Note 3. Repositioning and Other Charges
| A summary of repositioning and other charges follows: | ||||||||||||
| Years Ended December 31, | ||||||||||||
| 2013 | 2012 | 2011 | ||||||||||
| Severance | $ | 186 | $ | 91 | $ | 246 | ||||||
| Asset impairments | 23 | 12 | 86 | |||||||||
| Exit costs | 22 | 16 | 48 | |||||||||
| Reserve adjustments | (30) | (66) | (26) | |||||||||
| Total net repositioning charge | 201 | 53 | 354 | |||||||||
| Asbestos related litigation charges, net of insurance | 181 | 156 | 149 | |||||||||
| Probable and reasonably estimable environmental liabilities | 272 | 234 | 240 | |||||||||
| Other | 9 | 0 | 0 | |||||||||
| Total net repositioning and other charges | $ | 663 | $ | 443 | $ | 743 | ||||||
| The following table summarizes the pretax distribution of total net repositioning and other charges by income statement classification: | |||||||||||
| Years Ended December 31, | |||||||||||
| 2013 | 2012 | 2011 | |||||||||
| Cost of products and services sold | $ | 566 | $ | 428 | $ | 646 | |||||
| Selling, general and administrative expenses | 97 | 15 | 97 | ||||||||
| $ | 663 | $ | 443 | $ | 743 | ||||||
| The following table summarizes the pretax impact of total net repositioning and other charges by segment: | |||||||||||
| Years Ended December 31, | |||||||||||
| 2013 | 2012 | 2011 | |||||||||
| Aerospace | $ | 45 | $ | (5) | $ | 29 | |||||
| Automation and Control Solutions | 93 | 18 | 191 | ||||||||
| Performance Materials and Technologies | 31 | 12 | 41 | ||||||||
| Transportation Systems | 190 | 197 | 228 | ||||||||
| Corporate | 304 | 221 | 254 | ||||||||
| $ | 663 | $ | 443 | $ | 743 | ||||||
In 2013, we recognized repositioning charges totaling $231 million including severance costs of $186 million related to workforce reductions of 3,081 manufacturing and administrative positions across all of our segments. The workforce reductions were primarily related to cost savings actions taken in connection with our productivity and ongoing functional transformation initiatives, achieving acquisition-related synergies in our Automation and Control Solutions segment, outsourcing of non-core components in our Aerospace and Transportation Systems segments, the shutdown of a manufacturing facility in our Performance Materials and Technologies segment, and factory transitions in our Automation and Control Solutions segment to more cost-effective locations. The repositioning charges include asset impairments of $23 million primarily related to manufacturing plant and equipment associated with the shutdown of a manufacturing facility in our Performance Materials and Technologies segment. The repositioning charges also includes exit costs of $22 million primarily related to closure obligations associated with the shutdown of manufacturing facilities and costs for early termination of lease contracts. Also, $30 million of previously established accruals, primarily for severance, in our Automation and Control Solutions and Performance Materials and Technologies segments were returned to income in 2013 due to changes in the scope of previously announced repositioning actions, lower than expected costs in completing the exit of a product line and fewer employee severance actions caused by higher attrition than originally planned associated with prior severance programs.
In 2012, we recognized repositioning charges totaling $119 million including severance costs of $91 million related to workforce reductions of 2,204 manufacturing and administrative positions across all of our segments. The workforce reductions were primarily related to the planned shutdown of a manufacturing facility in our Transportation Systems segment, the exit from a product line in our Performance Materials and Technologies segment, and cost savings actions taken in connection with our productivity and ongoing functional transformation initiatives. The repositioning charge also included asset impairments of $12 million principally related to manufacturing plant and equipment associated with the exit of a product line in our Performance Materials and Technologies segment. The repositioning charge also included exit costs of $16 million principally related to closure obligations associated with the planned shutdown of a manufacturing facility in our Transportation Systems segment and exit from a product line in our Performance Materials and Technologies segment. Also, $66 million of previously established accruals, primarily for severance, in our Automation and Control Solutions, Aerospace and Performance Materials and Technologies segments were returned to income in 2012 due primarily to fewer employee severance actions caused by higher attrition than originally planned associated with prior severance programs and changes in the scope of previously announced repositioning actions.
