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Stitch
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Re: Boeing has held takeover talks with Embraer: WSJ

Sat Apr 28, 2018 10:01 pm

PPVRA wrote:
Boeing would likely sell more PW 737 if they buy the E2 program. Customers interested in operating a 100-150 seat aircraft and the 737 would likely choose PW for their 737, for commonality sakes.


P&W has not been an option on the 737 since the 737-200. It's been all CFM since the 737-300.
 
PPVRA
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Re: Boeing has held takeover talks with Embraer: WSJ

Sat Apr 28, 2018 10:19 pm

Stitch wrote:
PPVRA wrote:
Boeing would likely sell more PW 737 if they buy the E2 program. Customers interested in operating a 100-150 seat aircraft and the 737 would likely choose PW for their 737, for commonality sakes.


P&W has not been an option on the 737 since the 737-200. It's been all CFM since the 737-300.


My mistake! For some reason I had it in my mind the MAX came with a choice.....
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
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EMBSPBR
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Re: Boeing has held takeover talks with Embraer: WSJ

Sat Apr 28, 2018 10:46 pm

PlanesNTrains wrote:
Additionally, with Boeing's interest in working with EMB, I thought someone would be able to discuss further how their health is and perhaps give some direction on future guidance.


I "imported" this question made by fellow PlainsNTrains from the other tread, post 221:
viewtopic.php?f=3&t=1383899&p=20364943#p20364943

Source: https://www.ainonline.com/aviation-news ... eries-2018

Excerpt:

Embraer Plans for Drop in E-Jet Deliveries in 2018

"Embraer projects it will deliver between 85 and 95 E-Jets this year, down from the 101 it shipped in 2017, due to what Embraer CFO Jose Filippo characterized as typically slower production resulting from the transition to a new aircraft model. Speaking during the company’s fourth quarter 2017 earnings call Thursday, Filippo reported that Embraer expects lower delivery totals this year and in 2019, followed by a return to historical trends once it executes gradual acceleration of E2 production."

And as a result ...

Source: https://www.ainonline.com/aviation-news ... st-quarter

Embraer Aircraft Deliveries Slump in First Quarter

Excerpt:

"Brazilian airframer Embraer delivered 25 aircraft in the first quarter—14 commercial airliners and 11 executive jets. These figures represent a 24.2 percent drop compared with the 33 aircraft (18 commercial jets and 15 executive jets) delivered in the same period last year. First-quarter 2017 deliveries were also down 25 percent from the 44 aircraft Embraer delivered in the first three months of 2016."

and ...

Source: https://www.flightglobal.com/news/artic ... mi-448128/

"Embraer Q1 operating profit down a third to $26.4 million"

"Revenue fell 4.8% to $992 million in the period, says the manufacturer."

"HIgher financial expenses contributed in pushing Embraer to a net loss of $12.3 million in the first quarter, compared with a net profit of $53.2 million in the corresponding period in 2017."

"Financial expenses rose to $44.9 million in the period, up from $4.7 million a year ago."
 
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EMBSPBR
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Re: Boeing has held takeover talks with Embraer: WSJ

Tue May 15, 2018 9:37 pm

Interesting point of view:

Source: https://jonostrower.com/category/industry-strategy/

"What Boeing wants in Embraer also makes merging with it extremely difficult"

"As Boeing digs into understanding what makes Embraer tick,
they're finding that its structure (by design) makes it inherently difficult to pull apart."


Excerpts:

"At a strategic level, Embraer has a young and deeply experienced engineering workforce. (The E2’s program director is just 42 and a mentee of its strategy chief)."

"Its supply chain is a laundry-list of the same global players as its rivals, but its structure significantly more integrated.
It’s the type of architecture that keeps cost down, knowledge shared and an organization stable; ideal for the process-driven mature environment of commercial aerospace."

"By contrast, Airbus’s own experience extracting the CSeries program from Bombardier has gone far smoother.
But the CSeries was an island of development inside of Bombardier.
And the Canadian company’s distinctly less-integrated corporate structure is what also makes it so much easier to part out."


And ...

"The question for Boeing as they force a dis-integration of Embraer really focuses on whether they can split the Brazilian aircraft manufacturer without losing what made them want to join forces in the first place."
 
Nean1
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Re: Boeing has held takeover talks with Embraer: WSJ

Tue May 15, 2018 11:36 pm

EMBSPBR wrote:
Interesting point of view:

Source: https://jonostrower.com/category/industry-strategy/

"What Boeing wants in Embraer also makes merging with it extremely difficult"

"As Boeing digs into understanding what makes Embraer tick,
they're finding that its structure (by design) makes it inherently difficult to pull apart."


Excerpts:

"At a strategic level, Embraer has a young and deeply experienced engineering workforce. (The E2’s program director is just 42 and a mentee of its strategy chief)."

