Monday, April 15, 2024

Embraer SA

Embraer SA, formerly Embraer – Empresa Brasileira de Aeronautica SA, is a Brazil-based holding company primarily engaged in the manufacture of aircrafts.

The Company divides its operations into three main segments: Commercial Aviation; Defense and Security, and Executive Aviation. The Commercial Aviation segment is involved in the development, production and sale of commercial jets, as well as in the provision of support services, with emphasis on the regional aviation industry and aircraft leasing. The Defense and Security segment mainly includes the research, development, production and modification of defense aircrafts. Through the Executive Aviation segment, the Company is active in the development, production and sale of business jets, provision of support services related to this sector of the market and aircraft leasing. The Company has subsidiaries, affiliated companies and representative offices in Brazil, the United States, France, Spain, Portugal, China and Singapore.”

“Embraer History

Seeking a domestic aircraft manufacturer, the Brazilian government made several investments in this area during the 1940s and ’50s, but it was not until 1969 that Empresa Brasileira de Aeronáutica (Embraer) was created as a government-owned corporation.

The company’s first product was a turboprop transport, the Embraer EMB 110 Bandeirante.

Early growth

The Brazilian Government contributed to Embraer’s early growth by providing license production contracts. The company increased its product line; it sold solely to the domestic market until 1975.

While military aircraft made up the majority of Embraer’s products during the 1970s, by 1985 a regional airliner had debuted, the Embraer EMB 120 Brasilia. Aimed at the export market, this plane marked the first of Embraer’s highly successful small airliners.

License-built Pipers

In 1974 the company started to produce Piper Aircraft light planes under license. Piper first put together knock-down kits in their US factory for Embraer to assemble and market in Brazil & Latin America. But by 1978 most of the parts and components were being sourced locally.Between 1974 and 2000 nearly 2500 license-built Pipers were produced by Embraer.

Privatization

Born from a Brazilian government plan and having been state-run from the beginning, Embraer began a privatization process alongside many other state-controlled companies during the government of Fernando Henrique Cardoso.

This privatization effort saw Embraer sold on December 7, 1994, and helped it avoid a looming bankruptcy. The company continued to win government contracts.

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

Initial public offerings

In 2000, Embraer made simultaneous initial public offerings on the NYSE and BM&F Bovespa stock exchanges. As of 2008, its NYSE-traded shares were American Depositary Receipts representing 4 BM&F Bovespa shares.

As of 2008 ownership was: Bozano Group 11.10%, Previ (a Brazilian pension fund) 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.

Product line expansion: military, regional & executive

In the mid-1990s the company pursued a product line more focused on small commercial planes than the military aircraft that had previously made up the majority of its manufacturing. Larger regional airliners with 70-110 seats and smaller business jets soon followed.Today the company manufactures for both defense and commerce.

Military transport

On April 19, 2007, Embraer announced it was considering the production of a twin-jet military transport, the Embraer KC-390. Work actually began in May 2009 with funding from the Brazilian Air Force. Correios, the Brazilian postal service, has shown interest in buying this aircraft, in lieu of using commercial freight service for mail transport. Using many of the technologies developed for the Embraer 190, the C-390 would carry up to 23 tons of cargo, and was aimed at replacing Cold War-era cargo aircraft.

While firm orders for this yet-to-be-produced hauler do not exist, Argentina has asked for six examples and several South American nations have also expressed interest.

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 decided Brazil ran an illegal subsidy program, Proex, benefiting its national aviation industry from at least 1999-2000, and that Canada illegally subsidized its indigenous regional airliner industry, comprising Bombardier Aerospace.”

*Information from Forbes.com and Wikipedia.org

**Video published on YouTube by “Embraer

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