The Company undertakes restructuring activities, as necessary, to execute management’s strategy and streamline operations, consolidate and take advantage of available capacity and resources and ultimately achieve net cost reductions. Restructuring activities include efforts to integrate and rationalize the Company’s business and to relocate operations to best-cost locations.

The Company’s restructuring expenses consist primarily of employee termination benefits (principally severance and/or termination benefits) and other costs, which are primarily professional fees and costs related to facility closures and exits.

The following tables display the Company’s restructuring expense by reportable segment:


	Three Months Ended March 31, 2026
(in millions)	Turbos & Thermal Technologies		Drivetrain & Morse Systems		PowerDrive Systems		Battery Energy Systems		Corporate		Total
Employee termination benefits	$	6	$	1	$	—	$	4	$	2	$	13
Other	3		3		(1)		—		—		5
Total restructuring expense	$	9	$	4	$	(1)	$	4	$	2	$	18

	Three Months Ended March 31, 2025
(in millions)	Turbos & Thermal Technologies		Drivetrain & Morse Systems		PowerDrive Systems		Battery Energy Systems		Corporate		Total
Employee termination benefits	$	5	$	—	$	8	$	6	$	1	$	20
Other	2		1		8		—		—		11
Total restructuring expense	$	7	$	1	$	16	$	6	$	1	$	31

The following table displays rollforwards of the restructuring liability recorded within the Company’s Condensed Consolidated Balance Sheets and the related cash flow activity:


(in millions)	Employee Termination Benefits		Other		Total
Balance at January 1, 2026	$	42	$	12	$	54
Restructuring expense, net	13		5		18
Cash payments	(17)		(7)		(24)
Foreign currency translation adjustment and other	—		—		—
Balance at March 31, 2026	38		10		48
Less: Non-current restructuring liability	4		—		4
Current restructuring liability at March 31, 2026	$	34	$	10	$	44

2024 Structural Cost Plan In June 2024, the Company approved an approximately $75 million restructuring plan to address the cost structure in its PowerDrive Systems reportable segment due to electric vehicle adoption volatility across different regions, which could include realignment of the segment’s manufacturing footprint. During the three months ended March 31, 2026, the Company recorded a revision of previous estimates of $1 million and during the three months ended March 31, 2025, the Company recorded $16 million of restructuring costs related to this plan. Cumulatively, the Company has incurred $43 million of restructuring charges related to this plan.

2023 Structural Cost Plan In 2023, the Company announced a $130 million to $150 million restructuring plan to address structural costs primarily in its Foundational products businesses. During the three months ended March 31, 2025, the Company recorded $8 million, of restructuring costs related to this plan. Cumulatively, the Company incurred $148 million of restructuring charges related to this plan. The actions under this plan are complete.

During the three months ended March 31, 2026 and 2025, the Company recorded $19 million and $7 million, respectively, of restructuring costs for individually approved restructuring actions, as more fully described below.

Except for the described above, there have been no changes in previously initiated plans that have resulted (or are expected to result) in a material change to the Company’s restructuring costs.

The following provides details of restructuring expense incurred by the Company’s reportable segments during the three months ended March 31, 2026 and 2025, related to the plans discussed above:

•During the three months ended March 31, 2025, the segment recorded $7 million of restructuring costs under this plan. These costs primarily related to $5 million of employee termination benefits and $2 million of professional fees for facilities in Europe and China.

•During the three months ended March 31, 2026, the segment recorded $9 million of restructuring costs for individually approved restructuring actions. These costs primarily related to $6 million of employee termination benefits and $3 million of contractual settlement expense for facilities in Europe and China.

•During the three months ended March 31, 2026, the segment recorded $4 million of restructuring costs for individually approved restructuring actions. These costs primarily related to $1 million of employee termination benefits and $3 million of equipment relocation costs for a facility in the U.S.

•During the three months ended March 31, 2025, the segment recorded $16 million of restructuring costs under this plan. These costs primarily related to $8 million of employee termination benefits and $7 million of equipment relocation costs and professional fees for facilities in the U.S., Asia and Europe.

•During the three months ended March 31, 2026, the segment recorded $4 million of individually approved restructuring costs. These costs primarily related to employee termination benefits associated with an overhead cost reduction initiative in Europe.

•During the three months ended March 31, 2025, the segment recorded $6 million of individually approved restructuring costs. These costs primarily related to employee termination benefits for facilities in the U.S. and China, including the consolidation of the Company’s North American battery systems business footprint and the exit of its charging business. Refer to Note 3, “Acquisitions and Dispositions” for more information.

•During the three months ended March 31, 2026, the segment recorded $2 million of individually approved restructuring costs. These costs primarily related to employee termination benefits associated with a global overhead cost reduction initiative.

Estimates of restructuring expense are based on information available at the time such charges are recorded. Due to the inherent uncertainty involved in estimating restructuring expenses, actual amounts paid for such activities may differ from amounts initially recorded. Accordingly, the Company may record revisions of previous estimates by adjusting previously established accruals.

The Company continues to evaluate different options across its operations to reduce existing structural costs over the next few years. The Company will recognize restructuring expense associated with any future actions at the time they are approved and become probable or are incurred. Any future actions could result in significant restructuring expense.