"Its supply chain is a laundry-list of the same global players as its rivals, but its structure significantly more integrated.
It’s the type of architecture that keeps cost down, knowledge shared and an organization stable; ideal for the process-driven mature environment of commercial aerospace."

"By contrast, Airbus’s own experience extracting the CSeries program from Bombardier has gone far smoother.
But the CSeries was an island of development inside of Bombardier.
And the Canadian company’s distinctly less-integrated corporate structure is what also makes it so much easier to part out."


And ...

"The question for Boeing as they force a dis-integration of Embraer really focuses on whether they can split the Brazilian aircraft manufacturer without losing what made them want to join forces in the first place."


EMBSPBR,

The only sensible route would be for Boeing to have a minority shareholding but be influential on critical aspects such as the commercial airline product line, third-party partnerships and joint developments. On the other hand Boeing is obsessed by control. I can not see how this can work. I fear that in the end the agreement will be a great disappointment for both parties.
 
frmrCapCadet
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Re: Boeing has held takeover talks with Embraer: WSJ

Wed May 16, 2018 1:37 am

Given the sales over the last year for the C series we are not exactly seeing a booming niche. And many of us hoped to see lots of sales, and maybe more rural-ish areas served.
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kevin5345179
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Re: Boeing has held takeover talks with Embraer: WSJ

Wed May 16, 2018 2:10 am

frmrCapCadet wrote:
Given the sales over the last year for the C series we are not exactly seeing a booming niche. And many of us hoped to see lots of sales, and maybe more rural-ish areas served.


the deal is yet to be closed ..... so technically the effect of merger hasn't been out yet
 
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EMBSPBR
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Re: Boeing has held takeover talks with Embraer: WSJ

Wed May 16, 2018 2:49 am

kevin5345179 wrote:
frmrCapCadet wrote:
Given the sales over the last year for the C series we are not exactly seeing a booming niche. And many of us hoped to see lots of sales, and maybe more rural-ish areas served.


the deal is yet to be closed ..... so technically the effect of merger hasn't been out yet


Do not be deceived.
The 100 to 150 seat segment is a modest niche compared to what comes above it.
Neither E2 nor CS will be stellar sellers.
 
rbavfan
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Re: Boeing has held takeover talks with Embraer: WSJ

Wed May 16, 2018 6:28 am

william wrote:
Amiga500 wrote:
Looks like tacit admission that they got it extremely wrong in not taking on the CSeries.


What many forget Boeing passed on the CS deal that was offered to Airbus. The Embraer product as it stands sells pretty good on its on and doesn't need "marketing help" (because the world airlines are clueless that BBD has this CS product). I do agree this is a defensive move, to allow Boieng to compete on in the lower segments. What Embraer gets out of this I do no know.


World airlines are not clueless about the CS series. Every airline operating keeps track of frames being developed. Even one that never make it out the door. Airlines execs are not that stupid!
 
Waterbomber
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Re: Boeing has held takeover talks with Embraer: WSJ

Wed May 16, 2018 6:59 am

By the sounds of it, it looks like the deal is off.
Boeing is probably having second thoughts now that Embraer and Brazil has allowed to drag this too long.
Boeing can better invest that money in a ramp up of the MAX. More money to be made, less headaches and the MAX 7 can win campaigns against the CS300.
 
Flyglobal
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Re: Boeing has held takeover talks with Embraer: WSJ

Wed May 16, 2018 7:19 am

Nice Approach at Embraer. I share the opinion that it will be a culture shock because the average Embraer engineer, at home a regional hero now will be dominated by a US Company aiming at command and control.

Basically the Embraer Team would be mentally closer to a culture at Airbus then at Boeing, but that is not on the table and independency probably is not on the table.
Not sure if Boeing Team can me smart enough to win trust and especially harts instead of just crunching numbers and nice PPT slides.
They may need special efforts to have teams allow it and get a structure where the one or other(ex) Embraer employee also leads a Boeing department in some fields.

The new Embraer-Boeing team should get a lead in the NSA development with a long line to Boeing which should avoid micro controlling.

If something like this is not visible for Embraer engineers probably talents may not want to go into the new JV in fear of too much Boeing control.


Flyglobal
 
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keesje
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Re: Boeing has held takeover talks with Embraer: WSJ

Wed May 16, 2018 7:52 am

We are seeing lots of big and huge mergers, take-overs. It's an art to make sure everybody remains happy, motivated sees new chances & the best guys don't jump ship within a year, their loyalty being exhausted. I've seen excellent companies simply vanish after take-overs, with an order-book and production remaining. A destruction of capital and employment. And they were real good companies, that's why they were bought for a lot of money in the first place.
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Waterbomber
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Re: Boeing has held takeover talks with Embraer: WSJ

Wed May 16, 2018 8:41 am

Keesje, Flyglobal, I doubt that that is the underlying spirit of the Jon Ostrower blog post. Boeing doesnt need any of the so called Embraer engineering talent. If that's what they want, they can post job ads and open a local engineering center, pay them a much higher salary than Embraer and call it a day.
Boeing wanted the Ejets, but only if they could get them cheaply and in a similar deal as BBD and Airbus. Turns out that the Brazilians played hard to get and now Boeing is saying that Embraer performs best in its current form and that absorbing it can only make it worse.
In other words, it looks like Boeing is walking away politely.
 
