Costs Associated with Rationalization Programs

9 Months Ended

Sep. 30, 2013

Restructuring and Related Activities [Abstract]

COSTS ASSOCIATED WITH RATIONALIZATION PROGRAMS

COSTS ASSOCIATED WITH RATIONALIZATION PROGRAMS

In order to maintain our global competitiveness, we have implemented rationalization actions over the past several years to reduce high-cost manufacturing capacity and associate headcount. The following table shows the roll forward of our liability between periods:

				Other Exit and
(In millions)	Associate-			Non-cancelable
	Related Costs			Lease Costs			Total
Balance at December 31, 2012	$	229		$	23		$	252
2013 Charges	32			20			52
Reversed to the Statements of Operations	(6		)	(5		)	(11		)
Incurred, Net of Foreign Currency Translation of $(2) million and $(2) million, respectively	(37		)	(23		)	(60		)
Balance at September 30, 2013	$	218		$	15		$	233

Rationalization actions initiated in 2013 consisted primarily of manufacturing headcount reductions in Europe, Middle East and Africa (“EMEA”) and Latin America and selling, administrative and general expense (“SAG”) headcount reductions in Asia Pacific and EMEA.

The accrual balance of $233 million at September 30, 2013 is expected to be substantially utilized within the next 12 months and includes $177 million relating to plans associated with the announced closure of one of our manufacturing facilities in Amiens, France.

The following table shows net rationalization charges included in Income before Income Taxes:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Current Year Plans
Associate Severance and Other Related Costs	$	11	$	21	$	16	$	29
Other Exit and Non-Cancelable Lease Costs	2		—		2		10
Current Year Plans - Net Charges	$	13	$	21	$	18	$	39
Prior Year Plans
Associate Severance and Other Related Costs	$	3	$	1	$	9	$	11
Other Exit and Non-Cancelable Lease Costs	5		4		14		17
Prior Year Plans - Net Charges	8		5		23		28
Total Net Charges	$	21	$	26	$	41	$	67
Asset Write-off and Accelerated Depreciation Charges	$	5	$	13	$	15	$	19

Substantially all of the new charges for the three and nine months ended September 30, 2013 and 2012 related to future cash outflows. Net charges for the three and nine months ended September 30, 2013 included reversals of $4 million and $11 million, respectively, and net charges for the nine months ended September 30, 2012 included reversals of $2 million for actions no longer needed for their originally intended purposes.

Approximately 400 associates will be released under plans initiated in 2013, of which approximately 200 associates have been released as of September 30, 2013. In total, approximately 1,600 associates remain to be released under rationalization plans, including approximately 1,200 associates related to the announced plan to exit the farm tire business and close one of our facilities in Amiens, France.

Accelerated depreciation charges for the three and nine months ended September 30, 2013 related primarily to property and equipment in one of our facilities in Amiens, France. Accelerated depreciation charges for the three and nine months ended September 30, 2012 were primarily related to property and equipment in our Dalian, China manufacturing facility. Accelerated depreciation charges for all periods were recorded in cost of goods sold (“CGS”).