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bkmbr
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Thu Apr 30, 2020 7:35 pm

WayexTDI wrote:
bkmbr wrote:
If Embraer continues to have to compete against an airbus that sells its products below their cost price, it will be impossible for Embraer to close sales and the company as a whole will suffer losses. If Boeing really kills the deal to save billions of dollars , it could end up helping to create a trillion dollars competitor. The last thing Western companies will need is a Chinese company capable of repeating the "Embraer way" of doing things and locking out the Chinese market for their products.

You really think the E2s sold today are sold at prices above today's cost? Riiiiight...


What else can Embraer do, otherwise they can't compete with the A220 since Airbus is continuing the trend set by Bombardier of selling each frame at big loss just to establish the airplane in the market. Is impossible to Embraer keep into a fight like this with Airbus much longer. Airbus have virtually unlimited money since the company can always count with the EU money to help. Boeing and the american government could help to make things a little fairer (from the economic and political point of view) but now the only route Embraer will have to fight this now is the WTO and hope for a decision that will take at least 10/15 years and arrive too late to avoid Airbus dominance in this segment.

EDIT: Unless, of course, if something something like a Max-like scandal happened and hit the A220 line. The A220 has presented some problems and defects such as the problem with engines and cracks in the frame, so you never know what Bombardier did to cut corners in the plane's design to get it in the market as soon as possible. Yes, It is a terrible thing to have to root for the misfortune of others so that you can the things the way you want, but that seems to be the case with Embraer at the moment.
Last edited by bkmbr on Thu Apr 30, 2020 7:56 pm, edited 2 times in total.
 
bkmbr
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Thu Apr 30, 2020 7:47 pm

EMBSPBR wrote:
“For Embraer, I am not at all sure what China would give them, other than money.
What Embraer really needs is critical mass in dealing with the supply chain, helping them to keep costs down relative to Airbus.
China wouldn’t give them that,” adds Richard Aboulafia, Teal Group Aerospace Analyst."


Besides Boeing, how jump out of the ship in the "JV" (aka. acquisition), and Airbus, for obvious reasons, what other company could Embraer team up with that would be supply something like that? In this moment have the Chinese money would not be ideal setup for sure but it would still be more desirable than it has neither the supply chain nor the money. I don't see any other viable partner now a days now that Boeing appears to be out of the game. All other companies in the segment either are already linked to Airbus (like Leonardo and Dassault Aviation) or are too small or too incompatible to make a significant positive impact (from MRJ to Lockheed Martin). Embraer is in a terrible position right now, spent a lot of money preparing for this merge and now is in the way of going down within the next 5 years if the thing don't chance. The Brazilian government can help to keep the company afloat now and for some time but won't be able to do this indefinitely.
 
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Phosphorus
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Thu Apr 30, 2020 7:57 pm

bkmbr wrote:
EMBSPBR wrote:
“For Embraer, I am not at all sure what China would give them, other than money.
What Embraer really needs is critical mass in dealing with the supply chain, helping them to keep costs down relative to Airbus.
China wouldn’t give them that,” adds Richard Aboulafia, Teal Group Aerospace Analyst."


Besides Boeing, how jump out of the ship in the "JV" (aka. acquisition), and Airbus, for obvious reasons, what other company could Embraer team up with that would be supply something like that? In this moment have the Chinese money would not be ideal setup for sure but it would still be more desirable than it has neither the supply chain nor the money. I don't see any other viable partner now a days now that Boeing appears to be out of the game. All other companies in the segment either are already linked to Airbus (like Leonardo and Dassault Aviation) or are too small or too incompatible to make a significant positive impact (from MRJ to Lockheed Martin). Embraer is in a terrible position right now, spent a lot of money preparing for this merge and now is in the way of going down within the next 5 years if the thing don't chance. The Brazilian government can help to keep the company afloat now and for some time but won't be able to do this indefinitely.


Textron is biggish, and builds airplanes (albeit, admittedly, smaller ones) in good quantities. They could provide stewardship to supply chain management and cost control. But would they want the trouble?

Another theoretical candidate with scale and experience could be one of the largest aerostructures suppliers -- like Spirit Aerosystems, or Triumph Group. Again, are they ready to downstream integrate, and graduate into becoming an airframer, becoming a competitor to their customer base?

And yeah, of course the money is the question. Aviation is one of the hardest hit sectors of the economy, worldwide, in this pandemic crisis. Few companies, who have to work for a living in aerospace, have money to spend on someone else's problems at the moment.
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EMBSPBR
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Thu Apr 30, 2020 9:39 pm

Can someone else elaborate for me please: if the Boeing did not want to pay the agreed price, because of Embraer do not worth that anymore, why the chineses should pay ?
 
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scbriml
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Thu Apr 30, 2020 9:42 pm

EMBSPBR wrote:
Can someone else elaborate for me please: if the Boeing did not want to pay the agreed price, because of Embraer do not worth that anymore, why the chineses should pay ?


If China steps in, they won’t be paying anywhere close to what Boeing agreed to pay.
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bkmbr
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Thu Apr 30, 2020 11:32 pm

EMBSPBR wrote:
Can someone else elaborate for me please: if the Boeing did not want to pay the agreed price, because of Embraer do not worth that anymore, why the chineses should pay ?


No one ever said that COMAC would had to pay the agreed price by Boeing. When the "joint venture" was announced the market value of Embraer was aorund 3.7 billion and Boeing agreed to pay 3.8 billion, a very acceptable price, especially if you consider that by the beginning of this year Embraer has valued around 5 billion and if it weren't for the situation with the 737Max and Covid the value could have been even higher than was in January.
Certainly a negotiation with COMAC would be for lower values than previously agreed with Boeing, but it would certainly be above the company's actual market value even why the actual market value of the company is completely unrealistic due to factors beyond Embraer's will. Probably the market value of Embraer will remain low at first, but should bounce back to a higher level soon. As normality returns to the post-covid world, Embraer's market value will rise again, perhaps not as much as it was before, but in the end I'm sure it will be a much lower drop than the drop Boeing will experience.
 