Flyglobal
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Re: Boeing has held takeover talks with Embraer: WSJ

Wed May 16, 2018 12:46 pm

Waterbomber wrote:
Keesje, Flyglobal, I doubt that that is the underlying spirit of the Jon Ostrower blog post. Boeing doesnt need any of the so called Embraer engineering talent. If that's what they want, they can post job ads and open a local engineering center, pay them a much higher salary than Embraer and call it a day.
Boeing wanted the Ejets, but only if they could get them cheaply and in a similar deal as BBD and Airbus. Turns out that the Brazilians played hard to get and now Boeing is saying that Embraer performs best in its current form and that absorbing it can only make it worse.
In other words, it looks like Boeing is walking away politely.


I don't necessarily disagree. It’s another read of it. I was on the assumption that they want the deal also to have a low cost Engineering base to design the NSA cheaply. But that is only one possibility of other Options.

Flyglobal
 
WaywardMemphian
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Re: Boeing has held takeover talks with Embraer: WSJ

Wed May 16, 2018 1:41 pm

Boeing coulda got the C-series for a song, oops.
 
PPVRA
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Re: Boeing has held takeover talks with Embraer: WSJ

Wed May 16, 2018 4:46 pm

EMBSPBR wrote:
Interesting point of view:

Source: https://jonostrower.com/category/industry-strategy/

"What Boeing wants in Embraer also makes merging with it extremely difficult"

"As Boeing digs into understanding what makes Embraer tick,
they're finding that its structure (by design) makes it inherently difficult to pull apart."


Excerpts:

"At a strategic level, Embraer has a young and deeply experienced engineering workforce. (The E2’s program director is just 42 and a mentee of its strategy chief)."

"Its supply chain is a laundry-list of the same global players as its rivals, but its structure significantly more integrated.
It’s the type of architecture that keeps cost down, knowledge shared and an organization stable; ideal for the process-driven mature environment of commercial aerospace."

"By contrast, Airbus’s own experience extracting the CSeries program from Bombardier has gone far smoother.
But the CSeries was an island of development inside of Bombardier.
And the Canadian company’s distinctly less-integrated corporate structure is what also makes it so much easier to part out."


And ...

"The question for Boeing as they force a dis-integration of Embraer really focuses on whether they can split the Brazilian aircraft manufacturer without losing what made them want to join forces in the first place."


My understanding is that Airbus did not buy BBD's entire commercial aviation division. They only bought a share in the control and profits of the C Series program.

Nothing to be divvied up makes the whole process a lot simpler. It's not too different to buying stocks, no huge surgery is required.

Apples to oranges.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
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EMBSPBR
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Re: Boeing has held takeover talks with Embraer: WSJ

Wed May 16, 2018 9:57 pm

PPVRA wrote:
EMBSPBR wrote:
Interesting point of view:

Source: https://jonostrower.com/category/industry-strategy/

"What Boeing wants in Embraer also makes merging with it extremely difficult"

"As Boeing digs into understanding what makes Embraer tick,
they're finding that its structure (by design) makes it inherently difficult to pull apart."


Excerpts:

"At a strategic level, Embraer has a young and deeply experienced engineering workforce. (The E2’s program director is just 42 and a mentee of its strategy chief)."

"Its supply chain is a laundry-list of the same global players as its rivals, but its structure significantly more integrated.
It’s the type of architecture that keeps cost down, knowledge shared and an organization stable; ideal for the process-driven mature environment of commercial aerospace."

"By contrast, Airbus’s own experience extracting the CSeries program from Bombardier has gone far smoother.
But the CSeries was an island of development inside of Bombardier.
And the Canadian company’s distinctly less-integrated corporate structure is what also makes it so much easier to part out."


And ...

"The question for Boeing as they force a dis-integration of Embraer really focuses on whether they can split the Brazilian aircraft manufacturer without losing what made them want to join forces in the first place."


My understanding is that Airbus did not buy BBD's entire commercial aviation division. They only bought a share in the control and profits of the C Series program.

Nothing to be divvied up makes the whole process a lot simpler. It's not too different to buying stocks, no huge surgery is required.

Apples to oranges.


I'm sorry but your comment struck me as dubious or ambiguous.

It is necessary to read the full text of the articulator to understand his opinion.

While the CSeries program is being "pulled" from inside Bombardier by Airbus, Embraer's commercial division is intertwined with other executive and defense programs inside one work structure.

