Costs Associated with Rationalization Programs

In order to maintain our global competitiveness, we have implemented rationalization actions over the past several years to reduce excess and high-cost manufacturing capacity and to reduce associate costs.

The following table presents the roll-forward of the liability balance between periods:



(In millions)	Associate-related Costs			Other Costs			Total
Balance at December 31, 2015	$	96		$	7		$	103
2016 charges ⁽¹⁾	202			16			218
Incurred, Net of Foreign Currency Translation of $(13) million and $0 million, respectively ⁽²⁾	(75		)	(18		)	(93		)
Reversed to the Statement of Operations	(9		)	—			(9		)
Balance at December 31, 2016	$	214		$	5		$	219
2017 charges ⁽¹⁾	103			32			135
Incurred, Net of Foreign Currency Translation of $25 million and $1 million, respectively	(94		)	(34		)	(128		)
Reversed to the Statement of Operations	(13		)	—			(13		)
Balance at December 31, 2017	$	210		$	3		$	213
2018 charges ⁽¹⁾	47			17			64
Incurred, Net of Foreign Currency Translation of $(3) million and $0 million, respectively	(158		)	(19		)	(177		)
Reversed to the Statement of Operations	(19		)	—			(19		)
Balance at December 31, 2018	$	80		$	1		$	81


(1)	Charges of $64 million, $135 million and $218 million in 2018, 2017 and 2016, respectively, exclude $(1) million, $13 million and $1 million of benefit plan curtailments and settlements recorded in Rationalizations in the Statement of Operations.


(2)	Incurred in 2016 of $93 million excludes $6 million of rationalization payments, primarily for labor claims relating to a previously closed facility in Greece.

The accrual balance of $81 million at December 31, 2018 is expected to be substantially utilized in the next 12 months and includes $46 million related to plans to reduce manufacturing headcount and improve operating efficiency in Europe, Middle East and Africa ("EMEA") and $29 million related to global plans to reduce SAG headcount.

The net rationalization charges included in Income before Income Taxes are as follows:



(In millions)	2018			2017		2016
Current Year Plans
Associate Severance and Other Related Costs	$	40		$	81	$	188
Other Exit and Non-Cancelable Lease Costs	—			2		1
Current Year Plans - Net Charges	$	40		$	83	$	189

Prior Year Plans
Associate Severance and Other Related Costs	$	(11	)	$	9	$	5
Benefit Plan Curtailments and Settlements	(1		)	13		1
Other Exit and Non-Cancelable Lease Costs	16			30		15
Prior Year Plans - Net Charges	4			52		21
Total Net Charges	$	44		$	135	$	210
Asset Write-off and Accelerated Depreciation Charges	$	4		$	40	$	20

Substantially all of the new charges in 2018 related to future cash outflows. Net current year plan charges at December 31, 2018 include charges of $28 million related to a global plan to reduce SAG headcount and $13 million related to plans to reduce manufacturing headcount and improve operating efficiency in EMEA. Net current year plan charges at December 31, 2018 include reversals of $1 million for actions no longer needed for their originally intended purposes.

Net prior year plan charges recognized in the year ended December 31, 2018 include charges of $15 million related to the closure of our tire manufacturing facility in Philippsburg, Germany, $3 million related to a plan to reduce manufacturing headcount in EMEA, and $3 million related to a global plan to reduce SAG headcount. Net prior year plan charges for the year ended December 31, 2018 include reversals of $18 million for actions no longer needed for their originally intended purposes.

Ongoing rationalization plans had approximately $720 million in charges through 2018 and approximately $12 million is expected to be incurred in future periods.

Approximately 500 associates will be released under new plans initiated in 2018, of which approximately 150 were released through December 31, 2018. In 2018, approximately 500 associates were released under plans initiated in prior years. Approximately 550 associates remain to be released under all ongoing rationalization plans.

At December 31, 2018, approximately 850 former associates of the closed Amiens, France manufacturing facility have asserted wrongful termination or other claims against us. Refer to Note 19.

Asset write-off and accelerated depreciation charges in 2018 primarily related to the closure of our tire manufacturing facility in Philippsburg, Germany. Asset write-off and accelerated depreciation for all periods were recorded in CGS.

Rationalization activities initiated in 2017 consisted primarily of net charges of $30 million related to reductions in manufacturing headcount in EMEA, $25 million related to a global plan to reduce SAG headcount, $20 million related to SAG headcount reductions in EMEA, and $8 million related to a plan to improve operating efficiency in EMEA. Net prior year plan charges recognized in the year ended December 31, 2017 include charges of $35 million related to the closure of our tire manufacturing facility in Philippsburg, Germany, $8 million related to manufacturing headcount reductions in EMEA, and $7 million related to a global plan to reduce SAG headcount.

Asset write-off and accelerated depreciation charges in 2017 primarily related to the closure of our tire manufacturing facility in Philippsburg, Germany.

Rationalization activities initiated in 2016 consisted primarily of net charges of $116 million related to the plan to close our tire manufacturing facility in Philippsburg, Germany, $34 million related to a global plan to reduce SAG headcount, and $25 million

related to manufacturing headcount reductions in EMEA. Net prior year plan charges recognized in the year ended December 31,

2016 include charges of $12 million related to the closure of one of our manufacturing facilities in Amiens, France.

Accelerated depreciation charges in 2016 primarily related to the closure of our Wolverhampton, U.K. mixing and retreading facility and the plan to close our tire manufacturing facility in Philippsburg, Germany.