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EMBSPBR
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Thu Apr 30, 2020 11:41 pm

scbriml wrote:
If China steps in, they won’t be paying anywhere close to what Boeing agreed to pay.


Another reason to avoid them.

bkmbr wrote:
No one ever said that COMAC would had to pay the agreed price by Boeing.


Again, another reason to avoid them.
 
bkmbr
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Fri May 01, 2020 12:09 am

EMBSPBR wrote:
scbriml wrote:
If China steps in, they won’t be paying anywhere close to what Boeing agreed to pay.


Another reason to avoid them.

bkmbr wrote:
No one ever said that COMAC would had to pay the agreed price by Boeing.


Again, another reason to avoid them.


Not even Boeing will pay the same amount if for a miracle Embraer and Boeing decide to negotiate again. This kind of thing is inherent in negotiations of this type. If Boeing had agreed to pay 4 billion and if the Embraer market value went up to 6 billion they would continue only paying 4 billion, as well as if the value dropped to 2 billion they would have to pay 4 billion. It is risk of this type of negotiation, even more a negotiation with such a long time frame as long. Boeing's market value now is not even near to the Boeing's market valued before de Max crisis and the Covid, why would Embraer would be?

Now is not the time to negotiate a deal like this, I agree, but eventually some kind of deal will need to be negotiated by Embraer to allow the company to continue to exist like the company it is today, otherwise Embraer will have the same fate as Fokker, go bankrupt, have its assets fragmented into dozens of pieces and sold to a dozen companies that do not know how to operate in the aeronautical market.
 
Jungleneer
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Fri May 01, 2020 12:19 am

Embraer lawyers will be very busy:

Embraer and Boeing's $4.2 billion deal ruled out pandemic as pretext to cancel

https://www.reuters.com/article/us-embr ... SKBN22C3F8
 
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scbriml
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Fri May 01, 2020 7:14 am

EMBSPBR wrote:
scbriml wrote:
If China steps in, they won’t be paying anywhere close to what Boeing agreed to pay.


Another reason to avoid them.


To be clear - nobody will pay the price Boeing somehow agreed to pay for Embraer. Nobody will pay anything close to that. Not China. Not anyone.
Time flies like an arrow. Fruit flies like a banana!
There are 10 types of people in the World - those that understand binary and those that don't.
 
oschkosch
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Fri May 01, 2020 7:26 am

Jungleneer wrote:
Embraer lawyers will be very busy:

Embraer and Boeing's $4.2 billion deal ruled out pandemic as pretext to cancel

https://www.reuters.com/article/us-embr ... SKBN22C3F8



That is just wow! This will be a field day for the lawyers! From the article:


Potential dealbreakers are often described in contracts as material adverse events. But Boeing and Embraer wrote out a laundry list in the contract signed in January 2019, which Reuters reviewed, of 10 conditions that would not qualify as the kind of material adverse events that could be a pretext for cancelling the deal. A pandemic and any changes to the global economy were among them.

On Wednesday, S&P lowered Boeing’s credit rating to just one notch above junk. Meanwhile, the U.S. planemaker announced it would lay off 16,000 people - close to the total number of workers Embraer employs - and that it had already drawn down its entire credit line and was working on a bond offering. “We will be a smaller company for a while,” Boeing Chief Executive David Calhoun said on Wednesday after the planemaker disclosed quarterly results.

However, just days earlier, when Boeing called off its deal with Embraer, the U.S. planemaker did not mention adverse conditions within the company or the economy. Instead, it said its ex partner “failed to satisfy a number of important conditions in the contract.”
:stirthepot: :airplane: "This airplane is designed by clowns, who in turn are supervised by monkeys" :airplane: :stirthepot:
 
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EMBSPBR
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Fri May 01, 2020 1:32 pm

scbriml wrote:
EMBSPBR wrote:
scbriml wrote:
If China steps in, they won’t be paying anywhere close to what Boeing agreed to pay.


Another reason to avoid them.


To be clear - nobody will pay the price Boeing somehow agreed to pay for Embraer. Nobody will pay anything close to that. Not China. Not anyone.


And who said it has to be sold right now ?!?
 
tomcat
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Fri May 01, 2020 1:49 pm

EMBSPBR wrote:
scbriml wrote:
EMBSPBR wrote:

Another reason to avoid them.


To be clear - nobody will pay the price Boeing somehow agreed to pay for Embraer. Nobody will pay anything close to that. Not China. Not anyone.


And who said it has to be sold right now ?!?


So, if doesn't need to be sold right now, why do you seem to be so upset that the Boeing deal has failed? I thought it's because you were concerned for the future of Embraer but it's obviously not the case.

Thinking of possible alternative partners, besides Mitsubishi that I've already mentioned and COMAC, I could imagine the business jets makers - Gulfstream, Cessna, Dassault - to be potential candidates for a partnership or a take-over.
 
Ertro
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Fri May 01, 2020 2:30 pm

EMBSPBR wrote:
And who said it has to be sold right now ?!?


What good is going to come to a company which has no clear direction and a position in a future world at all.

You seem to care a lot about the sale price when from some point of view that is completely irrelevant.
That money is going to the old shareowners who do not matter for the company in the future.
Sure if you are an old shareowner you care a lot but if you are not and you are for example just an engineer in the company you might care more about what kind of prospects and financing the new owner might bring into the company after it has been sold. That is what really matters. And China might be best candidate to finance the company generously after it has been sold to them. Much better than for example Mitsubishi.
 
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EMBSPBR
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Fri May 01, 2020 3:06 pm

tomcat wrote:
So, if doesn't need to be sold right now, why do you seem to be so upset that the Boeing deal has failed?
I thought it's because you were concerned for the future of Embraer but it's obviously not the case.


I think, like others here, you are confused by my "feelings".

Ertro wrote:
You seem to care a lot about the sale price when from some point of view that is completely irrelevant.