I think it's more than simply buying stocks.

And that is exactly where the articulator touches ...
 
PPVRA
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Re: Boeing has held takeover talks with Embraer: WSJ

Thu May 17, 2018 2:28 am

EMBSPBR wrote:
PPVRA wrote:
EMBSPBR wrote:
Interesting point of view:

Source: https://jonostrower.com/category/industry-strategy/

"What Boeing wants in Embraer also makes merging with it extremely difficult"

"As Boeing digs into understanding what makes Embraer tick,
they're finding that its structure (by design) makes it inherently difficult to pull apart."


Excerpts:

"At a strategic level, Embraer has a young and deeply experienced engineering workforce. (The E2’s program director is just 42 and a mentee of its strategy chief)."

"Its supply chain is a laundry-list of the same global players as its rivals, but its structure significantly more integrated.
It’s the type of architecture that keeps cost down, knowledge shared and an organization stable; ideal for the process-driven mature environment of commercial aerospace."

"By contrast, Airbus’s own experience extracting the CSeries program from Bombardier has gone far smoother.
But the CSeries was an island of development inside of Bombardier.
And the Canadian company’s distinctly less-integrated corporate structure is what also makes it so much easier to part out."


And ...

"The question for Boeing as they force a dis-integration of Embraer really focuses on whether they can split the Brazilian aircraft manufacturer without losing what made them want to join forces in the first place."


My understanding is that Airbus did not buy BBD's entire commercial aviation division. They only bought a share in the control and profits of the C Series program.

Nothing to be divvied up makes the whole process a lot simpler. It's not too different to buying stocks, no huge surgery is required.

Apples to oranges.


I'm sorry but your comment struck me as dubious or ambiguous.

It is necessary to read the full text of the articulator to understand his opinion.

While the CSeries program is being "pulled" from inside Bombardier by Airbus, Embraer's commercial division is intertwined with other executive and defense programs inside one work structure.

I think it's more than simply buying stocks.

And that is exactly where the articulator touches ...


My understanding is that Airbus is not getting any engineering resources from BBD. Rather, they’re just getting “rights” to control the program and sell the aircraft.

I may be wrong, but that has been my impression.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
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YuriMG2
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Re: Boeing has held takeover talks with Embraer: WSJ

Thu May 17, 2018 7:09 am

Embraer president said this week the deal will happen before de Brazilian election: October this years
 
bob75013
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Re: Boeing has held takeover talks with Embraer: WSJ

Tue Jul 03, 2018 6:53 pm

"SAO PAULO (Reuters) - Planemakers Boeing Co <BA.N> and Embraer SA <EMBR3.SA> have prepared contracts of their proposed tie-up and are expected to submit them to the Brazilian government within two weeks, Brazilian newspaper Valor Economico reported on its website Monday."

https://finance.yahoo.com/news/boeing-e ... nance.html
 
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LockheedBBD
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Re: Boeing has held takeover talks with Embraer: WSJ

Thu Jul 05, 2018 3:04 am

I wonder if they'll make the official announcement of the deal at Farborough? They'll be able to take some attention away from Airbus and the CSeries. The timing would be good to attract the interest of potential customers who were waiting to see a deal with Boeing before moving ahead with further negotiations.
 
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ikolkyo
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Re: Boeing has held takeover talks with Embraer: WSJ

Thu Jul 05, 2018 5:26 am

Looks like things are starting get moving.

Embraer and Boeing ready to unveil commercial joint venture
https://t.co/umA02wGrlE
 
Varsity1
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Re: Boeing has held takeover talks with Embraer: WSJ

Thu Jul 05, 2018 5:50 am

This will bring Boeing back into the bizjet market and Embraer further into the .mil market.

I would have rather seen Northrop/Lockheed partner with Embraer. It would have created another well capitalized civil av group.
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Flyglobal
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Re: Boeing has held takeover talks with Embraer: WSJ

Thu Jul 05, 2018 6:31 am

Varsity1 wrote:
This will bring Boeing back into the bizjet market and Embraer further into the .mil market.

I would have rather seen Northrop/Lockheed partner with Embraer. It would have created another well capitalized civil av group.


As the article says: the Business Jet market is excluded from the deal.

Flyglobal
 
queb
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Re: Boeing has held takeover talks with Embraer: WSJ

Thu Jul 05, 2018 6:40 am

Flyglobal wrote:
Varsity1 wrote:
This will bring Boeing back into the bizjet market and Embraer further into the .mil market.

I would have rather seen Northrop/Lockheed partner with Embraer. It would have created another well capitalized civil av group.


As the article says: the Business Jet market is excluded from the deal.

Flyglobal


Smaller E-jet too, I think only E190/E195 E2 will be in the deal.
 
