans to reduce SAG headcount, $4 million related to the closed Amiens, France tire manufacturing facility, $3 million related to the permanent closure of our Gadsden, Alabama tire manufacturing facility ("Gadsden"), and various other plans to reduce headcount and improve operating efficiency. The following table shows net rationaliza tion charges included in Income before Income Taxes:
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, |  |  | September 30, |
(In millions) |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Current Year Plans |  |  |  |  |  |  |  |  |  |  |  |
Associate Severance and Other Related Costs |  | $ | 39 |  |  | $ | — |  |  | $ | 61 |  |  | $ | 20 |
Other Exit Costs |  |  | 1 |  |  |  | — |  |  |  | 1 |  |  |  | — |
Current Year Plans - Net Charges |  | $ | 40 |  |  | $ | — |  |  | $ | 62 |  |  | $ | 20 |
Prior Year Plans |  |  |  |  |  |  |  |  |  |  |  |
Associate Severance and Other Related Costs |  | $ | — |  |  | $ | 2 |  |  | $ | 4 |  |  | $ | 30 |
Other Exit Costs |  |  | 5 |  |  |  | 11 |  |  |  | 16 |  |  |  | 31 |
Prior Year Plans - Net Charges |  | $ | 5 |  |  | $ | 13 |  |  | $ | 20 |  |  | $ | 61 |
Total Net Charges |  | $ | 45 |  |  | $ | 13 |  |  | $ | 82 |  |  | $ | 81 |
Asset Write-off and Accelerated Depreciation Charges |  | $ | 6 |  |  | $ | 1 |  |  | $ | 6 |  |  | $ | 1 |
Substantially all of the new charges for the three and nine months ended September 30, 2022 and 2021 relate to future cash outflows. Net current year plan charges for the three and nine months ended September 30, 2022 are related to the proposed Melksham plan, the Cooper Tire integration-related plan, and the plan to exit our retail operations in South Africa. Net current year plan charges for the nine months ended September 30, 2021 primarily related to a plan to reduce SAG headcount in Europe, Middle East and Africa (“EMEA”). Net prior year plan charges for the three and nine months ended September 30, 2022 included $4 million and $14 million, respectively, related to Gadsden, $1 million and $7 million, respectively, related to the modernization of two of our tire manufacturing facilities in Germany, and reversals of $3 million and $5 million, respectively, for actions no longer needed for their originally intended purpose. Net prior year plan charges for the three and nine months ended September 30, 2021 included $11 million and $28 million, respectively, related to Gadsden, $2 million and $24 million, respectively, related to the modernization of two of our tire manufacturing facilities in Germany, and $1 million and $9 million, respectively, related to various other plans to reduce headcount and improve operating efficiency in EMEA. Ongoing rationalization plans had approximately $830 million in charges incurred prior to 2022 and approximately $120 million is expected to be incurred in future periods. Approximately 1,760 associates will be released under the plans initiated in 2022, of which approximately 170 were released through September 30, 2022. In the first nine months of 2022, approximately 100 associates were released under plans initiated in prior years. Approximately 1,700 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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 5.P.4(e)) -URI https://asc.fasb.org/extlink&oid=115931487&loc=d3e140904-122747 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI https://asc.fasb.org/topic&trid=2175745 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (e) -URI https://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (b)(2) -URI https://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 + Details
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