Costs Associated with Rationalization Programs

3 Months Ended

Mar. 31, 2014

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, 2013	$	232		$	5		$	237
2014 Charges (1)	56			8			64
Reversed to the Statements of Operations	(3		)	—			(3		)
Incurred, Net of Foreign Currency Translation of $1 million and $0 million, respectively	(41		)	(8		)	(49		)
Balance at March 31, 2014	$	244		$	5		$	249

________________________________

(1) Charges in the first quarter of 2014 of $64 million exclude $20 million of pension curtailment gains recorded in Rationalizations in the Statement of Operations.

Significant rationalization actions initiated in the first quarter of 2014 consisted of manufacturing headcount reductions related to EMEA's plans to improve operating efficiency. In addition, EMEA and Asia Pacific also initiated plans to reduce selling, administrative and general ("SAG") headcount.

The accrual balance of $249 million at March 31, 2014 is expected to be substantially utilized within the next 12 months and includes $183 million related to the plan to exit the farm tire business and close one of our manufacturing facilities in Amiens, France.

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

	Three Months Ended
	March 31,
	2014			2013
Current Year Plans
Associate Severance and Other Related Costs	$	4		$	—
Other Exit and Non-Cancelable Lease Costs	1			—
Current Year Plans - Net Charges	$	5		$	—
Prior Year Plans
Associate Severance and Other Related Costs	$	49		$	—
Pension Curtailment Gain	(20		)	—
Other Exit and Non-Cancelable Lease Costs	7			7
Prior Year Plans - Net Charges	36			7
Total Net Charges	$	41		$	7
Asset Write-off and Accelerated Depreciation Charges	$	1		$	5

Substantially all of the new charges for the three months ended March 31, 2014 and 2013 related to future cash outflows. Net prior year plan charges of $36 million in the first quarter of 2014 include charges of $50 million for associate severance and idle plant costs, partially offset by a pension curtailment gain of $20 million, related to the closure of one of our manufacturing facilities in Amiens, France. Net charges for the three months ended March 31, 2014 and 2013 both included reversals of $3 million for actions no longer needed for their originally intended purposes.

Approximately 200 associates will be released under plans initiated in 2014, of which approximately 100 associates have been released as of March 31, 2014. In the first quarter of 2014, approximately 1,100 associates were released under plans initiated in prior years, primarily related to the plan to exit the farm tire business and close one of our manufacturing facilities in Amiens, France. In total, approximately 600 associates remain to be released under rationalization plans.

Accelerated depreciation charges for the three months ended March 31, 2013 related primarily to property and equipment in one of our manufacturing facilities in Amiens, France. Accelerated depreciation charges for all periods were recorded in cost of goods sold (“CGS”).