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Embraer

Embraer S.A.
Type Sociedade Anônima
Traded as BM&F Bovespa: EMBR3
NYSE: ERJ
Industry Aerospace / Defense
Founded 1969
Headquarters São José dos Campos, Brazil
Key people Hermann Wever, (interim chairman)[1]
Frederico Fleury Curado, (CEO)
Products Aircraft, aircraft components, mission systems for air and ground operation
Revenue US$ 6.0 billion (2012)[2]
Net income US$ 340.6 million (2012)[3]
Employees 18,003[4]
Subsidiaries Neiva
OGMA
ATECH
Orbisat
Website www.embraer.com

Embraer S.A. (Portuguese pronunciation: [ba]) is a Brazilian aerospace conglomerate that produces commercial, military, and executive aircraft[5] and provides aeronautical services.[6][7]

Embraer is a member of the Air Transport Action Group (ATAG). Its CEO, Frederico Curado, is the 2012 recipient of the Tony Jannus Award, given annually for distinguished contributions to commercial aviation.[8]

Contents

History

Seeking a domestic aircraft manufacturer, the Brazilian government made several investments in this area during the 1940s[9][10] and '50s,[9] but it was not until 1969 that Empresa Brasileira de Aeronáutica (Embraer) was created as a government-owned corporation.[7]

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.[11] 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,[citation needed] by 1985 a regional airliner had debuted, the Embraer EMB 120 Brasilia.[12] Aimed at the export market, this plane marked the first of Embraer's highly successful small airliners.[6]

License-built Pipers

In 1974 the company started to produce Piper Aircraft light planes under license.[13] Piper first put together knock-down kits in their US factory for Embraer to assemble and market in Brazil & Latin America.[citation needed] But by 1978 most of the parts and components were being sourced locally.[13] Between 1974 and 2000 nearly 2500 license-built Pipers were produced by Embraer.[13]

Privatization

Born from a Brazilian government plan and having been state-run from the beginning,[9] Embraer began a privatization process[citation needed] alongside many other state-controlled companies during the government of Fernando Henrique Cardoso.[14]

This privatization effort saw Embraer sold on December 7, 1994,[7][15] and helped it avoid a looming bankruptcy.[9] The company continued to win government contracts.[citation needed]

The Brazilian government retains interest through possession of golden shares, which allow it veto power.[16]

Initial public offerings

In 2000, Embraer made simultaneous initial public offerings on the NYSE and BM&F Bovespa stock exchanges.[6] As of 2008, its NYSE-traded shares were American Depositary Receipts representing 4 BM&F Bovespa shares.[17]

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.[18]

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 prior made up the majority of its manufacturing.[9] Larger regional airliners with 70-110 seats and smaller business jets soon followed.[6] Today the company makes for both defense and commerce.[6][7]

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.[19] Correios, the Brazilian postal service, has shown interest in buying this aircraft, in lieu of using commercial freight service for mail transport.[20][21] Using many of the technologies developed for the Embraer 190, the C-390 would carry up to 23 tons of cargo,[22] and was aimed at replacing Cold War-era cargo aircraft.[23]

While firm orders for this yet-to-be-produced hauler do not exist,[19] Argentina has asked for six examples and several South American nations have also expressed interest.[24][25]

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 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.

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.[26][dead link] It may have other production bases as well. The company has offices in Beijing,[27][dead link] Fort Lauderdale (US),[28][dead link] Paris,[29][dead link] Singapore,[30][dead link] and Washington DC (US).[28][dead link]

Non-Brazilian main facilities
  • Embraer Portugal/Europe (Évora, Portugal).
Subsidiaries
  • EAMS - Embraer Aircraft Maintenance Services Inc. (Nashville, Tennessee USA) - 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 US headquarters are near Fort Lauderdale, Florida in a facility founded in 1979. Its external relations office is in Washington, DC.[31]
Joint ventures

Aircraft products

Commercial
Military
Corporate
Agriculture
Utility
Experimental
Future

In October 2010, Embraer suggested plans to develop very-long-range business jets, entering a sector currently dominated by Gulfstream, Bombardier, and Dassault.[32] In May 2011, Embraer announced that it was considering building a larger airliner than the E-jets, with five-abreast seating.[33]

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
Number Of Deliveries 4 32 60 96 160 161 131 101 148 141 130 169 204 244 246[34] 204[35] 205[36]