One thing was the joint venture and what it represented for Embraer's commercial line and its businesses (read access to
a range of suppliers with lower costs), the prospects for projects to be developed by the company's engineering
in São José dos Campos, and the other JV to market the KC-390 and its possible future versions.
That to speak in a few words.
And, remembering again, that only the Commercial Division of Embraer was under negotiation.

Another thing is to sell without adding anything, just because there is financial demand on behalf of COVID-19.

And, at this moment, the only one who gave his opinion was the vice-president of Brazil, Mr. Hamilton Mourão,
on a possible sale to the chineses.
But it is only his personal opinion. Only that.
And the Brazilian government has only one "golden share" from Embraer, just to prevent company´s actions that
eventually might "offend government interests", to sum up in a nutshell.
All decisions are made by the company's board of directors and regardless of the government's opinion or will.

Ertro wrote:
What good is going to come to a company which has no clear direction and a position in a future world at all.


I believe that many here forget that Embraer is not just their E-Jets from the Commercial Division.

I suggest visiting the company's official website to get an idea of ​​its recents business, including the Defense Division,
which includes the recently signed contract between the Ministry of Defense, Embraer, Thyssenkrupp and Altec, for the construction of two new frigates
for the Brazilian Navy and, of course, other projects such as the Grippen fighters intended for the Brazilian Air Force which will be
assembled in Brazil and will receive "offsets" by SAAB in the long term.
 
https://embraer.com/global/en
 
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scbriml
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Fri May 01, 2020 3:36 pm

EMBSPBR wrote:
scbriml wrote:
EMBSPBR wrote:

Another reason to avoid them.


To be clear - nobody will pay the price Boeing somehow agreed to pay for Embraer. Nobody will pay anything close to that. Not China. Not anyone.


And who said it has to be sold right now ?!?


My bad. Until a week ago that seemed to be the general idea. :confused:

The fact Embraer is pissed at Boeing suggests they were rather keen that it went through. The future's currently looking fairly bleak unless Embraer can find a buyer. And quickly.
Time flies like an arrow. Fruit flies like a banana!
There are 10 types of people in the World - those that understand binary and those that don't.
 
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EMBSPBR
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Fri May 01, 2020 4:10 pm

scbriml wrote:
My bad. Until a week ago that seemed to be the general idea. :confused:
The fact that Embraer is upset with Boeing suggests that they were quite excited about the fact.


It looks like you didn't read what I wrote above ...

scbriml wrote:
The future's currently looking fairly bleak unless Embraer can find a buyer. And quickly.


Again: it looks like you didn't read what I wrote just above

People is looking only at near term here.
EMBRAER does not need a buyer right now.
It needs an investor to keep it in the game.
And this may come through new non-preferred shares, relugated via BNDES-PAR - The National Bank for Economic and Social Development Participations,
which may, at a convenient time after the pandemic, sell them.
This is one of the cards on Embraer's table.
 
WayexTDI
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Fri May 01, 2020 4:24 pm

bkmbr wrote:
WayexTDI wrote:
bkmbr wrote:
If Embraer continues to have to compete against an airbus that sells its products below their cost price, it will be impossible for Embraer to close sales and the company as a whole will suffer losses. If Boeing really kills the deal to save billions of dollars , it could end up helping to create a trillion dollars competitor. The last thing Western companies will need is a Chinese company capable of repeating the "Embraer way" of doing things and locking out the Chinese market for their products.

You really think the E2s sold today are sold at prices above today's cost? Riiiiight...


What else can Embraer do, otherwise they can't compete with the A220 since Airbus is continuing the trend set by Bombardier of selling each frame at big loss just to establish the airplane in the market. Is impossible to Embraer keep into a fight like this with Airbus much longer. Airbus have virtually unlimited money since the company can always count with the EU money to help. Boeing and the american government could help to make things a little fairer (from the economic and political point of view) but now the only route Embraer will have to fight this now is the WTO and hope for a decision that will take at least 10/15 years and arrive too late to avoid Airbus dominance in this segment.

EDIT: Unless, of course, if something something like a Max-like scandal happened and hit the A220 line. The A220 has presented some problems and defects such as the problem with engines and cracks in the frame, so you never know what Bombardier did to cut corners in the plane's design to get it in the market as soon as possible. Yes, It is a terrible thing to have to root for the misfortune of others so that you can the things the way you want, but that seems to be the case with Embraer at the moment.

Pretty much every program is originally sold as a loss; the first frames cost much more to build than further down the line.

But, the myth that Airbus & Bombardier give away willingly the planes while Boeing & Embraer are the good guys and are forced to lower their price is just hard to die.

Having dealt with Embraer, some of their current issues are due to their arrogance in dealing with customers and suppliers; and look at the out-of-scope 175-E2 that they decided to build hoping to force a change in scope.

As an FYI, Bombardier/Airbus did not design the Cseries/A220 engines; and the same series of engines (P&W GTF) is also on the Embraer E2. The PW1500G (A220) and PW1900G (E190/E195-E2) share a lot of the same architecture and size, and might just be a different thrust rating via computer control; so, I'm not sure Embraer should rejoice about their competitor's engine problems...
 
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scbriml
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Fri May 01, 2020 6:56 pm

EMBSPBR wrote:
scbriml wrote:
My bad. Until a week ago that seemed to be the general idea. :confused:
The fact that Embraer is upset with Boeing suggests that they were quite excited about the fact.


It looks like you didn't read what I wrote above ...

scbriml wrote:
The future's currently looking fairly bleak unless Embraer can find a buyer. And quickly.


Again: it looks like you didn't read what I wrote just above

People is looking only at near term here.
EMBRAER does not need a buyer right now.
It needs an investor to keep it in the game.
And this may come through new non-preferred shares, relugated via BNDES-PAR - The National Bank for Economic and Social Development Participations,
which may, at a convenient time after the pandemic, sell them.
This is one of the cards on Embraer's table.