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reidar76
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Re: Boeing has held takeover talks with Embraer: WSJ

Thu Jul 05, 2018 7:00 am

queb wrote:
Flyglobal wrote:
Varsity1 wrote:
This will bring Boeing back into the bizjet market and Embraer further into the .mil market.

I would have rather seen Northrop/Lockheed partner with Embraer. It would have created another well capitalized civil av group.


As the article says: the Business Jet market is excluded from the deal.

Flyglobal


Smaller E-jet too, I think only E190/E195 E2 will be in the deal.


Yes, it is likely the deal is all about the E2. I wonder if the deal includes work (design and/or FAL) for the NMA/MOM. That will be interesting.

@Varsity1: Leeham reports that military is also excluded from the deal.
 
Flyglobal
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Re: Boeing has held takeover talks with Embraer: WSJ

Thu Jul 05, 2018 7:21 am

Reading what is included and what is excluded: Basically Boeing buys the E2 (190/195) Project - rather similar to Airbus buying just the CS program.
With regard to Engineering ressources: I could assume that not many Embraer engineers may want to move to the new JV. To much the engineers may fear that the Embrear Team Spirit will Change.

Flyglobal
 
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scbriml
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Re: Boeing has held takeover talks with Embraer: WSJ

Thu Jul 05, 2018 7:28 am

Varsity1 wrote:
This will bring Boeing back into the bizjet market and Embraer further into the .mil market.


Did you read the article? :confused:
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Amiga500
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Re: Boeing has held takeover talks with Embraer: WSJ

Thu Jul 05, 2018 10:14 am

That article is a bit nebulous!

While the final shape of the deal, however, is not known to The Air Current, Embraer’s business jet unit will not be included along with its commercial regional and small single-aisle E-Jets, according to one of the people.


Does "along with" here mean that the the regional and small E-jets are not part of the deal? [So really, its almost KC-390 only.]

Or does it mean they are part of the deal and the biz-jets aren't included.

I guess we'll find out in due course.
 
bigjku
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Re: Boeing has held takeover talks with Embraer: WSJ

Thu Jul 05, 2018 10:29 am

Amiga500 wrote:
That article is a bit nebulous!

While the final shape of the deal, however, is not known to The Air Current, Embraer’s business jet unit will not be included along with its commercial regional and small single-aisle E-Jets, according to one of the people.


Does "along with" here mean that the the regional and small E-jets are not part of the deal? [So really, its almost KC-390 only.]

Or does it mean they are part of the deal and the biz-jets aren't included.

I guess we'll find out in due course.


My reading, and that’s all it is, is that commercial regional and all the E-Jets are part of the deal.

What I am curious about is how much Boeing cares about those as compared to the engineering talent I believe they were really after. Should be interesting.
 
seansasLCY
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Re: Boeing has held takeover talks with Embraer: WSJ

Thu Jul 05, 2018 11:46 am

http://boeing.mediaroom.com/2018-07-05- ... 93160630=1

"Boeing (NYSE: BA) and Embraer (B3: EMBR3, NYSE: ERJ) announced they have signed a Memorandum of Understanding to establish a strategic partnership that positions both companies to accelerate growth in global aerospace markets"
 
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EMBSPBR
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Re: Boeing has held takeover talks with Embraer: WSJ

Thu Jul 05, 2018 12:05 pm

The agreement is for all commerial division (E170/175/190/195/175-E2/190-E2/195-E2).

Official sources:

Boeing
: http://boeing.mediaroom.com/2018-07-05- ... 93160630=1

Embraer
: https://embraer.com/global/en/news#/120 ... ace-growth
Excerpts:

"The non-binding agreement proposes the formation of a joint venture comprising the commercial aircraft and services business of Embraer that would strategically align with Boeing's commercial development, production, marketing and lifecycle services operations. Under the terms of the agreement, Boeing will hold an 80 percent ownership stake in the joint venture and Embraer will own the remaining 20 percent stake."

"The transaction values 100 percent of Embraer's commercial aircraft operations at $4.75 billion, and contemplates a value of $3.8 billion for Boeing's 80 percent ownership stake in the joint venture. The proposed partnership is expected to be accretive to Boeing's earnings per share beginning in 2020 and to generate estimated annual pre-tax cost synergies of approximately $150 million by year three."

And:

"In addition, both companies will create another joint venture to promote and develop new markets and applications for defense products and services, especially the KC-390 multi-mission aircraft, based on jointly-identified opportunities.

"Joint investments in the global marketing of the KC-390, as well as a series of specific agreements in the fields of engineering, research and development and the supply chain, will enhance mutual benefits and further enhance the competitiveness of Boeing and Embraer," said Nelson Salgado, Embraer's Executive Vice President, Financial and Investor Relations."
 
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Momo1435
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Re: Boeing has held takeover talks with Embraer: WSJ

Thu Jul 05, 2018 12:08 pm

A couple of important quotes from the press release.

