Restructuring

12 Months Ended

Dec. 31, 2024

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, where applicable) 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, 2024 and December 31, 2023, the remaining carrying value of the impaired assets was $0.

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.

For 2024, the Company’s only major restructuring program was the Fit to Win initiative, which is expected to reduce redundant production capacity and begin to optimize the network, as well as streamline other cost areas, such as selling, general and administrative expenses.  Details regarding charges, payments and other changes to the Fit to Win restructuring accruals are presented in the table below. This major restructuring program is expected to last at least through 2025 and management does not yet have an estimate for the total restructuring charges expected to be incurred with this program, however, the total charges are expected to be material. For 2023, no major restructuring programs were in effect.

For the year ended December 31, 2024, the Company recorded restructuring and other charges of approximately $208 million to Other income (expense), net ($206 million) and Equity earnings ($2 million) in the Consolidated Results of Operations, of which $201 million related to the Fit to Win program. These charges consisted of employee costs, such as severance and benefit-related costs, write-down of assets and other exit costs in the Americas segment ($79 million), Europe segment ($115 million) and Retained corporate costs and other ($14 million). As of December 31, 2024, the Company has incurred cumulative charges of $201 million related to the Fit to Win program. Additional restructuring charges are expected in future quarters when management completes their assessment to reduce redundant production capacity. The Company expects that the majority of the remaining cash expenditures related to the accrued employee and other exit costs will be paid out over the next several years.

For the year ended December 31, 2023, the Company implemented several discrete restructuring initiatives and recorded restructuring and other charges of $97 million to Other income (expense), net in the Consolidated Results of Operations.  These charges consisted of employee costs, such as severance and benefit-related costs, write-down of assets and other exit costs in the Americas segment ($89 million), Europe segment ($6 million) and Retained corporate costs and other ($2 million). 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. 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, 2023 through December 31, 2024:

	Fit to Win program						Other Restructuring
	Employee		Asset		Other		Employee		Asset		Other		Total
	Costs		Impairment		Exit Costs		Costs		Impairment		Exit Costs		Restructuring
Balance at January 1, 2023	$	—	$	—	$	—	$	17	$	—	$	10	$	27
Charges								32		55		10		97
Write-down of assets to net realizable value										(55)				(55)
Net cash paid, principally severance and related benefits								(20)				(6)		(26)
Other, including foreign exchange translation								(2)				(2)		(4)
Balance at December 31, 2023	$	—	$	—	$	—	$	27	$	—	$	12	$	39
Charges		73		109		19		1		4		2		208
Write-down of assets to net realizable value				(109)						(4)				(113)
Net cash paid, principally severance and related benefits		(14)				(1)		(19)				(7)		(41)
Other, including foreign exchange translation		(8)						(2)				(3)		(13)
Balance at December 31, 2024	$	51	$	—	$	18	$	7	$	—	$	4	$	80