Restructuring

3 Months Ended

Mar. 31, 2020

Restructuring and Related Activities [Abstract]

Restructuring

RESTRUCTURING

The Company’s restructuring activities are undertaken as necessary to implement management’s strategy, streamline operations, take advantage of available capacity and resources, and ultimately achieve net cost reductions. These activities generally relate to the realignment of existing manufacturing capacity and closure of facilities and other exit or disposal activities, as it relates to executing Delphi Technologies’ strategy, either in the normal course of business or pursuant to significant restructuring programs.

On October 31, 2019, the Company announced a restructuring plan to reshape and realign the Company’s global technical center footprint and reduce salaried and contract staff, with expected charges of up to $200 million. Certain of these actions are subject to consultation with employee works councils and other employee representatives and are expected to be substantially completed by the end of 2021. The Company recorded pre-tax restructuring charges of $41 million during the three months ended March 31, 2020 related to this plan (approximately $100 million of charges recorded to date). The Company expects to record additional pre-tax restructuring charges of approximately $50 million up to $100 million, across the organization. Nearly all of the restructuring charges will be cash expenditures.

In addition, as part of the Company’s continued efforts to optimize its cost structure, it has undertaken several restructuring programs which include workforce reductions as well as plant closures. These programs are primarily focused on the continued rotation of our manufacturing footprint to best-cost locations in Europe and on reducing global overhead costs. The Company recorded employee-related and other restructuring charges related to these programs totaling approximately $3 million during the three months ended March 31, 2019.

Restructuring charges for employee separation and termination benefits are paid either over the severance period or in a lump sum in accordance with either statutory requirements or individual agreements. Delphi Technologies incurred cash expenditures related to its restructuring programs of approximately $33 million and $9 million in the three months ended March 31, 2020 and 2019, respectively.

The following table summarizes the restructuring charges recorded for the three months ended March 31, 2020 and 2019 by operating segment:

	Three Months Ended March 31,
	2020		2019
	(in millions)
Fuel Injection Systems	$	32	$	3
Powertrain Products	8		—
Electrification & Electronics	1		—
Aftermarket	—		—
Corporate	2		—
Total	$	43	$	3

The table below summarizes the activity in the restructuring liability for the three months ended March 31, 2020:

	Employee Termination Benefits Liability			Other Exit Costs Liability		Total
	(in millions)
Accrual balance at December 31, 2019	$	95		$	1	$	96
Provision for estimated expenses during the period	43			—		43
Payments made during the period	(33		)	—		(33		)
Foreign currency and other	(2		)	—		(2		)
Accrual balance at March 31, 2020	$	103		$	1	$	104