"The non-binding agreement proposes the formation of a joint venture comprising the commercial aircraft and services business of Embraer that would strategically align with Boeing's commercial development, production, marketing and lifecycle services operations. Under the terms of the agreement, Boeing will hold an 80 percent ownership stake in the joint venture and Embraer will own the remaining 20 percent stake."

"On finalization, the commercial aviation joint venture will be led by Brazil-based management, including a President and Chief Executive Officer. Boeing will have operational and management control of the new company, which will report directly to Muilenburg."

"In addition, both companies will create another joint venture to promote and develop new markets and applications for defense products and services, especially the KC-390 multi-mission aircraft, based on jointly-identified opportunities."



So the joint venture will be for the full commercial portfolio = all versions of the E-Jet. There will also be a 2nd joint venture for the KC-390, so the military part will not stay fully independent.
 
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LoganTheBogan
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Re: Boeing has held takeover talks with Embraer: WSJ

Thu Jul 05, 2018 12:10 pm

Some articles are also stating that with the upcoming election and with civilians protesting about losing their Brazilian crown jewel, Boeing may still find it an uphill challenge.
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bigjku
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Re: Boeing has held takeover talks with Embraer: WSJ

Thu Jul 05, 2018 12:17 pm

LoganTheBogan wrote:
Some articles are also stating that with the upcoming election and with civilians protesting about losing their Brazilian crown jewel, Boeing may still find it an uphill challenge.


Embraer is in a similar position to Bombardier. If they don’t join up they are likely to be sunk or at the very least badly hurt by the pressure of thus far failing new generation aircraft programs.

I don’t see a crown jewel to keep independent frankly. I see something that relatively soon would be a ward of the state. Backlogs were getting very low.
 
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EMBSPBR
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Re: Boeing has held takeover talks with Embraer: WSJ

Thu Jul 05, 2018 12:26 pm

bigjku wrote:
Embraer is in a similar position to Bombardier.


Maybe a little bit different ...

Embraer: "The transaction values 100 percent of Embraer’s commercial aircraft operations at $4.75 billion, and contemplates a value of $3.8 billion for Boeing’s 80 percent ownership stake in the joint venture."

Bombardier and the CSeries: 31% on CSALP and US$ 1,00 contemplated by Airbus ...
 
bigjku
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Re: Boeing has held takeover talks with Embraer: WSJ

Thu Jul 05, 2018 1:02 pm

EMBSPBR wrote:
bigjku wrote:
Embraer is in a similar position to Bombardier.


Maybe a little bit different ...

Embraer: "The transaction values 100 percent of Embraer’s commercial aircraft operations at $4.75 billion, and contemplates a value of $3.8 billion for Boeing’s 80 percent ownership stake in the joint venture."

Bombardier and the CSeries: 31% on CSALP and US$ 1,00 contemplated by Airbus ...


I think the majority of that difference in price would be that’s boeing is acquiring considerable engineering resources it attaches a value to. As well as some ongoing service revenue. No one will likely release a breakdown of how they valued the company but I think most of the value to Boeing is in those two areas right now.
 
brindabella
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Re: Boeing has held takeover talks with Embraer: WSJ

Thu Jul 05, 2018 1:13 pm

EMBSPBR wrote:
bigjku wrote:
Embraer is in a similar position to Bombardier.


Maybe a little bit different ...

Embraer: "The transaction values 100 percent of Embraer’s commercial aircraft operations at $4.75 billion, and contemplates a value of $3.8 billion for Boeing’s 80 percent ownership stake in the joint venture."

Bombardier and the CSeries: 31% on CSALP and US$ 1,00 contemplated by Airbus ...


From what I have read here:

* E2 models coming out notably better than spec,
* production line doing both E1 & E2.
* but concurrently automating production and redeploying staff, and
* doing their own FBW, and also
* doing their own LG design/production;

Sounds to me like Boeing will deeply value the Joint venture.

To Embraer: Congratulations!

Recognition for a great company.

:yes: :checkmark:

cheers

(But nothing is ever perfect - is it unseemly to speculate that some various parts of the Boeing empire will not be as stoked as Muilenberg is to acquire such a diverse range of high skills? :stirthepot: :D )
Billy
 
bigjku
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Re: Boeing has held takeover talks with Embraer: WSJ

Thu Jul 05, 2018 1:45 pm

brindabella wrote:
EMBSPBR wrote:
bigjku wrote:
Embraer is in a similar position to Bombardier.


Maybe a little bit different ...

Embraer: "The transaction values 100 percent of Embraer’s commercial aircraft operations at $4.75 billion, and contemplates a value of $3.8 billion for Boeing’s 80 percent ownership stake in the joint venture."

Bombardier and the CSeries: 31% on CSALP and US$ 1,00 contemplated by Airbus ...


