Restructuring Programs

9 Months Ended

Oct. 02, 2021

Restructuring and Related Activities [Abstract]

Restructuring and Cost Reduction Activities

Restructuring programs

The Company views its restructuring programs as part of its operating principles to provide greater visibility in achieving its long-term profit growth targets. Initiatives undertaken are currently expected to recover cash implementation costs within a 3 to 5-year period subsequent to completion. Completion (or as each major stage is completed in the case of multi-year programs), is when the project begins to deliver cash savings and/or reduced depreciation.

During the third quarter of 2021, the Company announced a reconfiguration of the North America reportable segment supply chain network, designed to drive increased productivity. The project is expected to be substantially completed by early 2024, with related productivity improvements commencing in 2023. The overall project is expected to result in cumulative pretax charges of approximately $45 million, which include employee-related costs of $4 million, other cash costs of $21 million and non-cash costs, primarily consisting of accelerated depreciation and asset write-off's, of $20 million. Charges incurred related to this restructuring program were $4 million during the quarter and year-to-date periods ended October 2, 2021. These charges primarily related to severance costs, and were recorded in COGS expense.

All other restructuring projects were immaterial during the periods presented.