Nope, that doesn’t change anything I wrote. Embraer is in deep doodoo. E2 wasn’t selling before Covid-19. Now their white knight has ridden off into the sunset and taken their money with them.
Time flies like an arrow. Fruit flies like a banana!
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Checklist787
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Fri May 01, 2020 7:56 pm

Jungleneer wrote:
Embraer lawyers will be very busy:

Embraer and Boeing's $4.2 billion deal ruled out pandemic as pretext to cancel

https://www.reuters.com/article/us-embr ... SKBN22C3F8


I do not understand this unfair attitude of systematically asking Boeing for money like it was the IMF.

Damn it !
They need a forced marriage out there ?
"No limit to my poooWer!!!
Do it! "...
 
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EMBSPBR
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Fri May 01, 2020 8:47 pm

scbriml wrote:
Nope, that doesn’t change anything I wrote. Embraer is in deep doodoo. E2 wasn’t selling before Covid-19.


Nope!

Customers expected better prices as soon as Boeing took over. Look behind what happened to Bombardier until the CSeries became A220.

scbriml wrote:
Now their white knight has ridden off into the sunset and taken their money with them.


Nope!

Checklist787 wrote:
I do not understand this unfair attitude of systematically asking Boeing for money like it was the IMF.


And nope!

Just released:

Source:
https://economia.uol.com.br/noticias/re ... ipacao.htm

(Translated from portuguese):

BNDES negotiates financing of up to US $ 1.5 billion for Embraer with banks

Excerpt:

"RIO DE JANEIRO (Reuters)
Embraer may obtain up to US $ 1.5 billion credit from BNDES and commercial banks
for working capital and finane aircraft exports, two government sources close to the talks told Reuters .
"
 
bkmbr
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Fri May 01, 2020 9:06 pm

tomcat wrote:
Thinking of possible alternative partners, besides Mitsubishi that I've already mentioned and COMAC, I could imagine the business jets makers - Gulfstream, Cessna, Dassault - to be potential candidates for a partnership or a take-over.


I believe that you can put Dassault out of this list. About 10 or 15% of Dassault Aviation is owned by Airbus and it would probably be necessary to remove Airbus from its shareholding structure from Dassault in order to obtain regulatory approval from government agencies. For Gulfstream,owned by General Dynamics that which might be a good option if they had cash on hand to do something like that, they would probably have problems to obtain regulatory approval because of the business jet segment just like Cessna. Textron, owner of Cessna, also doesn't seems to be interested in entering general commercial aviation right away, their more commercial planes (like Caravan and now SkyCourier) show that they have a very conservative in this segment and prefer to focus in specific market niches.
 
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EMBSPBR
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Fri May 01, 2020 9:37 pm

bkmbr wrote:
tomcat wrote:
Thinking of possible alternative partners, besides Mitsubishi that I've already mentioned and COMAC, I could imagine the business jets makers - Gulfstream, Cessna, Dassault - to be potential candidates for a partnership or a take-over.


I believe that you can put Dassault out of this list. About 10 or 15% of Dassault Aviation is owned by Airbus and it would probably be necessary to remove Airbus from its shareholding structure from Dassault in order to obtain regulatory approval from government agencies. For Gulfstream,owned by General Dynamics that which might be a good option if they had cash on hand to do something like that, they would probably have problems to obtain regulatory approval because of the business jet segment just like Cessna. Textron, owner of Cessna, also doesn't seems to be interested in entering general commercial aviation right away, their more commercial planes (like Caravan and now SkyCourier) show that they have a very conservative in this segment and prefer to focus in specific market niches.


Give up, fellows ... Embraer has no new partner wanted ou desired any time soon ...

Those are hard and speculative times.
Bad time indeed to make any kind of business.

And again:
Source:
https://economia.uol.com.br/noticias/re ... ipacao.htm

(Translated from portuguese):


BNDES negotiates financing of up to US $ 1.5 billion for Embraer with banks

Excerpt:

"RIO DE JANEIRO (Reuters)
Embraer may obtain up to US $ 1.5 billion credit from BNDES and commercial banks
for working capital and finane aircraft exports, two government sources close to the talks told Reuters ."
 
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scbriml
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Fri May 01, 2020 9:41 pm

EMBSPBR wrote:
Nope!

Customers expected better prices as soon as Boeing took over.


So what are those “customers” going to do now?

E2 has a paltry 45 orders in the last five years (per Wikipedia). Nine orders per year. You can’t pin that on expectations of a Boeing take over.
Time flies like an arrow. Fruit flies like a banana!
There are 10 types of people in the World - those that understand binary and those that don't.
 
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EMBSPBR
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Fri May 01, 2020 9:44 pm

scbriml wrote:
So what are those “customers” going to do now?


You can ask to them or to Mr. John Slattery, Embraer Commercial Airplane CEO !!! ;)
 
bkmbr
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Fri May 01, 2020 9:45 pm

EMBSPBR wrote:
One thing was the joint venture and what it represented for Embraer's commercial line and its businesses (read access to
a range of suppliers with lower costs), the prospects for projects to be developed by the company's engineering
in São José dos Campos, and the other JV to market the KC-390 and its possible future versions.
That to speak in a few words.
And, remembering again, that only the Commercial Division of Embraer was under negotiation.

Another thing is to sell without adding anything, just because there is financial demand on behalf of COVID-19.


We all know that the "joint venture" was an euphemism for straight on acquisition. Airbus bought the C-Series project and Boeing wanted to buy the E-Jet and E2 to compete with them, simple. From a political point of view in Brazil, it would be difficult to justify the sale of Embraer's highly profitable commercial division if the term acquisition was used, so they spoke of a joint venture to facilitate the acceptance of the business by the Brazilian authorities, everything else that Boeing would receive (engineering, support network and maintenance workshops, etc) would be in fact a bonus that Boeing would be earning but in fact did not really needed, but without it it would be politically complicated to speak of a joint venture instead of a simple acquisition of the E-Jet project. So much so that in Boeing Brasil Embraer would in fact be a minority partner and with virtually no directive power over the direction that the new company could take in the future. Airbus had no problem in saying it bought the C-Series because Bombardier was on the verge of bankruptcy (and it just didn't break down thanks to huge subsidies from the Canadian government and Quebec province). What was left of Bombardier was later sold to Mitsubishi, which was more interested in receiving the entire support network that comes since the launch of the CRJ than the actual CRJ project.

