Harley Davidson 2012 Annual Report Download - page 69

69
2011
Kansas City New Castalloy Consolidated
Employee
Severance
and
Termination
Costs Other Total
Employee
Severance
and
Termination
Costs Accelerated Depreciation Other Total Total
Restructuring expense $ 8,447 $ 342 $8,789 $ 8,428 $ 656 $ 305 $9,389 $ 18,178
Utilized - cash (4,088) (342) (4,430) — — — — (4,430)
Utilized - noncash (236) — (236) — (656) — (656)(892)
Balance, end of period $ 4,123 $ — $4,123 $ 8,428 $ — $ 305 $8,733 $ 12,856
2010 Restructuring Plan
In September 2010, the Company’s unionized employees in Wisconsin ratified three separate new seven-year labor
agreements which took effect in April 2012 when the prior contracts expired. The new contracts are similar to the labor
agreement ratified at the Company’s York, Pennsylvania facility in December 2009 and allow for similar flexibility and
increased production efficiency and the addition of a flexible workforce component.
The actions to implement the new ratified labor agreements (2010 Restructuring Plan) result in approximately 250 fewer
full-time hourly unionized employees in its Milwaukee-area facilities than would be required under the previous contract and
approximately 75 fewer full-time hourly unionized employees in its Tomahawk facility than would have been required under
the previous contract.
Under the 2010 Restructuring Plan, restructuring expenses consist of employee severance and termination costs and other
related costs. On a cumulative basis, the Company has incurred $59.7 million of restructuring and impairment expenses under
the 2010 Restructuring Plan as of December 31, 2012, of which approximately 45% are non-cash. During the year ended
December 31, 2012, the Company released a portion of its 2010 Restructuring Plan reserve related to severance costs as these
costs are no longer expected to be incurred.
The following table summarizes the Motorcycle Segment’s 2010 Restructuring Plan reserve activity and balances as
recorded in accrued liabilities for the following years ended December 31 (in thousands):
2012 2011 2010
Employee
Severance and
Termination Costs
Employee
Severance and
Termination Costs
Employee
Severance and
Termination Costs
Balance, beginning of period $ 20,361 $ 8,652 $ —
Restructuring expense 4,005 12,575 44,383
Utilized – cash (12,898)(866)(7,557)
Utilized – noncash — — (28,174)
Non-cash reserve release (1,312) — —
Balance, end of period $ 10,156 $ 20,361 $ 8,652
For the year ended December 31, 2010, restructuring expense included $28.2 million of noncash curtailment losses
related to the Company’s pension and postretirement healthcare plans that cover employees of the affected facilities in
Milwaukee and Tomahawk, Wisconsin.
2009 Restructuring Plan
During 2009, in response to the U.S. economic recession and worldwide slowdown in consumer demand, the Company
committed to a volume reduction and a combination of restructuring actions that were expected to be completed at various
dates between 2009 and 2012. The actions were designed to reduce administrative costs, eliminate excess capacity and exit
non-core business operations. The Company’s announced actions included the restructuring and transformation of its York,
Pennsylvania production facility including the implementation of a new more flexible unionized labor agreement which allows
for the addition of a flexible workforce component; consolidation of facilities related to engine and transmission production;
outsourcing of certain distribution and transportation activities and exiting the Buell product line. In addition, the Company