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FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 20. EMPLOYEE SEPARATION ACTIONS AND EXIT AND DISPOSAL ACTIVITIES (Continued)
Automotive Sector
Business Restructuring - Europe
In October 2012, we committed to commence a transformation plan for our Europe operations. As part of this plan,
we closed two manufacturing facilities in the United Kingdom in 2013 and closed our assembly plant in Genk, Belgium at
the end of 2014. The Genk closure was subject to an information and consultation process with employee
representatives, which was completed in June 2013. The costs related to these closures were recorded beginning in the
second quarter of 2013.
Separation-related costs (excluding pension costs), totaled $1.1 billion and were recorded in Automotive cost of sales
and Selling, administrative and other expenses. These costs include both the costs associated with voluntary separation
programs in the United Kingdom and involuntary employee actions at Genk, as well as payments to suppliers. The
separation-related activity recorded in Other liabilities and deferred revenue, for the years ended December 31 was as
follows (in millions):
2014 2013
Beginning balance $ 497 $ —
Changes in accruals (a) 481 607
Payments (160) (131)
Foreign currency translation (88) 21
Ending balance $ 730 $497
__________
(a) Excludes pension-related costs of $16 million and $180 million for the years ended 2014 and 2013, respectively.
Business Restructuring - Australia
In May 2013, we committed to commence a transformation plan for our Australia operations. As part of this plan, we
will be closing manufacturing operations in Australia in October 2016. In August 2013, a two-phase separation plan was
approved, which included a line speed reduction in June 2014, ahead of the final closure. The costs related to the line
speed reduction were recorded throughout 2014. The costs related to the final closure were recorded beginning in the
fourth quarter of 2014 after the Enterprise bargaining agreement was agreed and ratified by the local government and we
determined these payments were probable.
Separation-related costs recorded in Automotive cost of sales and Selling, administrative and other expenses, include
both the costs associated with voluntary separation programs, and involuntary employee actions in Australia. The
separation-related activity recorded in Other liabilities and deferred revenue, for the year ended December 31 was as
follows (in millions):
2014
Beginning balance $ —
Changes in accruals (a) 149
Payments (29)
Foreign currency translation (9)
Ending balance $ 111
__________
(a) Excludes pension-related costs of $4 million for the year ended 2014.
Our current estimate of total separation-related costs for the Australian manufacturing facilities is approximately
$160 million, excluding approximately $20 million of pension-related costs. The separation-related costs not yet recorded
will be expensed as the employees continue to support Australia plant operations.
FS-58