EMBSPBR wrote:
And, at this moment, the only one who gave his opinion was the vice-president of Brazil, Mr. Hamilton Mourão,
on a possible sale to the chineses.
But it is only his personal opinion. Only that.
And the Brazilian government has only one "golden share" from Embraer, just to prevent company´s actions that
eventually might "offend government interests", to sum up in a nutshell.
All decisions are made by the company's board of directors and regardless of the government's opinion or will.


No one really knows how the Brazilian politics will be until de end of the year, the current president is in the process of having an impeachment case open against him and his entire support base consists basically of a small portion of the highly ideological part of the population (less then 30% of the population) that believes in all kind of red scare antics from the time of the cold war. The current vice president Mourão has a big chance of taking power soon and has the support of a good part of the military portion of the government that, little by little, seems to be abandoning the current president, and nothing indicates that a future Brazilian government would have a profile as extreme as the current one. The golden share can only be relevant at the time of the future sale, which can happen after the end of the Bolsonaro government.
Furthermore, I do not believe that "government interests" ignore the fact that Embraer alone will hardly survive in the market as it is organized today without the help of someone capable of giving either the Boeing structure or, at least, the Chinese money. I'm talking that Embraer's future will necessarily have to undergo an analysis based on economic realism, not political ideology.

EMBSPBR wrote:
I believe that many here forget that Embraer is not just their E-Jets from the Commercial Division.

I suggest visiting the company's official website to get an idea of ​​its recents business, including the Defense Division,
which includes the recently signed contract between the Ministry of Defense, Embraer, Thyssenkrupp and Altec, for the construction of two new frigates
for the Brazilian Navy and, of course, other projects such as the Grippen fighters intended for the Brazilian Air Force which will be
assembled in Brazil and will receive "offsets" by SAAB in the long term.
 
https://embraer.com/global/en


No one ignores the fact that Embraer is more than the commercial division, but the commercial division is the bread and butter of the company. The Executive Jets and Defense & Security alone will not be able to maintain the company afloat if the Commercial Aviation starts to present consistent losses, just like the transportation division of Bombardier alone could not keep the aviation division going forward indefinitely. In 2019 the commercial and services and support divisions of Embraer (that would be the divisions that would be moved to the new company) represented 60% of the company revenue. Executive Jets represented 26% and Defense & Security 14%. No company in the world survives with only 40% of the company's operations making a profit, ask GE for example.

It would be great if Embraer were able to go head-to-head with Airbus but it’s a rat fighting against a lion, without some significant financial support (as the Chinese could provide) or the weight of Boeing backing Embraer, the company can hardly survive in the long rune, even more if, according to what I read yesterday, that now there is a possibility of Boeing forming a real joint venture with Mitsubishi that would be much cheaper than the acquisition of Embraer's commercial division. If this really happens, Embraer would be kick out of the commercial market as we know for good.
 
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scbriml
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Fri May 01, 2020 9:59 pm

EMBSPBR wrote:
scbriml wrote:
So what are those “customers” going to do now?


You can ask to them or to Mr. John Slattery, Embraer Commercial Airplane CEO !!! ;)


Is he the guy in the Boeing cap? :scratchchin:

E2 sales were completely stalled before Boeing’s failed take over or Covid-19. Cancellations were only eight short of total net sales. Money from the Brazilian government isn’t going to change that, however much you’d wish it to.
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bkmbr
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Fri May 01, 2020 10:09 pm

EMBSPBR wrote:
Give up, fellows ... Embraer has no new partner wanted ou desired any time soon ...


Those are hard and speculative times.
Bad time indeed to make any kind of business.

And again:
Source:
https://economia.uol.com.br/noticias/re ... ipacao.htm

(Translated from portuguese):


BNDES negotiates financing of up to US $ 1.5 billion for Embraer with banks

Excerpt:

"RIO DE JANEIRO (Reuters)
Embraer may obtain up to US $ 1.5 billion credit from BNDES and commercial banks
for working capital and finane aircraft exports, two government sources close to the talks told Reuters ."


Most of us are not discussing if Embraer wants or desires a partner for next week or month, we are discussing that Embraer may have the real need in a not so foreseeable future for a partner to stay in the market competing against Airbus. No company at any time under normal conditions will say that it is desperate for money or partners otherwise it will go bankrupt because those things lowers the company's market value (just look how Boeing's market value plummeted after the first reports of the possibility that it needs the American government bailout to survive). Officially Embraer and it's management team they will always say that they are doing well and that the prospects have never been better, but we know that between what the company, and its board of directors, really thinks and what they disclose to the media there's a lot of diference. This USD 1.5 billion from BNDES will certainly help the company to stay afloat for a while, but the company needs to think with a long-term perspective to not be dependent those crutches because one day this source may dry up for her. Brazil is not the USA or the EU and the country cannot just print money indiscriminately to help the company how it ends up happening with Boeing and Airbus.

Obviously everything discussed here is highly speculative because nobody knows what tomorrow will look like, 1 year ago nobody imagined that Boeing would be in the situation it is in today and 6 months ago nobody even dreamed of the possibility of a global pandemic , but all these things happened and we have no idea what might come tomorrow. If Boeing announces tomorrow that it wants to the negotiating table about the merger with Embraer again or if the A220 is grounded by problems with engine and wing cracks that has appeared in some frames, all of that we are discussing here will change radically.
 
bkmbr
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Fri May 01, 2020 10:10 pm

EMBSPBR wrote:
scbriml wrote:
So what are those “customers” going to do now?


You can ask to them or to Mr. John Slattery, Embraer Commercial Airplane CEO !!! ;)


I bet he wouldn't even be able to answer that question today.
 
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EMBSPBR
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Fri May 01, 2020 10:39 pm

scbriml wrote:
Money from the Brazilian government isn’t going to change that, however much you’d wish it to.


I can take it as personal.

