Legal, Political, Economic and Labor Risks Associated with Overseas Expansion
First written in FY2016. 7 of 15 entries say "Worsened", first in FY2021-Q3. Latest entry: 2026-06-15.
Hi-Lex moved to the "Worse" side of this theme in 2021, 2 years before the typical company in this theme (2023).
The whole theme swung hardest in 2024: 6 of 10 companies on the "Worse" side.
0 other companies' latest entry also says "Materialised".
- 2026-06-15MaterialisedEarnings presentation materials
「Delayed recovery of tariffs in the Americas and higher labor costs due to the appreciation of the Mexican peso against the U.S. dollar」
Delayed tariff recovery and higher labor costs resulting from the stronger Mexican peso were reflected in the decline in operating profit in the Americas. - FY2026-H1MaterialisedAnnual report
「Higher labor cost ratio at the Mexican subsidiary due to the appreciation of the Mexican peso against the U.S. dollar」
Regarding foreign exchange and labor risks associated with overseas operations, the appreciation of the Mexican peso and resulting increase in the labor cost ratio were identified as an actual factor behind the decline in operating profit of the pre-integration business. - FY2024WorsenedAnnual report
「In North America, sales were ¥104,626 million, up ¥1,876 million year on year, or 1.8%, as the impact of production cuts by major customers was offset by the increase in the yen-denominated value of sales resulting from the weaker yen and the start of operations at a Mexican subsidiary. Despite efforts to reduce costs, improve productivity and review the pricing strategy, operating results were an operating loss of ¥3,852 million, compared with operating profit of ¥865 million in the same period of the previous year, due to the impact of lower capacity utilization and insufficient recovery of increased labor costs and expenses.」
In North America, sales increased due in part to the start of operations at a Mexican subsidiary, while operating results deteriorated from profit to a loss of ¥3,852 million due to production cuts by major customers, lower capacity utilization, and insufficient recovery of labor costs and expenses. - FY2024-Q2WorsenedAnnual report
「In North America, sales were ¥52,273 million, up ¥4,541 million year on year, or 9.5%, as sales to customers remained sluggish due to the impact of the United Auto Workers (UAW) strike in the United States, while the weaker yen increased the yen-denominated value of sales. Despite efforts to reduce costs and improve productivity, operating results were an operating loss of ¥1,753 million, compared with an operating loss of ¥1,104 million in the same period of the previous year, due to persistently high production costs, including labor and material costs.」
The impact of the UAW strike in the United States continued to weigh on customer sales, and together with persistently high labor and material costs, expanded the North American operating loss from the same period of the previous year. - FY2024-Q1MaterialisedAnnual report
「In North America, sales were ¥24,665 million, up ¥514 million year on year, or 2.1%, as sales to customers remained sluggish due to the impact of the United Auto Workers (UAW) strike in the United States, while the weaker yen increased the yen-denominated value of sales. Despite efforts to reduce costs and improve productivity, operating results were an operating loss of ¥1,237 million, compared with an operating loss of ¥367 million in the same period of the previous year, due to the slowdown in sales and persistently high costs, including labor costs.」
Regarding labor and social disruption risks associated with overseas operations, the UAW strike in the United States materialized as sluggish customer sales, and the North American operating loss widened from ¥367 million to ¥1,237 million. - FY2023-Q3MitigatedAnnual report
「Despite efforts to reduce costs, improve productivity and review the pricing strategy, operating results were an operating loss of ¥417 million, compared with an operating loss of ¥2,330 million in the same period of the previous year, due in part to higher costs resulting from increases in the prices of steel, resin materials and other inputs, higher labor costs caused by labor shortages in the United States, and persistently high global logistics costs.」
Higher labor costs caused by labor shortages in the United States continue, but the North American operating loss narrowed from ¥2,330 million in the same period of the previous year to ¥417 million. The burden of labor, logistics and material costs remains. - FY2023-Q2WorsenedAnnual report
「Despite efforts to reduce costs and improve productivity, operating results were an operating loss of ¥1,104 million, compared with an operating loss of ¥1,182 million in the same period of the previous year, due to the impact of persistently high production costs, including labor and material costs.」
Production costs, including labor and material costs, remained persistently high in North America. Although the operating loss narrowed, the labor and cost burden continues. - FY2023-Q1RestatedAnnual report
「Operating profit was ¥148 million, up ¥29 million year on year, or 24.6%, due in part to the impact of higher labor costs caused by tight employment conditions.」
Regarding labor-related risks associated with overseas operations, higher labor costs caused by tight employment conditions continue to be identified as a factor affecting performance. - FY2022-Q3WorsenedAnnual report
「The company posted an operating loss of ¥3,282 million, compared with operating profit of ¥3,285 million in the same period of the previous year, mainly due to tight employment conditions, primarily in the United States, and lower production efficiency associated with responding to customer plant closures and production cuts.」
In addition to tight employment conditions, primarily in the United States, lower production efficiency resulting from customer plant closures and production cuts affected operating results, and the labor risk burden associated with overseas operations continues. - FY2022-Q2WorsenedAnnual report
「In North America, sales were ¥37,722 million, up ¥3,823 million year on year, or 11.3%, as the impact of customer production cuts caused by semiconductor shortages was offset by the increase in the yen-denominated value of sales resulting from the weaker yen. Operating results were an operating loss of ¥1,182 million, compared with operating profit of ¥694 million in the same period of the previous year, despite efforts to reduce costs and improve productivity, due in part to higher costs resulting from increases in the prices of steel, resin materials and other inputs, higher labor costs caused by labor shortages in the United States, and persistently high global logistics costs.」
In North America, labor shortages in the United States materialized as higher labor costs, and together with higher material and logistics costs, deteriorated operating results from profit in the same period of the previous year to a loss of ¥1,182 million. - FY2022-Q1WorsenedAnnual report
「Operating profit was ¥119 million, due mainly to production efficiency struggling to improve amid tight employment conditions, primarily in the United States, and higher labor costs, among other factors, a decrease of ¥1,927 million year on year, or 94.2%.」
Regarding labor risks associated with overseas operations, tight employment conditions, primarily in the United States, have affected operating profit through lower production efficiency and higher labor costs. - FY2021-Q3WorsenedAnnual report
「The decline in production efficiency and sharp increase in labor costs caused by labor shortages resulting from the impact of infectious diseases, mainly in the United States」
Regarding labor risks associated with overseas operations, labor shortages, mainly in the United States, have affected actual operating results through lower production efficiency and sharply higher labor costs. - FY2021-Q2MaterialisedAnnual report
「Mainly due to increases in labor costs and fixed costs in the United States in North America」
Regarding personnel and labor risks associated with overseas operations, higher labor costs caused by labor shortages in the United States are identified as a factor behind the decline in actual operating profit. - FY2019RestatedAnnual report
「The following risks are considered in connection with these overseas operations: ① unexpected changes in laws or regulations ② adverse political or economic factors ③ difficulty recruiting and retaining personnel ④ labor disputes such as strikes ⑤ social disruption caused by terrorism, war and other factors」
As overseas operations become increasingly important, risks related to laws and regulations, political and economic factors, personnel, labor, and social disruption continue to be identified. - FY2016First statedAnnual report
「The following risks are considered in connection with these overseas operations: ① unexpected changes in laws or regulations ② adverse political or economic factors ③ difficulty recruiting and retaining personnel ④ labor disputes such as strikes ⑤ social disruption caused by terrorism, war and other factors」
As overseas operations become increasingly important, changes in laws and regulations, political and economic factors, securing personnel, labor disputes, and social disruption caused by terrorism and war are identified as combined risks.