Note 4. Restructuring and Integration Costs

The aggregated liabilities included in “sundry payables and accrued expenses” and “other accrued liabilities” in the consolidated balance sheet relating to the restructuring and integration activities as of December 31, 2010 and September 30, 2011 and activity for the nine months ended September 30, 2011 consisted of the following (in thousands):

	Workforce Reduction			Other Exit Costs			Total
Exit activity liability at December 31, 2010	$	6,220		$	2,435		$	8,655
Restructuring and integration costs:
Amounts provided for during 2011		239			504			743
Non-cash usage, including asset write-downs		--			(343	)		(343	)
Cash payments		(4,402	)		(574	)		(4,976	)
Exit activity liability at September 30, 2011	$	2,057		$	2,022		$	4,079

Restructuring Costs

Voluntary Separation Program

During 2008 as part of an initiative to improve the effectiveness and efficiency of operations, and to reduce costs in light of economic conditions, we implemented certain organizational changes and offered eligible employees a voluntary separation package. The restructuring accrual relates to severance and other retiree benefit enhancements to be paid through 2015. Of the original restructuring charge of $8 million, we have $1.7 million remaining as of September 30, 2011 that is expected to be paid in the amounts of $0.4 million in 2011, $0.5 million in 2012 and $0.8 million for the period 2013-2015.

Activity, by segment, for the nine months ended September 30, 2011 related to the voluntary separation program, consisted of the following (in thousands):

	Engine Management			Temperature Control			Other			Total
Exit activity liability at December 31, 2010	$	970		$	321		$	915		$	2,206
Restructuring costs:
Amounts provided for during 2011		--			--			--			--
Cash payments		(167	)		(54	)		(311	)		(532	)
Exit activity liability at September 30, 2011	$	803		$	267		$	604		$	1,674

Integration Expenses

Overhead Cost Reduction Program

Beginning in 2007 in connection with our efforts to improve our operating efficiency and reduce costs, we announced our intention to focus on company-wide overhead and operating expense cost reduction activities, such as closing excess facilities and reducing redundancies. Integration expenses remaining under this program to date relate primarily to the closure of our production operations in Corona, California and Edwardsville, Kansas. We expect that all payments related to the current liability will be made within twelve months.

Activity for the nine months ended September 30, 2011 related to our overhead cost reduction program, consisted of the following (in thousands):

	Workforce Reduction			Other Exit Costs			Total
Exit activity liability at December 31, 2010	$	853		$	686		$	1,539
Integration costs:
Amounts provided for during 2011		194			309			503
Non-cash usage, including asset write-downs		--			(343	)		(343	)
Cash payments		(804	)		(284	)		(1,088	)
Exit activity liability at September 30, 2011	$	243		$	368		$	611

Reynosa Integration Program

During 2008, we closed our Long Island City, New York and Puerto Rico manufacturing facilities and integrated these operations in Reynosa, Mexico. In connection with the shutdown of the manufacturing operations at Long Island City, we incurred severance costs and costs associated with equipment removal, capital expenditures and environmental clean-up. As of September 30, 2011, the reserve balance related to environmental clean-up at Long Island City of $1.7 million is included in other exit costs.

In connection with the shutdown of the manufacturing operations at Long Island City, we entered into an agreement with the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America and its Local 365 (“UAW”). As part of the agreement, we incurred a withdrawal liability from a multi-employer plan. The pension plan withdrawal liability is related to trust asset under-performance in a plan that covers our former UAW employees at the Long Island City facility and was payable quarterly for 20 years at $0.3 million per year, which commenced in December 2008. In June 2011, we agreed to settle our pension withdrawal liability for $2.8 million and recorded a gain of $0.3 million in connection with the settlement.

Activity for the nine months ended September 30, 2011 related to the Reynosa integration program, consisted of the following (in thousands):

	Workforce Reduction			Other Exit Costs			Total
Exit activity liability at December 31, 2010	$	3,161		$	1,749		$	4,910
Integration costs:
Amounts provided for during 2011		(225	)		70			(155	)
Cash payments		(2,877	)		(165	)		(3,042	)
Exit activity liability at September 30, 2011	$	59		$	1,654		$	1,713

Engine Controls Relocation

During April 2011, we acquired the Engine Controls business of BLD Products, Ltd., a subsidiary of Qualitor Inc. As a result of our acquisition, we will incur integration costs within our Engine Management Segment related to employee severance and the relocation of certain machinery and equipment to our Reynosa, Mexico manufacturing facility. We expect that all related payments will be made within twelve months.

Activity for the nine months ended September 30, 2011 related to the engine controls relocation program, consisted of the following (in thousands):

	Workforce Reduction			Other Exit Costs			Total
Exit activity liability at December 31, 2010	$	-		$	-		$	-
Integration costs:
Amounts provided for during 2011		270			125			395
Cash payments		(189	)		(125	)		(314	)
Exit activity liability at September 30, 2011	$	81		$	--		$	81

Integration activity, by segment, for the nine months ended September 30, 2011 related to our aggregate integration programs consisted of the following (in thousands):

	Engine Management			Temperature Control			Total
Exit activity liability at December 31, 2010	$	5,580		$	869		$	6,449
Integration costs:
Amounts provided for during 2011		626			117			743
Non-cash usage, including asset write-downs		(343	)		--			(343	)
Cash payments		(3,611	)		(833	)		(4,444	)
Exit activity liability at September 30, 2011	$	2,252		$	153		$	2,405

Assets Held for Sale

As of September 30, 2011, we have reported $0.2 million as assets held for sale on our consolidated balance sheet related to the net book value of vacant land located in the U.K. Following plant closures resulting from integration activities, this facility had been vacant, and in July 2011, we signed an agreement to sell the property pending the procurement of satisfactory planning permission. We expect there will be a gain on the sale of the property and will record the resulting gain in other income (expense), net included in operating income (loss) in the consolidated statement of operations, upon completion of such sale.