In order to maintain our global competitiveness, we have implemented rationalization actions over the past several years to reduce high-cost and excess manufacturing capacity and operating and administrative costs, and, more recently, related to the integration of Cooper Tire.

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


	Associate-
(In millions)	Related Costs			Other Costs			Total
Balance at December 31, 2022	$	115		$	2		$	117
2023 Charges		82			28			110
Incurred, net of foreign currency translation of $3 million and $0 million, respectively		(32	)		(15	)		(47	)
Reversed to the Statement of Operations		(6	)		—			(6	)
Balance at June 30, 2023	$	159		$	15		$	174

During the second quarter of 2023, we approved a plan to permanently reduce production capacity at our Fulda, Germany tire manufacturing facility (“Fulda”) by approximately 50% aligned with our goal to reduce our production cost per tire in Europe, Middle East and Africa (“EMEA”). The proposed plan includes approximately 550 job reductions at Fulda, consisting of 375 associates and 175 contracted positions. The plan remains subject to consultation with relevant employee representative bodies. We expect to substantially complete this rationalization plan by the end of 2024 and estimate total pre-tax charges associated with this action to be between $105 million and $115 million, of which $95 million to $105 million are expected to be cash charges primarily for associate-related and other exit costs, with the remainder representing non-cash charges primarily for accelerated depreciation and other asset-related charges. We accrued $62 million for this plan at June 30, 2023, primarily consisting of cash charges for associate-related exit costs. We expect to record approximately $10 million of pre-tax charges in the second half of 2023 and the majority of the remaining charges in 2024. The majority of the cash outflows associated with this plan are expected to occur in 2024.

During the second quarter of 2023, we also approved a plan to reduce costs associated with our global operations and technology organization, which includes approximately 20 net headcount reductions and is expected to be substantially completed by the end of the first quarter of 2024. Total pre-tax charges are expected to be approximately $6 million, primarily consisting of cash charges for associate-related exit costs, which was accrued at June 30, 2023. Relevant portions of the rationalization plan remain subject to consultation with employee representative bodies.

During the first quarter of 2023, we approved a plan designed to streamline our EMEA distribution network that will result in the eventual closure of our Philippsburg, Germany distribution center. The rationalization plan will lower our operating costs while maintaining or improving the existing service levels to our customers. Relevant portions of the rationalization plan remain subject to consultation with employee representative bodies. We have $17 million accrued for this plan at June 30, 2023, which is expected to be substantially paid during the first half of 2024.

During the first quarter of 2023, we also approved a plan in EMEA to reduce staffing levels and capacity at several manufacturing facilities commensurate with the decline in demand. We have $3 million accrued for this plan at June 30, 2023, which is expected to be substantially paid by the end of 2023.

The remainder of the accrual balance at June 30, 2023 is expected to be substantially utilized in the next 12 months and includes $37 million related to plans to reduce Selling, Administrative and General Expense ("SAG") headcount, $35 million related to the closure of Cooper Tire's Melksham, United Kingdom manufacturing facility ("Melksham"), $5 million related to the closed Amiens, France tire manufacturing facility, $3 million related to the integration of Cooper Tire, and various other plans to reduce headcount and improve operating efficiency.

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


	Three Months Ended					Six Months Ended
	June 30,					June 30,
(In millions)	2023			2022		2023		2022
Current Year Plans
Associate Severance and Other Related Costs	$	68		$	22	$	75	$	22
Other Exit Costs		—			—		13		—
Current Year Plans - Net Charges	$	68		$	22	$	88	$	22

Prior Year Plans
Associate Severance and Other Related Costs	$	(2	)	$	—	$	2	$	4
Other Exit Costs		6			4		14		11
Prior Year Plans - Net Charges	$	4		$	4	$	16	$	15
Total Net Charges	$	72		$	26	$	104	$	37
Asset Write-offs (Recoveries) and Accelerated Depreciation, net	$	11		$	—	$	13	$	—

Substantially all of the new charges for the three and six months ended June 30, 2023 and 2022 relate to future cash outflows. Net current year plan charges for the three months ended June 30, 2023 relate to the plan to reduce production capacity at Fulda and the plan to reduce costs associated with our global operations and technology organization. Net current year plan charges for the six months ended June 30, 2023 also include the plan to streamline our EMEA distribution network and the plan to reduce manufacturing staffing levels and capacity in EMEA. Net current year plan charges for the three and six months ended June 30, 2022 are primarily due to the integration of Cooper Tire.

Net prior year plan charges for the three months ended June 30, 2023 include $4 million related to the closure of Melksham, $2 million related to the integration of Cooper Tire, $2 million related to a plan in South Africa, and reversals of $4 million for actions no longer needed for their originally intended purpose. Net prior year plan charges for the six months ended June 30, 2023 include $6 million related to the closure of Melksham, $4 million for various plans to reduce global SAG headcount, $4 million related to the integration of Cooper Tire, $3 million related to the permanent closure of our Gadsden, Alabama tire manufacturing facility ("Gadsden"), $2 million related to discontinued operations in Russia, and reversals of $6 million for actions no longer needed for their originally intended purpose. Net prior year plan charges for the three and six months ended June 30, 2022 included $4 million and $11 million, respectively, related to the permanent closure of Gadsden, $1 million and $6 million, respectively, related to the modernization of two of our tire manufacturing facilities in Germany, and reversals of $1 million and $2 million, respectively, for actions no longer needed for their originally intended purpose.

Asset write-offs (recoveries) and accelerated depreciation for the three months ended June 30, 2023 primarily relate to $7 million for the integration of Cooper Tire and $4 million for the closure of Melksham. Asset write-offs (recoveries) and accelerated depreciation for the six months ended June 30, 2023 primarily relate to $15 million for the integration of Cooper Tire and $8 million for the closure of Melksham, partially offset by $10 million of recoveries of previously written-off accounts receivable and other assets in Russia.

Ongoing rationalization plans had approximately $960 million in charges incurred prior to 2023 and approximately $60 million is expected to be incurred in future periods.

Approximately 700 associates will be released under plans initiated in 2023, of which approximately 50 were released through June 30, 2023. In the first six months of 2023, approximately 500 associates were released under plans initiated in prior years. Approximately 1,150 associates remain to be released under all ongoing rationalization plans.