From what I have read here:

* E2 models coming out notably better than spec,
* production line doing both E1 & E2.
* but concurrently automating production and redeploying staff, and
* doing their own FBW, and also
* doing their own LG design/production;

Sounds to me like Boeing will deeply value the Joint venture.

To Embraer: Congratulations!

Recognition for a great company.

:yes: :checkmark:

cheers

(But nothing is ever perfect - is it unseemly to speculate that some various parts of the Boeing empire will not be as stoked as Muilenberg is to acquire such a diverse range of high skills? :stirthepot: :D )


From the people I know at Boeing most understand the purpose of this is to expand their services business and to allow faster development cycles on things moving forward. They seem pretty content with it so far.

I expect it to be involved in the engineering of NMA and variants to come on that right from the start. I think there are big plans with avionics as well.
 
brindabella
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Re: Boeing has held takeover talks with Embraer: WSJ

Thu Jul 05, 2018 2:02 pm

bigjku wrote:
brindabella wrote:
EMBSPBR wrote:

Maybe a little bit different ...

Embraer: "The transaction values 100 percent of Embraer’s commercial aircraft operations at $4.75 billion, and contemplates a value of $3.8 billion for Boeing’s 80 percent ownership stake in the joint venture."

Bombardier and the CSeries: 31% on CSALP and US$ 1,00 contemplated by Airbus ...


From what I have read here:

* E2 models coming out notably better than spec,
* production line doing both E1 & E2.
* but concurrently automating production and redeploying staff, and
* doing their own FBW, and also
* doing their own LG design/production;

Sounds to me like Boeing will deeply value the Joint venture.

To Embraer: Congratulations!

Recognition for a great company.

:yes: :checkmark:

cheers

(But nothing is ever perfect - is it unseemly to speculate that some various parts of the Boeing empire will not be as stoked as Muilenberg is to acquire such a diverse range of high skills? :stirthepot: :D )


From the people I know at Boeing most understand the purpose of this is to expand their services business and to allow faster development cycles on things moving forward. They seem pretty content with it so far.

I expect it to be involved in the engineering of NMA and variants to come on that right from the start. I think there are big plans with avionics as well.


Just stirring, 8-)

However I meant the "Congrats" quite seriously.

A heap of excellent skills to be welcomed ito the JV and utilised to the max for both parent enterprises.

Well beyond the Boeing Global Services enhancement, I would think,

cheers
Billy
 
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lightsaber
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Re: Boeing has held takeover talks with Embraer: WSJ

Thu Jul 05, 2018 2:02 pm

EMBSPBR wrote:
bigjku wrote:
Embraer is in a similar position to Bombardier.


Maybe a little bit different ...

Embraer: "The transaction values 100 percent of Embraer’s commercial aircraft operations at $4.75 billion, and contemplates a value of $3.8 billion for Boeing’s 80 percent ownership stake in the joint venture."

Bombardier and the CSeries: 31% on CSALP and US$ 1,00 contemplated by Airbus ...

Bombardier was bankrupt. They keep what, a third of the C-series for Airbus marketing, support, supply chain, and $300 million of investment.

Embraer has a good product. They just haven't sold. Getting into the Boeing warehouses alone is worth a fortune in support.

From myself, I only questioned economies of scale, support, and financing. Boeing moving forward aswages most of the concerns.

Now for sales. At this time, after discounting the E2-175 (which cannot be operated by the sole buyer), the 717 has outsold the E2. Is a non-binding LOI enough to sell more?

http://m.atwonline.com/manufacturers/bo ... mercial-jv


Airbus has teased a sale will be announced at Farnborough.

Lightsaber
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DfwRevolution
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Re: Boeing has held takeover talks with Embraer: WSJ

Thu Jul 05, 2018 2:07 pm

bigjku wrote:
EMBSPBR wrote:
bigjku wrote:
Embraer is in a similar position to Bombardier.


Maybe a little bit different ...

Embraer: "The transaction values 100 percent of Embraer’s commercial aircraft operations at $4.75 billion, and contemplates a value of $3.8 billion for Boeing’s 80 percent ownership stake in the joint venture."

Bombardier and the CSeries: 31% on CSALP and US$ 1,00 contemplated by Airbus ...


I think the majority of that difference in price would be that’s boeing is acquiring considerable engineering resources it attaches a value to. As well as some ongoing service revenue. No one will likely release a breakdown of how they valued the company but I think most of the value to Boeing is in those two areas right now.


Actually, I think the difference in value is attributable to free cash flow. Embraer generates cash. The C-Series doesn't, yet. Taking the net present value of Embraer's 2017 free cash flow at Boeing's weighted cost of capital gives you a valuation of $4.1 billion. Throw in some extras like the estimated synergies and growth expectations then deduct the Embraer defense revenues and I think the $4.5 billion is really a great deal for Boeing.
I have a three post per topic limit. You're welcome to have the last word.
 
