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Costs Associated with Rationalization Programs | 9 Months Ended
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Sep. 30, 2024
Restructuring and Related Activities [Abstract] |
Costs Associated with Rationalization Programs | NOTE 3. COSTS ASSOCIATED WITH RATIONALIZATION PROGRAMS In order to improve our global competitiveness and as part of our execution of the Goodyear Forward transformation plan ("Goodyear Forward"), we have implemented, and are implementing, rationalization actions 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, 2023 |  | $ | 518 |  |  | $ | 16 |  |  | $ | 534 |
2024 Charges |  |  | 35 |  |  |  | 42 |  |  |  | 77 |
Incurred, net of foreign currency translation of $5 million and $0 million, respectively |  |  | (89 | ) |  |  | (55 | ) |  |  | (144 | )
Reversed to the Statement of Operations |  |  | (25 | ) |  |  | — |  |  |  | (25 | )
Balance at September 30, 2024 |  | $ | 439 |  |  | $ | 3 |  |  | $ | 442 |
During the third quarter of 2024, as part of Goodyear Forward, we approved two rationalization plans to reduce Selling, Administrative and General expense ("SAG") and manufacturing costs, primarily in North America and Corporate functional areas. The plans include approximately 190 net headcount reductions as of the end of the third quarter. Total pre-tax charges are expected to be $9 million, substantially all of which are expected to be cash charges primarily for associate-related costs. During the third quarter of 2024, we accrued approximately $6 million for these plans, which is expected to be substantially paid through 2024. During the second quarter of 2024, we approved a rationalization plan to open a shared service center in Costa Rica and to exit certain Commercial Tire and Service Center (“CTSC”) locations. Total pre-tax charges are expected to be $28 million, of which $18 million are expected to be cash charges primarily for associate-related costs. Non-cash charges are expected to be $10 million, consisting of accelerated lease amortization and pension settlement costs. We have approximately $10 million accrued for this plan at September 30, 2024, which is expected to be substantially paid through the end of 2025. During the first quarter of 2024, we approved a rationalization plan in Asia Pacific to permanently close our Malaysia tire manufacturing facility as part of our strategy to improve profitability and reduce production costs. We have approximately $3 million accrued for this plan at September 30, 2024, which is expected to be substantially paid through the first quarter of 2025. The remainder of the accrual balance at September 30, 2024 includes $253 million related to the closures of our Fulda, Germany ("Fulda") and our Fürstenwalde, Germany ("Fürstenwalde") tire manufacturing facilities, $130 million related to the rationalization and workforce reorganization plan in Europe, Middle East and Africa ("EMEA"), which reflects $19 million of reversals due to voluntary attrition, $11 million related to the plan to improve profitability in Australia and New Zealand, $8 million related to plans to reduce SAG headcount, $5 million related to the closed Amiens, France tire manufacturing facility, $4 million related to a global workforce reorganization plan to improve our cost structure, $3 million related to the closure of Cooper Tire's Melksham, United Kingdom tire manufacturing facility ("Melksham"), $3 million related to the plan to streamline our EMEA distribution network, and various other plans to reduce headcount and improve operating efficiency. At September 30, 2024 and December 31, 2023, $358 million and $239 million were recorded in Other Current Liabilities in the Consolidated Balance Sheets, respectively. The following table shows net rationalization charges included in Income (Loss) before Income Taxes:
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, |  |  | September 30, |
(In millions) |  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Current Year Plans |  |  |  |  |  |  |  |  |  |  |  |
Associate Severance and Other Related Costs |  | $ | 6 |  |  | $ | 187 |  |  | $ | 29 |  |  | $ | 262 |
Other Exit Costs |  |  | 1 |  |  |  | 3 |  |  |  | 2 |  |  |  | 16 |
Current Year Plans - Net Charges |  | $ | 7 |  |  | $ | 190 |  |  | $ | 31 |  |  | $ | 278 |
Prior Year Plans |  |  |  |  |  |  |  |  |  |  |  |
Associate Severance and Other Related Costs |  | $ | (11 | ) |  | $ | (2 | ) |  | $ | (19 | ) |  | $ | — |
Other Exit Costs |  |  | 15 |  |  |  | 10 |  |  |  | 40 |  |  |  | 24 |
Prior Year Plans - Net Charges |  | $ | 4 |  |  | $ | 8 |  |  | $ | 21 |  |  | $ | 24 |
Total Net Charges |  | $ | 11 |  |  | $ | 198 |  |  | $ | 52 |  |  | $ | 302 |
Asset write-offs (recoveries), accelerated depreciation, and accelerated lease costs, net |  | $ | 25 |  |  | $ | 8 |  |  | $ | 119 |  |  | $ | 21 |