Express your opinion, not mine !
 
bkmbr
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Fri May 01, 2020 10:59 pm

EMBSPBR wrote:
scbriml wrote:
Money from the Brazilian government isn’t going to change that, however much you’d wish it to.


I can take it as personal.

Express your opinion, not mine !


Most of us are discussing about economics of of all that has been happening. This is a matter of business not cheering for your favorite sports team.If you put national pride and ideology above economics while discussing something that are, inherently a business issue don't be surprised that most of the people around don't consider your opinion valid on the long run.
 
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Fri May 01, 2020 11:01 pm

bkmbr wrote:
Most of us are not discussing if Embraer wants or desires a partner for next week or month, we are discussing that Embraer may have the real need in a not so foreseeable future for a partner to stay in the market competing against Airbus.


As long as COVID is haunting the world and there is no predictable cure in the short term, I think that NO business in the world right now is thinking of a "foreseeable future".

Companies in all types of segments not related to drugs or food are shrinking, laying off and seeking funding, mainly from their governments, to stay alive as long as possible and for as long as it lasts.

Here's a good read.
(Yes, there is a short-term "Plan B"):

Source:
https://aviationweek.com/air-transport/ ... -turboprop

Embraer Commercial Eyes Corporate Realignment, Shelves Turboprop
 
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EMBSPBR
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Fri May 01, 2020 11:14 pm

bkmbr wrote:
Most of us are discussing about economics of of all that has been happening.


And I show it in very aspects.

bkmbr wrote:
Don´t you put national pride and ideology above economics while discussing


Never did.

Again, I am showing facts about economics in very aspects.
 
Checklist787
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Sat May 02, 2020 4:33 am

EMBSPBR wrote:
scbriml wrote:
Money from the Brazilian government isn’t going to change that, however much you’d wish it to.


I can take it as personal.

Express your opinion, not mine !


The opinion of many people is that E2's sales are meager.

Don't you recognize that is an embarrassing situation?
"No limit to my poooWer!!!
Do it! "...
 
Sokes
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Sat May 02, 2020 1:11 pm

Jungleneer wrote:
Embraer lawyers will be very busy:

Embraer and Boeing's $4.2 billion deal ruled out pandemic as pretext to cancel

https://www.reuters.com/article/us-embr ... SKBN22C3F8


After how Boeing treated Bombardier, why did the Embraer management discuss with them at all?

Image
source: https://www.azquotes.com/quote/593751

Does this qualify as free speech? Do I denounce Boeing unjustified? I am happy to be corrected and will not reply. So please discuss and don't report.
Why can't the world be a little bit more autistic?
 
bkmbr
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Sun May 03, 2020 1:01 am

Boeing acted just as any company would act in the "corporate america" ideology of business, caring only about the shareholders returns and contract bonuses at the end of each fiscal year. This corporate ideology that prioritizes profits above all else, even from the company's long-term existence is a cancer that affects all companies, specially those traded on the stock market. Boeing was so concerned about making a profit for shareholders that they forgot that they make airplanes first, not dividends. The McDonnell Douglas culture of profit over engineering unfortunately appears to be the golden rule at Boeing and it is very clear. The move from Boeing's HQ from Seattle to Chicago was just the icing on the cake.
 
Checklist787
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Sun May 03, 2020 3:46 am

bkmbr wrote:
Boeing acted just as any company would act in the "corporate america" ideology of business, caring only about the shareholders returns and contract bonuses at the end of each fiscal year. This corporate ideology that prioritizes profits above all else, even from the company's long-term existence is a cancer that affects all companies, specially those traded on the stock market. Boeing was so concerned about making a profit for shareholders that they forgot that they make airplanes first, not dividends.


And

bkmbr wrote:
The McDonnell Douglas culture of profit over engineering unfortunately appears to be the golden rule at Boeing and it is very clear. The move from Boeing's HQ from Seattle to Chicago was just the icing on the cake.


Can not agree more!

Sokes wrote:
Jungleneer wrote:
Embraer lawyers will be very busy:

Embraer and Boeing's $4.2 billion deal ruled out pandemic as pretext to cancel

https://www.reuters.com/article/us-embr ... SKBN22C3F8


After how Boeing treated Bombardier, why did the Embraer management discuss with them at all?

Image
source: https://www.azquotes.com/quote/593751

Does this qualify as free speech? Do I denounce Boeing unjustified? I am happy to be corrected and will not reply. So please discuss and don't report.


It is only a question of point of view.

For me, the "bad person" is ALSO the one who can't sell E2 jets and who wants to force a marriage because it knows ALSO it has difficulties...
"No limit to my poooWer!!!
Do it! "...
 
bkmbr
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Sun May 03, 2020 4:39 am

Checklist787 wrote:
It is only a question of point of view.

For me, the "bad person" is ALSO the one who can't sell E2 jets and who wants to force a marriage because it knows ALSO it has difficulties...


The reason Embraer isn't selling the E2 so well is a lot more complicated that this. Embraer spent a lot of human resources and money getting ready to join Boeing and in some ways it ended up neglecting the search for new sales on the grounds that the weight of the Boeing name would boost sales later just as the Airbus name did with the A220, but everyone knows what happened, Boeing stabbing Embraer in the back.

Embraer made a lot of mistakes in this whole process but at the end of the day it becomes increasingly clear that Boeing is the one to blame and now is trying to evade its responsibility, as it was the typical behavior of all wall street rats that runs Boeing nowadays but firmly believe that they are the new "wolf of wall street".
 
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smithbs
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Thu May 07, 2020 2:01 pm

A good article from Bechai that sums up the situation nicely.

https://seekingalpha.com/article/434344 ... -collapses

There are two things that jump out at me:

First, Boeing intended to buy an 80% stake for $4.2 Billion. Since then, the value of the joint venture slid down, which would make the excess of that $4.2 B a premium for the transaction. The JV may only be worth $660 M now, and so obviously nobody is going to pay $4.2 B for that.

Second, there was an argument for low cost engineering resources in Brazil. However, that is not quantified in the article and my suspicion is that while engineering costs may be lower in Brazil, it might not be by much (and could easily be lost through the usual mismanagement foibles of a merger/jv).

