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Embraer S.A. (Portuguese pronunciation: [ẽbɾaˈɛɾ]) is a Brazilian aerospace conglomerate that produces commercial, military, executive and agricultural aircraft[6] and provides aeronautical services. It is headquartered in São José dos Campos, São Paulo State.

The company is the third largest producer of civil aircraft, after Airbus and Boeing.[7]

History

Seeking to develop a domestic aircraft industry, the Brazilian government made several investments in this area during the 1940s and 1950s.[8] However, it was not until 1969 that Empresa Brasileira de Aeronáutica (Embraer) was created as a government-owned corporation.[9] Its first president, Ozires Silva, was a government appointee, and the company initially produced a turboprop passenger aircraft, the Embraer EMB 110 Bandeirante.[10]

Early growth

The Brazilian Government contributed to Embraer's early growth by providing production contracts.[11] The company sold solely to the domestic market until 1975.

While military aircraft made up the majority of Embraer's products during the 1970s, including the Embraer AT-26 Xavante and the Embraer EMB 312 Tucano,[citation needed] by 1985, it had debuted a regional airliner, the Embraer EMB 120 Brasilia.[12] Aimed at the export market, this plane was the first of Embraer's highly successful small airliners.[13]

License-built Pipers

In 1974, the company started to produce Piper Aircraft light planes under license.[14] Piper first put together knock-down kits in their US factory for Embraer to assemble and market in Brazil and Latin America.[citation needed] By 1978, most of the parts and components were being sourced locally.[14] Between 1974 and 2000, nearly 2,500 license-built Pipers were produced by Embraer.[14]

Acquisition of Aerotec

Aerotec was a design and manufacturing company founded in Brazil in 1962 under the auspices of the Brazilian General Command for Aerospace Technology (CTA) in Sao Jose dos Campos.

Beginning in the late 1960s, the firm manufactured a two-seat trainer for the Brazilian Air Force, the Aerotec Uirapuru. A small number were also built for the civil market, and still others were exported to other Latin American countries.

By 1980, Aerotec's main business was producing components for Embraer. However, around this time, the Air Force became interested in an uprated version of the now-venerable Uirapuru. A prototype was built (designated Uirapuru II) but by the time it flew, the Air Force no longer required it. A small number were built for export.

In 1987, the firm was sold to Embraer.

Gallery

Aircraft

Components

Privatization

Born from a Brazilian government plan and having been state-run from the beginning,[8] Embraer began a privatization process during the government of Itamar Franco.[15] This was a period of privatization for many state-controlled companies in Brazil. Embraer was sold on December 7, 1994,[9][16] which helped it avoid a looming bankruptcy.[8] The company continued to win government contracts.[citation needed]

The Brazilian government retains interest through possession of golden shares, which allow it veto power.[13]

Initial public offerings

In 2000, Embraer made simultaneous initial public offerings on the NYSE and BM&F Bovespa stock exchanges. In 2008 its NYSE-traded shares were American depositary receipts representing 4 BM&F Bovespa shares and ownership was : Bozano Group 11.10%, Previ 16.40%, Sistel 7.40%, Dassault Aviation 2.1%, EADS 2.1%, Thales 2.1%, Safran 1.1%, Government of Brazil 0.3%, the remainder being publicly traded.[13]

As of December 31, 2014 the shareholders with more than 5% of the Company´s Capital were :[17]

Convergence with Boeing

In December 2017, the Wall Street Journal reported Boeing has been in takeover talks with Embraer, valuing it over its $3.7 billion market value, awaiting Brazilian government approbation.[18] The two companies confirmed that a potential combination was being discussed, with a transaction subject to approval by the Brazilian government and regulators, the boards of the two companies, and their shareholders.[19] The potential deal is seen as a reaction to the Airbus–Bombardier deal on the CSeries.[20]

On December 22, 2017, Brazilian President Michel Temer said the sale of Embraer to Boeing was "out of the question", adding that the government is in favor of partnerships with the company, but warning that it will veto changes in stock control.[21] On December 28, defense minister Raul Jungmann opposed transferring control of Embraer SA as its the defense business cannot be separated from its commercial operations, but would welcome a deal maintaining local control of the company.[22] On January 2, 2018, Brazilian newspaper Valor Econômico reported that forming joint ventures, sharing costs and income in definite areas, was preferable to avoid changing control of Embraer.[23]

