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Business Restructuring
 6 Months Ended
Jun. 30, 2013
Restructuring and Related Activities [Abstract]  
Business Restructuring
Business Restructuring
On July 17, 2013, the Board of Directors of the Company approved a business restructuring plan that will result in a pre-tax charge of $102 million in the third quarter results of operations. The approved actions are focused on achieving cost synergies related to the recent North American architectural coatings acquisition, including actions in the acquired business as well as in PPG's legacy architectural business. Additionally, smaller targeted actions were approved for businesses where market conditions remain very challenging, most notably protective and marine coatings and certain European businesses such as architectural coatings and fiber glass. The restructuring actions will impact about 1,200 employees.
The charge of $102 million is comprised of employee severance and other cash costs of approximately $97 million and asset write-offs and other non-cash items of approximately $5 million. Of the approximate $97 million of cash costs, about 55 percent is expected to be spent in 2013, with the remainder spent in 2014. The actions in the restructuring plan are expected to be completed by the end of 2014.
The Company will also incur additional expenses of approximately $5 million that are directly associated with the restructuring actions but, based on accounting guidance related to restructuring costs, these costs will be charged to expense as incurred and therefore are not part of the restructuring charge. The Company expects to incur these additional, related expenses by the end of 2014.
In March 2012, the Company finalized a restructuring plan to reduce its cost structure, primarily due to continuing weak economic conditions in Europe and in the commercial and residential construction markets in the U.S. and Europe. As part of this restructuring plan, PPG closed several laboratory, warehouse and distribution facilities and small production units and reduced staffing. The restructuring impacted a number of businesses globally, primarily the global architectural businesses and general and administrative functions in Europe.
As a result of this restructuring plan, in March 2012 the Company recorded a charge of $208 million for business restructuring, including severance and other costs of $160 million, asset write-offs of $53 million, and a net pension curtailment gain of $5 million. The Company also recognized additional costs directly associated with the restructuring actions for demolition, dismantling, relocation and training that were charged to expense as incurred, totaling $5 million, most of which was incurred by December 31, 2012.
In the fourth quarter of 2012, adjustments of approximately $12 million were recorded to reduce the restructuring reserve established in the first quarter of 2012 to reflect the estimated cost to complete these actions. Also in the fourth quarter of 2012, some additional restructuring actions were approved and charges of approximately $12 million for the estimated cost of these actions were recorded. The additional actions increased the number of employees impacted by 273.
The following table summarizes the restructuring plan and the activity in the restructuring reserve during the six months ended June 30, 2013:
(Millions, except no. of employees)
Severance
and Other
Costs
 
Pension
Curtailment
(Gains)/Losses
 
Asset
Write-offs
 
Total
Reserve
 
Employees
Impacted
Performance Coatings
$
55

 
$
1

 
$
12

 
$
68

 
867

Industrial Coatings
38

 
(1
)
 
8

 
45

 
394

Architectural Coatings - EMEA
61

 
(5
)
 
3

 
59

 
881

Optical & Specialty Materials
2

 
—

 
30

 
32

 
50

Glass
3

 
—

 
—

 
3

 
36

Corporate
1

 
—

 
—

 
1

 
4

Total
$
160

 
$
(5
)
 
$
53

 
$
208

 
2,232

Activity to date
(120
)
 
5

 
(53
)
 
(168
)
 
(2,137
)
Currency Impact
(4
)
 
—

 
—

 
(4
)
 
—

Balance as of June 30, 2013
$
36

 
$
—

 
$
—

 
$
36

 
95


In addition to the amounts related to the 2012 restructuring reserve, there were also cash payments of approximately $3 million related to prior restructuring programs made during the six months ended June 30, 2012.