So, taking this article at face value for the financial aspect alone, the break-up seems obvious due the loss in value of the JV.
 
WayexTDI
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Thu May 07, 2020 2:46 pm

bkmbr wrote:
Checklist787 wrote:
It is only a question of point of view.

For me, the "bad person" is ALSO the one who can't sell E2 jets and who wants to force a marriage because it knows ALSO it has difficulties...


The reason Embraer isn't selling the E2 so well is a lot more complicated that this. Embraer spent a lot of human resources and money getting ready to join Boeing and in some ways it ended up neglecting the search for new sales on the grounds that the weight of the Boeing name would boost sales later just as the Airbus name did with the A220, but everyone knows what happened, Boeing stabbing Embraer in the back.

Embraer made a lot of mistakes in this whole process but at the end of the day it becomes increasingly clear that Boeing is the one to blame and now is trying to evade its responsibility, as it was the typical behavior of all wall street rats that runs Boeing nowadays but firmly believe that they are the new "wolf of wall street".

You can't be serious. As much as I enjoy blaming Boeing for a lot of things, the lack of E2 sales is 100% on Embraer.
The Boeing-Embraer JV was more or less initiated in December 2017, a little over 2 years ago; whereas the E2 has been offered for sale since June 2013, so almost 7 years ago.
The E2 sold 193 copies in total (excluding the SkyWest order), including 53 since the JV announcement; 193 sales over 7 years is around 28 (say 30) per year, in line with the sales since the JV announcement (54). So, Embraer did not sell less (or more for that matter) of E2s after they started working hard on the JV.
 
T4thH
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Thu May 07, 2020 2:50 pm

What I really hate regarding this whole story, is, that with end of the joint venture also the discussed turboprop by Embraer Brazil has gone to the maker.
This will now leave the ATR42/72 family globally without a real competitor. The Q400 is now getting really old....and with collapse of several airlines, already more than 100x Q400 are now on the market. So with so many parked mid age Q400s... there will be no demand for new build Q400 in next years. And the Q-family has reached the end of the development-chain....

ATR is an Airbus/Leonardo joint venture, where Airbus has 50 % share. Airbus has already stated, as there is no competitor, there is no need to upgrade the ATR42/72 family (Leonardo is interested in an upgrade and a new development). And yes, why shall Airbus be willed to spend/waste money, when there is no competitor? Why an engine producer (like P&W) shall develop a new engine/engine family, when there is no new plane or an aircraft producer is asking for (P&W has also no competitor in this market with their PW100 family, all other "engine competitors" are for the bin)? The XIANG MA60 family...bad reputation and will be primary sold in China. China has already given dozens of them as gift to other countries in Africa and Pacific region; it was not successful. and else? IL-114? In production and 20 build since 1992...AN-140? 35 build and only one commercial flying....Xian MA600, just 16 build in 10 years...and so on.

In my opinion, it is time and the world needs a 50 to 80 PAX up to date "regular" turboprop plane (with or without hybrid technology). There is the demand for an up to date wing (a full "passive" laminar flow wing; technology will be available for an EIS around 2028 + active laminar flow technology for the tail e.g.) and a new engine generation. But we will not see it...as there is no competitor, so no demand, to develop it.
Last edited by T4thH on Thu May 07, 2020 2:56 pm, edited 1 time in total.
 
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Thu May 07, 2020 2:50 pm

smithbs wrote:
First, Boeing intended to buy an 80% stake for $4.2 Billion. Since then, the value of the joint venture slid down, which would make the excess of that $4.2 B a premium for the transaction. The JV may only be worth $660 M now, and so obviously nobody is going to pay $4.2 B for that.


I would be very surprised if Boeing's lawyers failed to have clauses in the agreement that scaled the price up or down based on the valuation of the JV. Maybe they only expected the value to go one way? :shock:

smithbs wrote:
So, taking this article at face value for the financial aspect alone, the break-up seems obvious due the loss in value of the JV.


But is that covered as a valid reason to bail out within the agreement? Why did Boeing claim that Embraer failed to meet their requirements under the agreement (without specifying in public which requirements weren't met)?

More questions than answers! :D
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EMBSPBR
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Thu May 07, 2020 3:07 pm

smithbs wrote:
https://seekingalpha.com/article/434344 ... -collapses
"there was an argument for low cost engineering resources in Brazil. However, that is not quantified in the article and my suspicion is that while engineering costs may be lower in Brazil, it might not be by much (and could easily be lost through the usual mismanagement foibles of a merger/jv)."


Boeing has more to loose than pay what was previously agreed and that due COVID-19 worth less now.
From the same source, is clear that in long term they will lose more just than the money that could be invest in the JV:

Excerpts:

"So, low-cost engineering is not necessarily a bad thing and if we look at Embraer's expertise,
I do think that you can say that Brasil has a very strong competent engineering core that is relatively cheap for a company like Boeing.
It would have helped Boeing in improving the business cases for new jet developments."


"Boeing would have gotten a peek in the kitchen of how Embraer makes their design decisions with insight in flight-control technology,
aerodynamic technology, landing gear technology, and weight management.
Those are all factors that could help Boeing, even though they have a very capable engineering core themselves."


"On top of the engineering resources and technology, we have the product itself. With a stake in the joint-venture, Boeing would have had a product in the sub-150-seat segment to offer, where it had nothing to offer to customers previously. On top of that, Boeing would also reap the rewards of services contracts for the installed base which fits the company's services strategy. So, the strategic importance of the joint venture is more than clear."

However, from my point of view, it was easier for Boeing to "pull the plug" instead of sitting down and trying to renegotiate the JV in the long term and in better conditions for both them and Embraer.

