Restructuring Expenses

3 Months Ended

Mar. 29, 2020

Restructuring and Related Activities [Abstract]

Restructuring Expenses

Restructuring Expenses

In 2018, the Company initiated a plan to further improve its manufacturing operations and cost structure by commencing a multi-year manufacturing optimization plan which included the consolidation of its motorcycle assembly plant in Kansas City, Missouri, into its plant in York, Pennsylvania, and the closure of its wheel operations in Adelaide, Australia (Manufacturing Optimization Plan). The consolidation of operations included the elimination of approximately 800 jobs at the Kansas City facility and the addition of approximately 450 jobs at the York facility through 2019. The Adelaide facility closure included the elimination of approximately 90 jobs. Through December 31, 2019, the Motorcycles segment incurred cumulative restructuring expenses of $122.2 million and other costs related to temporary inefficiencies of $23.2 million under the Manufacturing Optimization Plan. The plant consolidation and closures were completed in 2019. No expenses were recorded under the Manufacturing Optimization Plan in the three months ended March 29, 2020, and no additional expenses are expected under the plan.

In 2018, the Company initiated a reorganization of its workforce (Reorganization Plan), which was completed in 2019. As a result, approximately 70 employees left the Company on an involuntary basis.

Restructuring expense related to the restructuring plans is presented as a line item in the Consolidated statements of income and the accrued restructuring liability is recorded in Accrued liabilities on the Consolidated balance sheets. Changes in the accrued restructuring liability were as follows (in thousands):

	Three months ended March 29, 2020
	Manufacturing Optimization Plan								Reorganization Plan
	Employee Termination Benefits		Accelerated Depreciation		Other		Total		Employee Termination Benefits		Total
Balance, beginning of period	$	865	$	—	$	2	$	867	$	—	$	867
Utilized – cash	(445)		—		(2)		(447)		—		(447)
Balance, end of period	$	420	$	—	$	—	$	420	$	—	$	420

	Three months ended March 31, 2019
	Manufacturing Optimization Plan								Reorganization Plan
	Employee Termination Benefits		Accelerated Depreciation		Other		Total		Employee Termination Benefits		Total
Balance, beginning of period	$	24,958	$	—	$	79	$	25,037	$	3,461	$	28,498
Restructuring expense (benefit)	9		8,379		5,636		14,024		(394)		13,630
Utilized – cash	(2,600)		—		(5,528)		(8,128)		(2,014)		(10,142)
Utilized – non cash	—		(8,379)		—		(8,379)		—		(8,379)
Foreign currency changes	34		—		—		34		(2)		32
Balance, end of period	$	22,401	$	—	$	187	$	22,588	$	1,051	$	23,639

The Company incurred incremental Motorcycles and Related Products cost of goods sold due to temporary inefficiencies resulting from implementing the Manufacturing Optimization Plan during the three months ended March 31, 2019 of $3.6 million.