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

References

  1. ^ "Botelho resigns as chairman of Embraer". Flightglobal. Retrieved 15 January 2012. 
  2. ^ "Embraer on the Forbes Global 2000 List". Forbes.com. Retrieved 2013-03-21. 
  3. ^ name="marketwatch.com"/
  4. ^ Press Room: Embraer in Numbers embraer.com (Official Site)
  5. ^ The Company: Business embraer.com (Official Site)
  6. ^ a b c d e Corporate governance, p. 357 Robert A. G. Monks, Nell Minow. John Wiley and Sons. 2008.
  7. ^ a b c d Timeline Embraer Historical Center (Official site)
  8. ^ Gadsen, Sandra J. (March 15, 2012). "Frederico Curado of Embraer named Jannus Award winner". Tampa Bay Times. Retrieved 2012-03-15. 
  9. ^ a b c d e OECD Territorial Reviews Madrid, Spain. p. 157/264 OECD Publishing. 2007.
  10. ^ Rishikesha T. Krishnan. "Where core competence soars". Businessline. Chennai: October 1, 2003. p. 1
  11. ^ Embraer history Embraer Historical Center (Official site)
  12. ^ The Embraer EMB120 Brasilia airliners.net
  13. ^ a b c Aircraft History: EMB 710 Carioca Embraer History Center
  14. ^ Brazil on Road Peddling State-Owned Enterprises; [FINAL Edition] John Eckhouse, Chronicle Staff Writer. San Francisco Chronicle (pre-1997 Fulltext). San Francisco, Calif.: January 12, 1991. pg. B.1
  15. ^ Scielo: Os efeitos da privatização sobre o desempenho econômico e financeiro das empresas privatizadas (Portuguese)
  16. ^ Corporate governance, pg. 356/651 Robert A. G. Monks, Nell Minow. John Wiley and Sons. 2008.
  17. ^ Corporate governance, p. 358 Robert A. G. Monks, Nell Minow. John Wiley and Sons. 2008.
  18. ^ Corporate governance, p. 359 Robert A. G. Monks, Nell Minow. John Wiley and Sons. 2008.
  19. ^ a b "Portugal interested in Brazilian military cargo plane". BBC Monitoring European, February 1, 2010.
  20. ^ Costa confirma projeto dos Correios com cargueiro C-390. Monitor Mercantil, August 28, 2007. Retrieved on October 15, 2007.
  21. ^ Brazilian postal service may order Embraer C-390 freighters. Flightglobal.com. September 4, 2007. Retrieved on October 15, 2007.
  22. ^ "Embraer Defense Systems". Embraer Defense Systems. Retrieved 2013-03-21. 
  23. ^ EMBRAER HAS MILITARY TRANSPORT AIRCRAFT UNDER STUDY
  24. ^ Argentina to buy 6 military transport jets from Brazil's Embraer; BRAZIL-ARGENTINA/AIRCRAFT EFE News Service. Madrid: October 30, 2010.
  25. ^ "Defense Watch". Defense Daily. Potomac: September 7, 2010. Vol. 247, Iss. 47
  26. ^ The Company: Facilities; Regional Offices: Manufacturing Locations Embraer Official Site
  27. ^ The Company: Facilities; Regional Offices: Embraer - China Embraer Official Site
  28. ^ a b [dead link]The Company: Facilities; Regional Offices: Embraer - North America Embraer Official Site
  29. ^ The Company: Facilities; Regional Offices: Embraer - Europe Embraer Official Site
  30. ^ The Company: Facilities; Regional Offices: Embraer - Singapore Embraer Official Site
  31. ^ "Facilities." Embraer. Retrieved on September 11, 2-12. "Embraer Aircraft Holding, Inc. 276 S.W. 34th Street Fort Lauderdale, FL 33315 U.S.A." and "Embraer Aircraft Holding, Inc. 1700 Pennsylvania Ave. NW Suite 200 U.S.A. Washington, DC 20008"
  32. ^ Embraer mulls over new types flightglobal.com, 21/10/10
  33. ^ "CORRECTION: Embraer eyes possible "five-abreast aircraft"". 2011-05-06. Retrieved 2011-05-08. 
  34. ^ "Embraer Closes Out 2010 With 246 Jets Delivered | PRNewswire". TradersHuddle.com. Retrieved 2013-03-21. 
  35. ^ "EMBRAER DELIVERS 105 COMMERCIAL AND 99 EXECUTIVE JETS IN 2011"
  36. ^ Embraer Delivers 106 Commercial and 99 Executive Jets In 2012.

External links

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Further reading

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Constituents as at 2 March 2010
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