So, in the post-Covid-19 medium term, Boeing will continue to be the same slow, arrogant and lazy pachyderm that once dominated the industry ...
 
bkmbr
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Thu May 07, 2020 4:03 pm

WayexTDI wrote:
You can't be serious. As much as I enjoy blaming Boeing for a lot of things, the lack of E2 sales is 100% on Embraer.
The Boeing-Embraer JV was more or less initiated in December 2017, a little over 2 years ago; whereas the E2 has been offered for sale since June 2013, so almost 7 years ago.
The E2 sold 193 copies in total (excluding the SkyWest order), including 53 since the JV announcement; 193 sales over 7 years is around 28 (say 30) per year, in line with the sales since the JV announcement (54). So, Embraer did not sell less (or more for that matter) of E2s after they started working hard on the JV.


Just as I said before, Embraer spent a lot of human resources and money getting ready to merge with Boeing and in some ways it ended up neglecting the search for new sales hopping that Boeing would help them boost sales (or at least helping to lobby in favor to the change in the scope clause). I never said that Boeing is sole one responsible for the lackluster performance of the E2 on sales. On the other hand, I am not naive to think that if Embraer had spent the time, money and the human and material resources it used to prepare for the merger promoting the E2, today it would certainly have a larger customer base.
Last edited by bkmbr on Thu May 07, 2020 4:08 pm, edited 1 time in total.
 
bkmbr
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Thu May 07, 2020 4:05 pm

scbriml wrote:
But is that covered as a valid reason to bail out within the agreement? Why did Boeing claim that Embraer failed to meet their requirements under the agreement (without specifying in public which requirements weren't met)?


To avoid the payment of the USD 100 million fine to Embraer.
 
bkmbr
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Thu May 07, 2020 4:14 pm

EMBSPBR wrote:
Boeing has more to loose than pay what was previously agreed and that due COVID-19 worth less now.
From the same source, is clear that in long term they will lose more just than the money that could be invest in the JV:

However, from my point of view, it was easier for Boeing to "pull the plug" instead of sitting down and trying to renegotiate the JV in the long term and in better conditions for both them and Embraer.

So, in the post-Covid-19 medium term, Boeing will continue to be the same slow, arrogant and lazy pachyderm that once dominated the industry ...


I agree that in the end Boeing will have more losses due to the end of Boeing Brasil than Embraer will have. Embraer will be able to reduce its size and restructure itself in order to try in the future something that goes head-to-head with the A220 in a market that has all the prospects of continuing to grow tremendously in the post-covid world, what will Boeing do now? Launch a 737Max6?
 
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Thu May 07, 2020 4:22 pm

bkmbr wrote:
scbriml wrote:
But is that covered as a valid reason to bail out within the agreement? Why did Boeing claim that Embraer failed to meet their requirements under the agreement (without specifying in public which requirements weren't met)?


To avoid the payment of the USD 100 million fine to Embraer.


Possibly, but small beer compared to $4.2 billion!
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Thu May 07, 2020 5:02 pm

bkmbr wrote:
what will Boeing do now? Launch a 737Max6?


757MAX, 767MAX, 737MAX-MAX and, maybe, a 707MAX ... :banghead: :banghead: :banghead:
 
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Fri May 08, 2020 2:06 am

scbriml wrote:
smithbs wrote:
First, Boeing intended to buy an 80% stake for $4.2 Billion. Since then, the value of the joint venture slid down, which would make the excess of that $4.2 B a premium for the transaction. The JV may only be worth $660 M now, and so obviously nobody is going to pay $4.2 B for that.


I would be very surprised if Boeing's lawyers failed to have clauses in the agreement that scaled the price up or down based on the valuation of the JV. Maybe they only expected the value to go one way? :shock:

smithbs wrote:
So, taking this article at face value for the financial aspect alone, the break-up seems obvious due the loss in value of the JV.


But is that covered as a valid reason to bail out within the agreement? Why did Boeing claim that Embraer failed to meet their requirements under the agreement (without specifying in public which requirements weren't met)?

More questions than answers! :D


To paraphrase one of my favorite movies quotes: "Don't worry. The same high caliber team of lawyers that drew up that document will be there to rip it up in court."
 
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Re: Updated: Boeing Terminates Agreement to Establish Joint Ventures with Embraer

Fri May 08, 2020 2:12 am

EMBSPBR wrote:
smithbs wrote:
https://seekingalpha.com/article/434344 ... -collapses
"there was an argument for low cost engineering resources in Brazil. However, that is not quantified in the article and my suspicion is that while engineering costs may be lower in Brazil, it might not be by much (and could easily be lost through the usual mismanagement foibles of a merger/jv)."


Boeing has more to loose than pay what was previously agreed and that due COVID-19 worth less now.
From the same source, is clear that in long term they will lose more just than the money that could be invest in the JV:

Excerpts:

"So, low-cost engineering is not necessarily a bad thing and if we look at Embraer's expertise,
I do think that you can say that Brasil has a very strong competent engineering core that is relatively cheap for a company like Boeing.
It would have helped Boeing in improving the business cases for new jet developments."


"Boeing would have gotten a peek in the kitchen of how Embraer makes their design decisions with insight in flight-control technology,
aerodynamic technology, landing gear technology, and weight management.
Those are all factors that could help Boeing, even though they have a very capable engineering core themselves."


"On top of the engineering resources and technology, we have the product itself. With a stake in the joint-venture, Boeing would have had a product in the sub-150-seat segment to offer, where it had nothing to offer to customers previously. On top of that, Boeing would also reap the rewards of services contracts for the installed base which fits the company's services strategy. So, the strategic importance of the joint venture is more than clear."

However, from my point of view, it was easier for Boeing to "pull the plug" instead of sitting down and trying to renegotiate the JV in the long term and in better conditions for both them and Embraer.

So, in the post-Covid-19 medium term, Boeing will continue to be the same slow, arrogant and lazy pachyderm that once dominated the industry ...


Maybe the points have some validity, but to us spectators they still have not been quantified. Is there really a deal to be had with low cost engineering, or is it mostly illusion? Does Boeing have something to learn from Embraer, or not much worth paying for? I'm not seeing anybody posting numbers, just opinion. The only quantifiable argument is the value of the E2 series, which evidently is worth a fair bit less than $4.2 B.

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