Restructuring and Impairment Costs

3 Months Ended

Dec. 31, 2019

Restructuring and Related Activities [Abstract]

Restructuring and Impairment Costs

13. 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 2020, Adient committed to a restructuring plan ("2020 Plan") of $7 million that was offset by $5 million of prior year underspend. Of the restructuring costs recorded, $3 million relates to the Americas segment, $2 million relates to the EMEA segment and $2 million relates to the Asia 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 2021.

The following table summarizes the changes in Adient's 2020 Plan reserve:

(in millions)	Employee Severance and Termination Benefits		Other		Currency Translation		Total
Original Reserve	$	6	$	1	$	—	$	7
Utilized—cash	(1)		—		—		(1)
Utilized—noncash	—		—		(1)		(1)
Balance at December 31, 2019	$	5	$	1	$	(1)	$	5

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

(in millions)	Employee Severance and Termination Benefits		Other		Currency Translation		Total
Balance at September 30, 2019	$	69	$	3	$	(2)	$	70
Utilized—cash	(9)		—		—		(9)
Utilized—noncash	—		—		—		—
Noncash adjustment—underspend	(2)		—		1		(1)
Balance at December 31, 2019	$	58	$	3	$	(1)	$	60

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

(in millions)	Employee Severance and Termination Benefits		Currency Translation		Total
Balance at September 30, 2019	$	24	$	(4)	$	20
Utilized—cash	(5)		—		(5)
Utilized—noncash	—		—		—
Noncash adjustment—underspend	(3)		1		(2)
Balance at December 31, 2019	$	16	$	(3)	$	13

There were no material changes during the first quarter of fiscal 2020 to the 2017 Plan's $5 million reserve balance.

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, 2019	$	25	$	2	$	27
Utilized—cash	(2)		—		(2)
Utilized—noncash	—		—		—
Noncash adjustment—underspend	—		—		—
Balance at December 31, 2019	$	23	$	2	$	25

Adient's fiscal 2020, 2019, 2018, 2017 and 2016 restructuring plans included workforce reductions of approximately 8,900. 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, 2019, approximately 6,200 of the employees have been separated from Adient pursuant to the restructuring plans. In addition, the restructuring plans included eighteen plant closures. As of December 31, 2019, fifteen of the eighteen 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.