Fitch Ratings has downgraded the short-term rating of
Yazaki International Corp. (YIC), a subsidiary of Japan based Yazaki
Corp., to 'B' from 'F3'.
The downgrade reflects Fitch's concerns regarding operating performance and limited potential for debt reduction. Operating performance will likely be negatively affected by commodity and labor costs as well as customer pricing pressure. YIC's products are labor intensive and require copper and plastic resins as major inputs. Since 2004, copper prices have more than doubled and plastic prices have increased more than 30%. Partially offsetting Fitch's concerns would be YIC's market share and technology position as one of the leading automotive wire harness suppliers plus the company's attempts to move production and component sourcing to lower cost regions. Simultaneously, Fitch is withdrawing the rating and will no longer provide analytical coverage of this issuer.
YIC is a holding company for marketing, engineering, distribution and certain manufacturing operations located in the Americas. YIC is a 100% owned subsidiary of privately-owned Yazaki Corp. Yazaki North America is the main operating subsidiary of YIC. Yazaki North America makes wire-harnesses, junction boxes; controls for power distribution, terminals, and connections; in-vehicle networks; fiber optics; and vehicle instrumentation. YIC's rating benefits from the 100% ownership by Yazaki Corp. and Yazaki Corp's global presence, although Yazaki Corp. does not guarantee the debt of YIC.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
The downgrade reflects Fitch's concerns regarding operating performance and limited potential for debt reduction. Operating performance will likely be negatively affected by commodity and labor costs as well as customer pricing pressure. YIC's products are labor intensive and require copper and plastic resins as major inputs. Since 2004, copper prices have more than doubled and plastic prices have increased more than 30%. Partially offsetting Fitch's concerns would be YIC's market share and technology position as one of the leading automotive wire harness suppliers plus the company's attempts to move production and component sourcing to lower cost regions. Simultaneously, Fitch is withdrawing the rating and will no longer provide analytical coverage of this issuer.
YIC is a holding company for marketing, engineering, distribution and certain manufacturing operations located in the Americas. YIC is a 100% owned subsidiary of privately-owned Yazaki Corp. Yazaki North America is the main operating subsidiary of YIC. Yazaki North America makes wire-harnesses, junction boxes; controls for power distribution, terminals, and connections; in-vehicle networks; fiber optics; and vehicle instrumentation. YIC's rating benefits from the 100% ownership by Yazaki Corp. and Yazaki Corp's global presence, although Yazaki Corp. does not guarantee the debt of YIC.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.