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Restructuring | 9 Months Ended
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Sep. 30, 2019
Restructuring And Related Activities [Abstract] |
Restructuring | Note 5 – Restructuring Manufacturing Footprint Rationalization On September 23, 2019, the Company committed to a restructuring plan to improve the Company’s manufacturing productivity and rationalize its footprint. Under this plan, the Company will relocate and consolidate certain existing automotive manufacturing and, as a result, certain other activities, overall reducing the number of plants by two. During the third quarter of 2019, the Company recognized expense of $5,200 for employee separation costs that will be paid pursuant to the terms of statutory requirements of the affected locations. Additionally, the Company recognized $1,612 of accelerated depreciation and fixed asset impairment. The Company expects to incur total costs of between $20,000 and $24,000, of which between $17,000 and $21,000 are expected to be cash expenditures. The total expected costs include employee separation costs of between $9,000 and $11,000, capital expenditures of between $4,500 and $5,500 and non-cash expenses for accelerated depreciation and impairment of fixed assets of approximately $3,000. The Company also expects to incur other transition costs including recruiting, relocation, and machinery and equipment move and set up costs of between $3,500 and $4,500. The actions under this plan are expected to be substantially completed by the end of 2021. The actual timing, costs and savings of the Plan may differ materially from the Company’s current expectations and estimates. Other Restructuring Activities As part of the Company’s continued efforts to optimize its cost structure, the Company has undertaken several discrete restructuring actions. During the three and nine months ended September 30, 2019, the Company recognized $1,467 and $2,726 of employee separation costs, respectively, and $385 and $734 of other related costs, respectively. These restructuring expenses were primarily associated with restructuring actions focused on the rotation of our manufacturing footprint to lower cost locations and the reduction of global overhead costs. These discrete restructuring actions are expected to approximate the total cumulative costs for those actions. The Company will continue to explore opportunities to improve its future profitability and competitiveness. These actions may result in the recognition of additional restructuring charges that could be material. During the three and nine months ended September 30, 2018, the Company recognized $3,303 and $5,040 of employee separation costs, respectively, and $1,332 and $2,831 of other related costs, respectively. Advanced Research and Development Rationalization and Site Consolidation In June 2018, Gentherm completed the sale of its battery management systems division located in Irvine, California. A loss on the sale of $1,107 was recognized in restructuring expenses during nine months ended September 30, 2018. An additional asset impairment loss of $0 and $425 was recognized during the three and nine months ended September 30, 2019. During the three and nine months ended September 30, 2018, Gentherm recognized employees separation costs of $157 and $1,038, respectively, and $589 and $1,024 of other related costs associated with the closure of two leased facilities located in Azusa, California. The Company also recognized $50 and $1,250 for the three and nine months ended September 30, 2018, for the disposal of long-lived assets controlled and used in Azusa, California. The Company has recorded approximately $4,669 of restructuring expenses since inception of this program and it is considered complete. GPT and CSZ-IC During 2018, Gentherm launched a program to actively market GPT and CSZ-IC. Costs associated with the divestiture process were classified as restructuring. During the three and nine months ended September 30, 2019, the Company recognized $0 and $251 of employee separation costs, respectively, and $0 and $861 of other related costs, respectively. During the three and nine months ended September 30, 2018, the Company recognized $262 and $472 of employee separation costs, and $125 and $125 of other related costs, respectively. The Company has recorded approximately $2,173 of restructuring expenses since inception of this program and it is considered substantially complete. Restructuring Expenses By Reporting Segment The following table summarizes restructuring activity for the three and nine months ended September 30, 2019 and 2018 by reporting segment:
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Automotive |  | $ | 7,820 |  |  | $ | 2,919 |  |  | $ | 9,016 |  |  | $ | 4,038 |
Industrial |  |  | 88 |  |  |  | 1,486 |  |  |  | 1,689 |  |  |  | 5,320 |
Reconciling Items |  |  | 756 |  |  |  | 1,413 |  |  |  | 1,104 |  |  |  | 3,540 |
Total |  | $ | 8,664 |  |  | $ | 5,818 |  |  | $ | 11,809 |  |  | $ | 12,898 |
Restructuring Liability Restructuring liabilities are classified as accrued liabilities on the consolidated condensed balance sheets. The following table summarizes restructuring activity for the nine months ended September 30, 2019:
|  | Employee Separation Costs |  |  | Accelerated Depreciation and Asset Impairment Charges |  |  | Other related costs |  |  | Total |
Balance at December 31, 2018 |  | $ | 2,079 |  |  | $ | — |  |  | $ | 468 |  |  | $ | 2,547 |
Additions, charged to restructuring expenses |  |  | 8,177 |  |  |  | 2,037 |  |  |  | 1,595 |  |  |  | 11,809 |
Cash payments |  |  | (4,069 | ) |  |  | — |  |  |  | (1,458 | ) |  |  | (5,527 | )
Non-cash utilization |  |  | — |  |  |  | (2,037 | ) |  |  | — |  |  |  | (2,037 | )
Reclassification to lease liability |  |  | — |  |  |  | — |  |  |  | (193 | ) |  |  | (193 | )
Balance at September 30, 2019 |  | $ | 6,187 |  |  | $ | — |  |  | $ | 412 |  |  | $ | 6,599 |

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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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