

12. Restructuring and Impairment Costs

To better align its resources with its overall strategies and reduce the cost structure of its global operations to address the softness in certain underlying markets, Adient commits to restructuring plans as necessary.

During the first quarter of fiscal 2019, Adient committed to a restructuring plan ("2019 Plan") of $25 million. Of the restructuring costs recorded, $12 million relates to the SS&M segment and $13 million relates to the Seating segment. The restructuring actions relate to cost reduction initiatives and consist primarily of workforce reductions. The restructuring actions are expected to be substantially completed by fiscal 2019.

The following table summarizes the changes in Adient's 2019 Plan reserve:



(in millions)	Employee Severance and Termination Benefits
Original Reserve	$	25
Utilized—cash	(2		)
Balance at December 31, 2018	$	23

In fiscal 2018, Adient committed to a restructuring plan ("2018 Plan") of $71 million that was offset by $20 million of underspend in the 2016 Plan and $7 million of underspend related to other plan years. Of the restructuring costs recorded, $23 million relates to the SS&M segment and $48 million relates to the Seating segment. This is the total amount expected to be incurred for this restructuring plan. The restructuring actions relate to cost reduction initiatives and consist primarily of workforce reductions. The restructuring actions are expected to be substantially completed by fiscal 2019.

The following table summarizes the changes in Adient's 2018 Plan reserve:



(in millions)	Employee Severance and Termination Benefits			Other			Currency Translation			Total
Balance at September 30, 2018	$	49		$	1		$	(2	)	$	48
Utilized—cash	(9		)	—			—			(9		)
Utilized—noncash	—			(1		)	—			(1		)
Balance at December 31, 2018	$	40		$	—		$	(2	)	$	38

In fiscal 2017, Adient committed to a restructuring plan ("2017 Plan") within the Seating segment and recorded $46 million of restructuring and impairment costs in the consolidated statements of income. This is the total amount expected to be incurred for this restructuring plan. The restructuring actions relate to cost reduction initiatives and consist primarily of workforce reductions and plant closures. The restructuring actions are expected to be substantially complete in fiscal 2019.

The following table summarizes the changes in Adient's 2017 Plan reserve:



(in millions)	Employee Severance and Termination Benefits
Balance at September 30, 2018	$	12
Utilized—cash	(1		)
Balance at December 31, 2018	$	11

In fiscal 2016, Adient committed to a restructuring plan ("2016 Plan") and recorded $332 million of restructuring and impairment costs in the consolidated statements of income. This is the total amount expected to be incurred for this restructuring plan. The restructuring actions relate to cost reduction initiatives and consist primarily of workforce reductions, plant closures and asset impairments. Of the restructuring and impairment costs recorded, $217 million relates to the Seating segment, $98 million relates to the SS&M segment and $17 million relates to the Interiors segment. The asset impairment charge recorded during fiscal 2016 related primarily to information technology assets within the Seating segment that will not be used going forward by Adient. The restructuring actions are expected to be substantially complete in fiscal 2021.

Since the announcement of the 2016 Plan in fiscal 2016, Adient has experienced lower employee severance and termination benefit cash payouts than previously calculated of approximately $20 million, due to changes in cost reduction actions. The planned workforce reductions disclosed for the 2016 Plan have been updated for Adient's revised actions.

The following table summarizes the changes in Adient's 2016 Plan reserve:



(in millions)	Employee Severance and Termination Benefits			Currency Translation		Total
Balance at September 30, 2018	$	71		$	4	$	75
Utilized—cash	(2		)	—		(2		)
Balance at December 31, 2018	$	69		$	4	$	73

Adient's fiscal 2019, 2018, 2017 and 2016 restructuring plans included workforce reductions of approximately 6,800. Restructuring charges associated with employee severance and termination benefits are paid over the severance period granted to each employee or on a lump sum basis in accordance with individual severance agreements. As of December 31, 2018, approximately 4,300 of the employees have been separated from Adient pursuant to the restructuring plans. In addition, the restructuring plans included fourteen plant closures. As of December 31, 2018, nine of the fourteen plants have been closed.

Adient's management closely monitors its overall cost structure and continually analyzes each of its businesses for opportunities to consolidate current operations, improve operating efficiencies and locate facilities in low cost countries in close proximity to customers. This ongoing analysis includes a review of its manufacturing, engineering, purchasing and administrative functions, as well as the overall global footprint for all its businesses. Because of the importance of new vehicle sales by major automotive manufacturers to operations, Adient is affected by the general business conditions in the automotive industry. Future adverse developments in the automotive industry could impact Adient's liquidity position, lead to impairment charges and/or require additional restructuring of its operations.