Restructuring

12 Months Ended

Dec. 31, 2022

Restructuring

Restructuring

10. Restructuring

The Company continually reviews its manufacturing footprint and operating cost structure and may decide to close operations or reduce headcount to gain efficiencies, integrate acquired operations, reduce future expenses and address other market factors. The Company incurs costs associated with these actions including employee severance and benefits, other exit costs such as those related to contract terminations, and asset impairment charges. The Company also may incur other costs related to closed facilities including clean-up, dismantling and preparation for sale or other disposition.

The Company accounts for restructuring and other costs under applicable provisions of generally accepted accounting principles. Charges for employee severance and related benefits are generally accrued based on contractual arrangements with employees or their representatives. Other exit costs are accrued based on the estimated cost to settle related contractual arrangements. Estimated environmental remediation costs are accrued when specific claims have been received or are probable of being received.

The Company’s decisions to curtail selected production capacity have resulted in write-downs of certain long-lived assets to the extent their carrying amounts exceeded fair value or fair value less cost to sell. The Company classified the significant assumptions used to determine the fair value of the impaired assets in the period that the measurement was taken as Level 3 (third-party appraisal) in the fair value hierarchy as set forth in the general accounting principles for fair value measurements. For the asset impairments recorded through December 31, 2022 and December 31, 2021, the remaining carrying value of the impaired assets was approximately $6 million and $5 million, respectively.

When a decision is made to take restructuring actions, the Company manages and accounts for them programmatically apart from the ongoing operations of the business. Information related to major programs is presented separately while minor initiatives are presented on a combined basis. As of December 31, 2022 and 2021, no major restructuring programs were in effect.

In 2022, the Company implemented several discrete restructuring initiatives and recorded restructuring and other charges of $50 million.  These charges consisted of employee costs, such as severance and benefit-related costs, write-down of assets and other exit costs (including related consulting costs attributed to restructuring of managed services activities) at a number of the Company’s facilities primarily in the Americas. These restructuring charges were discrete actions and are expected to approximate the total cumulative costs for those actions as no significant additional costs are expected to be incurred. These charges were recorded to Other income (expense), net on the Consolidated Results of Operations. The Company expects that the majority of the remaining cash expenditures related to the accrued employee costs will be paid out over the next several years.

In 2021, the Company implemented several discrete restructuring initiatives and recorded restructuring and other charges of $28 million.  These charges consisted of employee costs, such as severance and benefit-related costs, write-down of assets and other exit costs (including related consulting costs attributed to restructuring of managed services activities) at a number of the Company’s facilities in the Americas and Europe. These restructuring charges were discrete actions and are expected to approximate the total cumulative costs for those actions as no significant additional costs are expected to be incurred. These charges were recorded to Other income (expense), net on the Consolidated Results of Operations. The Company expects that the majority of the remaining cash expenditures related to the accrued employee costs will be paid out over the next several years.

The following table presents information related to restructuring, asset impairment and other costs related to closed facilities from January 1, 2021 through December 31, 2022:

	Employee		Asset		Other		Total
	Costs		Impairment		Exit Costs		Restructuring
Balance at January 1, 2021	$	38	$	—	$	7	$	45
Charges		3		6		19		28
Write-down of assets to net realizable value				(6)				(6)
Net cash paid, principally severance and related benefits		(15)				(15)		(30)
Other, including foreign exchange translation		(6)						(6)
Balance at December 31, 2021	$	20	$	—	$	11	$	31
Charges		8		30		12		50
Write-down of assets to net realizable value				(30)				(30)
Net cash paid, principally severance and related benefits		(11)				(9)		(20)
Other, including foreign exchange translation						(4)		(4)
Balance at December 31, 2022	$	17	$	—	$	10	$	27