Product line expansion: military, regional and executive

In the mid-1990s, the company pursued a product line more focused on small commercial planes over the military aircraft that had previously made up the majority of its manufacturing.[8] It soon expanded to the production of larger regional airliners, with 70–110 seats, and smaller business jets.[13] Today, the company manufactures for both defense and commerce.[13]

Executive jets

At the 2000 Farnborough Airshow, Embraer launched the Legacy 600, a business jet variant of the ERJ. In 2002, a dedicated business unit was organised as Embraer Executive Jets as the Legacy was introduced. In 2005, the Phenom 100 was then conceptualised as an air taxi like the Eclipse 500, competing with Cessna and Hawker Beechcraft. It was introduced in 2008 and is the basis of the larger Phenom 300. The midsize Legacy 450 and Legacy 500 were jointly developed as clean sheet designs, where the Lineage 1000 is a VIP version of the E190. In 2016, Embraer delivered its 1,000th executive jet and have a market share of 17% by volume, acknowledging it lacks an ultra-long-range large cabin jet.[24]

Military transport

On April 19, 2007, Embraer announced it was considering the production of a twin-jet military transport, the Embraer KC-390. Work began in May 2009 with funding from the Brazilian Air Force.[25] Correios, the Brazilian postal service, has shown interest in buying this aircraft.[26][27] Using much of the technology developed for the Embraer 190, the C-390 would carry up to 23 tons of cargo[28] and aims to replace Cold War-era cargo aircraft.[29]

While firm orders for this yet-to-be-produced hauler had not yet been made in the fall of 2010,[25] Argentina had asked for six examples and several other South American nations also expressed interest.[30][31]

Government subsidy controversy

Main article: Bombardier Aerospace and Embraer S.A. government subsidy controversy

Brazil and Canada engaged in an international, adjudicated trade dispute over government subsidies to domestic plane-makers in the late 1990s and early 2000s. The World Trade Organization determined that both countries had provided illegal subsidies to what were supposed to be privately owned industries. Brazil ran an illegal subsidy program, Proex, benefiting its national aviation industry from at least 1999–2000, and Canada illegally subsidized its indigenous regional airliner industry, comprising Bombardier Aerospace.

Production bases and facilities

The company's headquarters and a production base are in São José dos Campos, São Paulo, Brazil. It also has production bases in the State of São Paulo at Botucatu, Eugênio de Melo (a district of São José dos Campos) and Gavião Peixoto. The company has offices in Beijing, Fort Lauderdale, Florida (U.S.), Paris, Singapore, and Washington, D.C. (U.S.).[32]

Non-Brazilian main facilities

Subsidiaries

  • EAMS – Embraer Aircraft Maintenance Services Inc. (Nashville, TN, U.S.) – maintenance services site.
  • OGMA – Indústria Aeronáutica de Portugal (Alverca do Ribatejo, Portugal) – aircraft component maintenance, repair and manufacturing, plus aircraft maintenance services.
  • Embraer Aircraft Holding, Inc. – Its U.S. headquarters are in Fort Lauderdale, Florida, in a facility founded in 1979. Its external relations office is in Washington, D.C..[34]
  • Embraer Aero Seating Technologies – Inaugurated in September 2016 in the city of Titusville, Florida, Embraer Aero Seating Technologies produces aircraft seats.[35]
  • Mesa Unit (Located in Mesa, Arizona, U.S.) – Implemented in 2008, performs maintenance, repair and overhaul services on the Phenom and Legacy executive aircraft line.[36]
  • Windsor Locks Unit (Located in Windsor Locks, Connecticut, U.S.) – Implemented in 2008, as well as the Mesa Unit, also performs maintenance, repair and revision services in Embraer's executive line.
  • Melbourne Unit (Located in Melbourne, Florida, U.S.) – Implemented in 2011, it is the first unit in the United States to carry out the final assembly of aircraft. It produces the line of executives Phenom 100 and Phenom 300. In November 2012 work began on an Engineering and Technology Center at the Melbourne facility.
  • ECC Leasing - Embraer's in-house leasing division, based in Dublin, Ireland, managing and re-marketing the Embraer aircraft portfolio owned directly by the manufacturer.[37]

Joint ventures

Aircraft products

Commercial

Military

Corporate

Agriculture

Utility

Experimental

  • Embraer MFT-LF light fighter/advanced trainer project in the 1980s and cancelled due to lack of interest

