Johnson Controls 2011 Annual Report Download - page 91
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91
The following table summarizes the changes in the Company’s 2009 Plan reserve, included within other current
liabilities in the consolidated statements of financial position (in millions):
Employee
Severance and
Termination
Currency
Benefits
Other
Translation
Total
Balance at September 30, 2009
$
140
$
2
$
8
$
150
Noncash adjustment - underspend
(42)
-
-
(42)
Noncash adjustment - revised actions
20
-
-
20
Utilized - cash
(64)
-
-
(64)
Utilized - noncash
-
(2)
(6)
(8)
Balance at September 30, 2010
$
54
$
-
$
2
$
56
Utilized - cash
(43)
-
-
(43)
Utilized - noncash
-
-
(2)
(2)
Balance at September 30, 2011
$
11
$
-
$
-
$
11
To better align the Company’s resources with its growth strategies while reducing the cost structure of its global
operations, the Company committed to a significant restructuring plan (2008 Plan) in the fourth quarter of fiscal
2008 and recorded a $495 million restructuring charge. The restructuring charge related to cost reduction initiatives
in its automotive experience, building efficiency and power solutions businesses and included workforce reductions
and plant consolidations. The Company expects to substantially complete the 2008 Plan by the end of 2011. The
automotive-related restructuring was in response to the fundamentals of the European and North American
automotive markets. The actions targeted reductions in the Company’s cost base by decreasing excess
manufacturing capacity due to lower industry production and the continued movement of vehicle production to low-
cost countries, especially in Europe. The restructuring actions in building efficiency were primarily in Europe where
the Company centralized certain functions and rebalanced its resources to target the geographic markets with the
greatest potential growth. Power solutions actions focused on optimizing its regional manufacturing capacity.
Since the announcement of the 2008 Plan in September 2008, the Company has experienced lower employee
severance and termination benefit cash payouts than previously calculated in Europe for building efficiency and
automotive experience of approximately $95 million, all of which was identified prior to the current fiscal year, due
to favorable severance negotiations, individuals transferred to open positions within the Company and changes in
cost reduction actions from plant consolidation to downsizing of operations. The underspend of the initial 2008 Plan
has been committed for similar additional restructuring actions. The underspend experienced by building efficiency
in Europe has been committed by the same group for workforce reductions and plant consolidations. The
underspend experienced by automotive experience in Europe has been committed for additional plant consolidations
for automotive experience in North America and workforce reductions for building efficiency in Europe. The
planned workforce reductions disclosed for the 2008 Plan have been updated for the Company’s revised actions.