In 2011, we recognized repositioning charges totaling $380 million including severance costs of $246 million related to workforce reductions of 3,188 manufacturing and administrative positions across all of our segments. The workforce reductions were primarily related to the planned shutdown of a manufacturing facility in our Transportation Systems segment, cost savings actions taken in connection with our productivity and ongoing functional transformation initiatives, factory transitions in connection with acquisition-related synergies in our Automation and Control Solutions and Aerospace segments, the exit from and/or rationalization of certain product lines and markets in our Performance Materials and Technologies and Automation and Control Solutions segments, the consolidation of repair facilities in our Aerospace segment, and factory consolidations and/or rationalizations and organizational realignments of businesses in our Automation and Control Solutions segment. The repositioning charges included asset impairments of $86 million principally related to the write-off of certain intangible assets in our Automation and Control Solutions segment due to a change in branding strategy and manufacturing plant and equipment associated with the planned shutdown of a manufacturing facility and the exit of a product line and a factory transition as discussed above. The repositioning charges also included exit costs of $48 million principally for costs to terminate contracts related to the exit of a market and product line and a factory transition as discussed above. Exit costs also included closure obligations associated with the planned shutdown of a manufacturing facility and exit of a product line also as discussed above. Also, $26 million of previously established accruals, primarily for severance, in our Aerospace and Automation and Control Solutions segments, were returned to income in 2011 due principally to fewer employee separations than originally planned associated with prior severance programs.
| The following table summarizes the status of our total repositioning reserves: | |||||||||||||
| Severance | Asset | Exit | |||||||||||
| Costs | Impairments | Costs | Total | ||||||||||
| Balance at December 31, 2010 | $ | 270 | $ | - | $ | 34 | $ | 304 | |||||
| 2011 charges | 246 | 86 | 48 | 380 | |||||||||
| 2011 usage - cash | (136) | - | (23) | (159) | |||||||||
| 2011 usage - noncash | - | (86) | - | (86) | |||||||||
| Adjustments | (26) | - | - | (26) | |||||||||
| Foreign currency translation | (1) | - | - | (1) | |||||||||
| Balance at December 31, 2011 | 353 | - | 59 | 412 | |||||||||
| 2012 charges | 91 | 12 | 16 | 119 | |||||||||
| 2012 usage - cash | (113) | - | (23) | (136) | |||||||||
| 2012 usage - noncash | - | (12) | - | (12) | |||||||||
| Adjustments | (61) | - | (5) | (66) | |||||||||
| Foreign currency translation | 6 | - | - | 6 | |||||||||
| Balance at December 31, 2012 | 276 | - | 47 | 323 | |||||||||
| 2013 charges | 186 | 23 | 22 | 231 | |||||||||
| 2013 usage - cash | (139) | - | (21) | (160) | |||||||||
| 2013 usage - noncash | - | (23) | - | (23) | |||||||||
| Adjustments | (27) | - | (3) | (30) | |||||||||
| Foreign currency translation | 6 | - | - | 6 | |||||||||
| Balance at December 31, 2013 | $ | 302 | $ | - | $ | 45 | $ | 347 | |||||
Certain repositioning projects in our Aerospace, Automation and Control Solutions and Transportation Systems segments included exit or disposal activities, the costs related to which will be recognized in future periods when the actual liability is incurred. The nature of these exit or disposal costs includes asset set-up and moving, product recertification and requalification, and employee retention, training and travel. The following table summarizes by segment, expected, incurred and remaining exit and disposal costs related to 2011 repositioning actions which we were not able to recognize at the time the actions were initiated. The exit and disposal costs related to the repositioning actions in 2013 and 2012 which we were not able to recognize at the time the actions were initiated were not significant.
| Automation and | Transportation | ||||||||
| 2011 Repositioning Actions | Aerospace | Control Solutions | Systems | Total | |||||
| Expected exit and disposal costs | $ | 15 | $ | 11 | $ | 7 | $ | 33 | |
| Costs incurred during: | |||||||||
| Year ended December 31, 2011 | (1) | - | - | (1) | |||||
| Year ended December 31, 2012 | (2) | (3) | (1) | (6) | |||||
| Year ended December 31, 2013 | (2) | (4) | (2) | (8) | |||||
| Remaining exit and disposal costs at | |||||||||
| December 31, 2013 | $ | 10 | $ | 4 | $ | 4 | $ | 18 | |
In 2013, 2012 and 2011, we recognized charges of $272, $234 and $240 million, respectively, for environmental liabilities deemed probable and reasonably estimable during the year. In 2013 this included a charge of $58 million in the fourth quarter related to Onondaga Lake in Syracuse, New York mainly reflecting updated estimates for completion of the dredging and capping components of the approved Lake remedy. In 2013, 2012 and 2011, we recognized asbestos related litigation charges, net of insurance, of $181, $156 and $149 million, respectively. Environmental and Asbestos matters are discussed in detail in Note 22 Commitments and Contingencies of Notes to the Financial Statements. In 2013 we also recognized other charges of $9 million related to the resolution of legal matters.