Future

In October 2010, Embraer suggested plans to develop very-long-range business jets, entering a sector currently dominated by Gulfstream, Bombardier, and Dassault.[40] In October 2013, they unveiled the Lineage 1000E.[41]

In May 2011, Embraer announced that it was considering building a larger airliner than the E-jets, with five-abreast seating,[42] but, eventually, choose to develop the second generation of its E-Jet family, as E-jets E2.[43]

In Feb 2014, India's newest airline, Air Costa, announced an order for 50 E-jets E2 aircraft worth $2.94 billion at list price. The order has an option for another 50 planes.[44]

Licensed-version aircraft

Military

General aviation

Commercial aircraft deliveries

Year 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Deliveries 4 32 60 96 160 161 131 101 148 141 130 169 204 244 246[45] 204[46] 205[47] 209 208[48] 221[49] 225[50]

The numbers include military versions of commercial aircraft.

Total delivered-backlog-options as of June 30, 2007: 862-53-131 145 Family, 256-399-719 170/190 Family

Competition in the Regional jet market

For short range passenger aircraft known as regional airliners, see Regional jet.
Orders and Deliveries by year
ARJ21 CRJ700 E-Jet MRJ-70 Superjet 100 An-148 year
Deliveries (Orders) (55) 503(619) 582(877) (65) (122) 1(50) 2009
Deliveries (Orders) (87) 576(649) 671(916) (15) (137) 5(72) 2010
Deliveries (Orders) (189) 593(654) 770(1018) (15) 3(168) (180) 2011
Deliveries (Orders) 2012
Deliveries (Orders) (252) 636(725) 966(1212) (165) 23(229) 2013
ARJ21 CRJ700 E-Jet MRJ-70 Superjet 100 An-148 year
World Airliners Regionals 2009[51] World Airliners Regionals 2010[52] World Airliners Regionals 2011[53] World Airliners Regionals 2012[54]
World Airliners Regionals 2013[55]