Substantially all of the new charges for the three and nine months ended September 30, 2024 and 2023 relate to future cash outflows. Net current year plan charges for the three months ended September 30, 2024 primarily relate to the plans to reduce SAG and manufacturing headcount. Net current year plan charges for the nine months ended September 30, 2024 also include the plan to open a new shared service center in Costa Rica, and the closure of our tire manufacturing facility in Malaysia. Net current year plan charges for the three months ended September 30, 2023 primarily relate to the rationalization and workforce reorganization plan in EMEA and the plan to improve profitability in Asia Pacific. Net current year plan charges for the nine months ended September 30, 2023 also include the plan to reduce production capacity at Fulda, the plan to streamline our EMEA distribution network, a plan to reduce costs associated with our global operations and technology organization, and a plan to reduce manufacturing staffing levels and capacity in EMEA. Net prior year plan charges for the three months ended September 30, 2024 include $7 million related to the closures of Fulda and Fürstenwalde, $4 million related to the workforce reorganization plan in EMEA, $2 million related to the closure of Melksham, $1 million related to our closure of certain retail and warehouse locations in Americas, $1 million related to plans to reduce SAG headcount, $1 million related to the permanent closure of our Gadsden, Alabama tire manufacturing facility ("Gadsden"), and reversals of $12 million primarily related to voluntary attrition. Net prior year plan charges for the nine months ended September 30, 2024 include $15 million related to the closures of Fulda and Fürstenwalde, $9 million related to the closure of Melksham, $4 million related to the workforce reorganization plan in EMEA, $3 million related to the plan in Australia and New Zealand, $3 million related to the permanent closure of Gadsden, $3 million related to the closure of certain retail and warehouse locations in Americas, $2 million related to plans to reduce SAG headcount, $2 million related to the plan to streamline our EMEA distribution network, $1 million related to a plan in South Africa, $1 million related to the integration of Cooper Tire, and reversals of $25 million primarily related to voluntary attrition. Net prior year plan charges for the three months ended September 30, 2023 include $3 million related to the closure of Melksham, $3 million related to the integration of Cooper Tire, $1 million related to a plan in South Africa, $1 million related to the permanent closure of Gadsden, and reversals of $1 million for actions no longer needed for their originally intended purpose. Net prior year plan charges for the nine months ended September 30, 2023 include $9 million related to the closure of Melksham, $7 million related to the integration of Cooper Tire, $5 million for various plans to reduce global SAG headcount, $4 million related to the permanent closure of Gadsden, $2 million related to discontinued operations in Russia, $1 million related to a plan in South Africa, and reversals of $7 million for actions no longer needed for their originally intended purpose. Asset write-offs (recoveries), accelerated depreciation, and accelerated lease costs for both the three and nine months ended September 30, 2024 primarily relate to plans to improve our cost structure through announced closures of our Fulda, Fürstenwalde and Malaysia tire manufacturing facilities, as well as the closure of a development center and warehouse in the U.S. Asset write-offs (recoveries) and accelerated depreciation for the three months ended September 30, 2023 primarily relate to the integration of Cooper Tire and the closure of Melksham. Asset write-offs (recoveries) and accelerated depreciation for the nine months ended September 30, 2023 primarily relate to the integration of Cooper Tire and the closure of Melksham, partially offset by recoveries of previously written-off accounts receivable and other assets in Russia. Ongoing rationalization plans had approximately $920 million in charges incurred prior to 2024 and have approximately $200 million in expected charges to be incurred in future periods. Approximately 950 associates will be released under plans initiated in 2024, of which approximately 750 were released through September 30, 2024. In the first nine months of 2024, approximately 1,100 associates were released under plans initiated in prior years. Approximately 2,350 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 -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 5.P.4.e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479823/420-10-S99-2 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482017/420-10-50-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482017/420-10-50-1 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/420/tableOfContent Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482017/420-10-50-1 + Details
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