Restructuring and Impairment Costs

12 Months Ended

Sep. 30, 2024

Restructuring and Related Activities [Abstract]

15. Restructuring and Impairment Costs

Restructuring

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. Adient, in general, records costs associated with separation programs when management has approved the plan for separation, the affected employees are identified, and it is unlikely that actions required to complete the separation plan will change significantly. Costs associated with benefits that are contingent on the employee continuing to provide service are accrued over the required service period. All other costs associated with restructuring activities are expensed as incurred.

During fiscal 2024, Adient committed to a restructuring plan of $169 million that was offset by prior period underspend of $1 million and $9 million of cost reimbursement committed by a customer. The fiscal 2024 charges are mostly related to termination benefits in Europe. The 2024 Plan is being implemented in response to the macroeconomic factors occurring in the European automotive market causing reduced production volumes and to ensure Adient maintains a competitive cost structure by reducing operating, administrative and engineering costs, and increasing efficiencies. Restructuring actions associated with these specific plans will primarily occur in fiscal years 2025 and 2026 and are expected to be substantially complete by fiscal year 2027. Restructuring costs are included in restructuring and impairment costs in the consolidated statements of income. The following tables summarize the changes in Adient's restructuring reserve.


(in millions)	Employee Severance and Termination Benefits		Currency Translation and Other		Total
Balance at September 30, 2021	$	112	$	3	$	115
2022 Plan charges	25		—		25
Utilized - cash	(57)		—		(57)
Noncash adjustment - (under) overspend and other	(11)		(12)		(23)
Balance at September 30, 2022	$	69	$	(9)	$	60
2023 Plan charges	39		—		39
Utilized - cash	(53)		—		(53)
Noncash adjustment - (under) overspend and other	1		4		5
Balance at September 30, 2023	$	56	$	(5)	$	51
2024 Plan charges	169		—		169
Utilized - cash	(43)		—		(43)
Noncash adjustment - (under) overspend and other	(1)		6		5
Balance at September 30, 2024	$	181	$	1	$	182

Current restructuring reserve - other current liabilities					$	87
Noncurrent restructuring reserve - other noncurrent liabilities					95
Balance at September 30, 2024					$	182

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 automotive manufacturers, 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.

Impairment

During fiscal 2024, Adient recorded an impairment loss of $9 million on its investment in Adient Aerospace. The impairment is included in restructuring and impairment costs in the consolidated statement of income (loss).