References

  1. ^ "Corporate governance". Embraer. Retrieved 21 September 2014. 
  2. ^ "Botelho resigns as chairman of Embraer". Flightglobal. Retrieved 15 January 2012. 
  3. ^ "2015 Results". Embraer. Retrieved 2016-09-09. 
  4. ^ "Embraer - Investor Relations - Net Income". Embraer. Retrieved 2015-05-29. 
  5. ^ Highlights, Embraer .
  6. ^ "Aircraft". BR: Embraer. Retrieved May 12, 2014. [permanent dead link]
  7. ^ "Embraer vê clientes mais dispostos à compra de aviões". Exame Magazine. Retrieved 8 February 2014. 
  8. ^ a b c d Territorial Reviews, Madrid, ES: OECD, 2007, pp. 156–157, 264 
  9. ^ a b "Timeline", Historical Center (official site), BR: Embraer .
  10. ^ "Ozires Silva" (in Portuguese). Época Negócios. 28 January 2014. Retrieved 24 October 2014. 
  11. ^ "History", Historical Center (official site), BR: Embraer .
  12. ^ The Embraer EMB120 Brasilia, Air liners .
  13. ^ a b c d e Monks, Robert AG; Minow, Nell (2008), Corporate Governance, John Wiley & Sons, pp. 356–359 
  14. ^ a b c "EMB 710 Carioca", Aircraft History, BR: Embraer History Center .
  15. ^ Eckhouse, John (January 12, 1991), "Brazil on Road Peddling State-Owned Enterprises", The San Francisco Chronicle (final ed.), San Francisco, CA, US, p. B.1 .
  16. ^ "Os efeitos da privatização sobre o desempenho econômico e financeiro das empresas privatizadas" [The effects of privatisation on the economical & financial performance of the privatised companies], Scielo (in Portuguese), BR .
  17. ^ "CAPITAL OWNERSHIP". Embraer Investor Relations. 
  18. ^ Dana Mattioli, Dana Cimilluca and Liz Hoffman (Dec 21, 2017). "Boeing Held Takeover Talks With Brazilian Aircraft Maker Embraer". Wall Street Journal. 
  19. ^ "Boeing and Embraer Confirm Discussions on Potential Combination" (Press release). December 21, 2017.  Boeing and Embraer
  20. ^ "Boeing Is in Talks for Combination With Regional-Jet Maker Embraer". Bloomberg.com. 21 December 2017. Retrieved 22 December 2017. 
  21. ^ Letícia Fernandes e Manoel Ventura (Dec 22, 2017). "Capital estrangeiro na Embraer é 'muito bem-vindo', diz Temer". O Globo Journal (in Portuguese). 
  22. ^ "Brazil defense ministry opposes giving up Embraer control to Boeing". Reuters. Dec 28, 2017. 
  23. ^ "Boeing talks not considering change of control at Embraer: paper". Reuters. Jan 2, 2018. 
  24. ^ "EBACE: Embraer caps 16-year run with 1,000th delivery". Flightglobal. 17 May 2016. 
  25. ^ a b "Portugal interested in Brazilian military cargo plane", Monitoring European, BBC, February 1, 2010 .
  26. ^ "Costa confirma projeto dos Correios com cargueiro C-390", Monitor Mercantil, August 28, 2007, retrieved October 15, 2007 .
  27. ^ "Brazilian postal service may order Embraer C-390 freighters", Flight global, September 4, 2007, retrieved October 15, 2007 .
  28. ^ "Defense Systems". Embraer. Archived from the original on 2013-04-24. Retrieved 2013-03-21. 
  29. ^ Embraer has military transport aircraft under study (PDF), Embraer .
  30. ^ Argentina to buy 6 military transport jets from Brazil's Embraer, Madrid: EFE News Service, October 30, 2010 .
  31. ^ "Defense Watch", Defense Daily, Potomac, 247 (47), September 7, 2010 .
  32. ^ "Global presence". Embraer. 2012. Retrieved 24 Dec 2013. [permanent dead link]
  33. ^ Trautvetter, Chad. "Approval Imminent for Embraer Legacy 450/500 U.S. Plant", AINonline, 26 August 2014. Accessed 4 September 2014.
  34. ^ Facilities, Embraer, September 11, 2012, archived from the original on 2010-12-15, Embraer Aircraft Holding, Inc. 276 SW 34th Street Fort Lauderdale, FL 33315 USA […] Embraer Aircraft Holding, Inc. 1700 Pennsylvania Ave. NW Suite 200 USA Washington, DC 20008 
  35. ^ Mercado e Eventos, Embraer inaugura Centro de Produção de Assentos com 4.600m² na Flórida, retrieved 10 December 2017 
  36. ^ Embraer 2012. "Presença global". Retrieved 10 December 2017. 
  37. ^ "Embraer ECC Leasing Company Lessor Profile - CAPA". Retrieved 2017-09-07. 
  38. ^ "Embraer in China". Aviation Week & Space Technology: 60. 14 October 2013. 
  39. ^ E-JETS E2 Embraer Commercial Aviation
  40. ^ "Embraer mulls over new types", Flight global, 2010-10-21 .
  41. ^ "Embraer Executive Jets Introduces the Lineage 1000E". BR: Embraer. Retrieved 17 December 2013. 
  42. ^ "Correction: Embraer eyes possible 'five-abreast aircraft'". Flight global. 2011-05-06. Retrieved 2011-05-08. 
  43. ^ "Embraer Launches "E2", the Second Generation of E-Jets", Aviation pros, archived from the original on 2014-09-11 .
  44. ^ "India's Air Costa places 2.94 bn order for 50 E-Jets E2 Embraer aircraft", The Economic Times, The India Times .
  45. ^ "Embraer Closes Out 2010 With 246 Jets Delivered". PR Newswire. Traders Huddle. Jan 18, 2011. Archived from the original on 2013-02-04. Retrieved 2013-03-21. 
  46. ^ Embraer delivers 105 commercial & 99 executive jets in 2011 (PDF) (press release), BR: Embraer .
  47. ^ Embraer Delivers 106 Commercial and 99 Executive Jets In 2012 (PDF) (press release), BR: Embraer .
  48. ^ [1]
  49. ^ EMBRAER RELEASES FOURTH QUARTER AND FISCAL YEAR 2015 RESULTS AND 2016 OUTLOOK.
  50. ^ Embraer reaches targets with delivery of 108 commercial jets and 117 executive jets in 2016.
  51. ^ "Regionals", World air liners, Flight global, 2009 .
  52. ^ World air liners regional diversity, Flight global, 2010 .
  53. ^ "Regionals", World air liners, Flight global, 2011 .
  54. ^ World air liner census, Flight global, 2012 .
  55. ^ "World Ariliners" (PDF), In focus, Cloud front .

External links

Further reading

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