Impairment and Restructuring Charges

12 Months Ended

Dec. 31, 2020

Note 14 - Impairment and Restructuring Charges

Impairment and restructuring charges by segment were as follows:

Year ended December 31, 2020:


	Mobile Industries		Process Industries		Unallocated Corporate		Total
Impairment charges	$	0.2	$	0.2	$	—	$	0.4
Severance expense and related benefit costs	8.2		11.0		0.4		19.6
Exit costs	0.6		0.6		—		1.2
Total	$	9.0	$	11.8	$	0.4	$	21.2

Year ended December 31, 2019:


	Mobile Industries		Process Industries		Unallocated Corporate		Total
Impairment charges	$	1.8	$	0.8	$	—	$	2.6
Severance expense and related benefit costs	1.6		0.9		0.5		3.0
Exit costs	0.2		1.0		—		1.2
Total	$	3.6	$	2.7	$	0.5	$	6.8

Year ended December 31, 2018:


	Mobile Industries		Process Industries		Unallocated Corporate		Total
Impairment charges	$	—	$	1.3	$	—	$	1.3
Severance expense and related benefit costs	1.1		0.3		1.6		3.0
Exit costs	0.3		0.3		—		0.6
Total	$	1.4	$	1.9	$	1.6	$	4.9

The following discussion explains the major impairment and restructuring charges recorded for the periods presented; however, it is not intended to reflect a comprehensive discussion of all amounts in the tables above.

COVID-19 Pandemic Cost Reduction Initiatives:

During 2020, the Company recorded $12.0 million in severance and related benefit costs to eliminate approximately 200 salaried positions to align current employment levels with customer demand. Of the $12.0 million charge, $5.8 million related to the Mobile Industries segment, $5.8 million related to the Process Industries segment and $0.4 million related to Unallocated Corporate.

Mobile Industries:

On October 16, 2019, the Company announced the reorganization of its bearing plant in Gaffney, South Carolina. The Company transferred its high-volume bearing production and roller production to other Timken manufacturing facilities in the U.S. The transfer of these operations was substantially completed by the end of the third quarter of 2020 and is expected to affect approximately 150 employees. The Company expected to incur approximately $8 million to $10 million of pretax costs in total related to this reorganization. During 2020 and 2019, the Company recognized severance and related benefits of $0.3 million and $1.3 million, respectively, and exit costs of $0.4 million and $0.1 million, respectively, related to this reorganization. The Company has incurred cumulative pretax costs related to this reorganization of $7.5 million as of December 31, 2020, including rationalization costs recorded in cost of products sold.

Note 14 - Impairment and Restructuring Charges (continued)

Process Industries:

On February 4, 2020, the Company announced the closure of its chain plant in Indianapolis, Indiana. This plant was part of the Diamond Chain acquisition completed on April 1, 2019. The Company will be transferring the manufacturing of its Diamond Chain product line to its chain facility in Fulton, Illinois. The chain plant is expected to close by the end of the fourth quarter of 2021 and is expected to affect approximately 240 employees. The Company expects to hire approximately 130 full-time positions in Fulton, Illinois and expects to incur approximately $10 million to $12 million of expenses related to this closure. During 2020, the Company recorded severance and related benefit costs of $3.1 million related to this closure. The Company has incurred cumulative pretax costs related to this closure of $6.0 million as of December 31, 2020, including rationalization costs recorded in cost of products sold.

On September 3, 2020, the Company announced the reorganization of its bearing plant in Canton, Ohio. The Company will be transferring production for certain product lines to other Timken locations in order to streamline resources and better align capacity with demand. The transfer of these operations is expected to occur by early 2021 and is expected to affect approximately 40 employees. The Company expects to incur approximately $2.0 million to $2.5 million of pretax costs related to this reorganization. During 2020, the Company recognized severance and related benefits of $1.1 million related to this reorganization. The Company has incurred cumulative pretax costs related to this reorganization of $1.2 million as of December 31, 2020, including rationalization costs recorded in cost of products sold.

Consolidated Restructuring Accrual:

The following is a rollforward of the consolidated restructuring accrual for the years ended December 31, 2020 and 2019:


	2020		2019
Beginning balance, January 1	$	2.7	$	2.7
Expense	20.8		4.2
Payments	(15.5)		(4.2)
Ending balance, December 31	$	8.0	$	2.7

The restructuring accrual at December 31, 2020 and 2019 is included in other current liabilities on the Consolidated Balance Sheets.