Tuesday, June 02, 2020

Embraer seeks partners, but does not want model repetition with Boeing

But Francisco Gomes Neto said that any new agreement will be smaller in scope than the one that had been negotiated with Boeing and that was terminated in April.
"We're not looking for a partnership of the size we had with Boeing," he said. "We thought it would be much faster and more efficient partnerships per project."
To this end, Gomes Neto will ud the costly separation process that prepared Embraer's lucrative commercial jet division for the acquisition of Boeing and will bring all its employees back to the same corporate roof.
The two companies are now involved in arbitration proceedings against each other, both questioning whether the necessary conditions for the deal have been met.
When Boeing canceled the planned deal in April, when the coronavirus devastated the travel industry, Embraer ran out of a plan B.
Gomes Neto acknowledged that Embraer is only drawing up a five-year business plan for the commercial jet division that Boeing would have managed. Embraer drew up similar plans last year for its defense units and executive jets, which would be independent of Boeing.
The commercial unit produces medium-sized jets of up to 150 passengers, which compete directly with the Airbus A220. This aircraft was initially developed by a smaller company, Bombardier of Canada, whose jet design was purchased by the European manufacturer.
Gomes Neto, who took office after signing the Boeing contract, is now remaking Embraer as a company focused on finding smaller, more targeted partnerships.
A new turboprop aircraft that Embraer wants to develop but no longer has the money to finance could potentially generate an agreement, he said.
"In these first years now coming out of this crisis, we will have to prioritize many investments," Gomes Neto said. "We reduced all investments, some very close to zero."
Reuters reported on Friday that China, India and Russia were considering possible partnerships with Embraer.
"We don't have negotiations going on at the moment, but they are undoubtedly potential partners," Gomes Neto said of these countries. "We are evaluating these markets at this time ... but it's still in an embryonic stage."
Another potential partnership involves the KC-390 military cargo plane, and Boeing would help the market. Although Gomes Neto said China could partner in commercial jets, the calculation is more complex for a military aircraft because it would be sold to U.S. allies in partnership with Boeing.
"The military arena is a little more delicate ... so for now, let's focus on our original business plan for the KC-390," he said. "So a partnership would only be a second stage."
UOL - 02/06/2020 News Item translated automatically
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