Karlsands
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Embraer and Boeing Partnership confirmed

Thu Jul 05, 2018 2:11 pm

 
bigjku
Posts: 1906
Joined: Sat Feb 17, 2007 10:51 pm

Re: Boeing has held takeover talks with Embraer: WSJ

Thu Jul 05, 2018 2:17 pm

DfwRevolution wrote:
bigjku wrote:
EMBSPBR wrote:

Maybe a little bit different ...

Embraer: "The transaction values 100 percent of Embraer’s commercial aircraft operations at $4.75 billion, and contemplates a value of $3.8 billion for Boeing’s 80 percent ownership stake in the joint venture."

Bombardier and the CSeries: 31% on CSALP and US$ 1,00 contemplated by Airbus ...


I think the majority of that difference in price would be that’s boeing is acquiring considerable engineering resources it attaches a value to. As well as some ongoing service revenue. No one will likely release a breakdown of how they valued the company but I think most of the value to Boeing is in those two areas right now.


Actually, I think the difference in value is attributable to free cash flow. Embraer generates cash. The C-Series doesn't, yet. Taking the net present value of Embraer's 2017 free cash flow at Boeing's weighted cost of capital gives you a valuation of $4.1 billion. Throw in some extras like the estimated synergies and growth expectations then deduct the Embraer defense revenues and I think the $4.5 billion is really a great deal for Boeing.


You are probably right and state it better than I did. Airbus paid what they paid and near as I can tell they do not get anything but the plane. BBD keeps its people and resources. Boeing gets the parts of Embraer that generate money. My point was more that I don’t think they necessarily believe the E2 will be a huge money generator. I don’t think that plane was the driving force behind this deal.
 
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JetBuddy
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Re: Embraer and Boeing Partnership confirmed

Thu Jul 05, 2018 2:52 pm

Very interesting development. Congrats Boeing and Embraer.
 
PPVRA
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Re: Boeing has held takeover talks with Embraer: WSJ

Thu Jul 05, 2018 2:57 pm

bigjku wrote:

I don’t think that plane was the driving force behind this deal.


The BBD-AIRBUS deal is cited as the catalyst and all Airbus got was an airplane, so I’d say the plane is most certainly an important part of the strategy Boeing is pursuing. I do agree there is certainly quite a bit more going on here, however.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
texl1649
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Re: Boeing has held takeover talks with Embraer: WSJ

Thu Jul 05, 2018 3:07 pm

brindabella wrote:
EMBSPBR wrote:
bigjku wrote:
Embraer is in a similar position to Bombardier.


(But nothing is ever perfect - is it unseemly to speculate that some various parts of the Boeing empire will not be as stoked as Muilenberg is to acquire such a diverse range of high skills? :stirthepot: :D )


Yes, this strikes me as part of a now decade long strategy the organization developed following the September thru November 2008 IAM 751 strike. IAM working, even today, to inflict future problems in Charleston remains a concern for Boeing.
 
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E2
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Re: Embraer and Boeing Partnership confirmed

Thu Jul 05, 2018 3:11 pm

The partnership is to set up a new company dealing with commercial aircraft only, 80% Boeing (reported to be cash) and 20% Embraer. Military and bizjets are not part of the deal. Local reports suggest that the government maintains a Golden share, although it isn't clear if that applies to the new venture or what continues to be Embraer.

Talks are ongoing concerning a joint marketing company for the KC-390.
Last edited by E2 on Thu Jul 05, 2018 3:13 pm, edited 1 time in total.
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zkojq
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Re: Embraer and Boeing Partnership confirmed

Thu Jul 05, 2018 3:12 pm

Very interesting indeed. From the Brazilians perspective, I am surprised about Boeing getting 80%. A 50/50 joint venture makes sense, but 80% seems very high, considering that commercial airplanes is Embraer's bred and butter, so to speak.

Nevertheless, I wish both parties all the best.
First to fly the 787-9
 
Nean1
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Re: Boeing has held takeover talks with Embraer: WSJ

Thu Jul 05, 2018 3:16 pm

lightsaber wrote:
EMBSPBR wrote:
bigjku wrote:
Embraer is in a similar position to Bombardier.


Maybe a little bit different ...

Embraer: "The transaction values 100 percent of Embraer’s commercial aircraft operations at $4.75 billion, and contemplates a value of $3.8 billion for Boeing’s 80 percent ownership stake in the joint venture."

Bombardier and the CSeries: 31% on CSALP and US$ 1,00 contemplated by Airbus ...

Bombardier was bankrupt. They keep what, a third of the C-series for Airbus marketing, support, supply chain, and $300 million of investment.

Embraer has a good product. They just haven't sold. Getting into the Boeing warehouses alone is worth a fortune in support.

From myself, I only questioned economies of scale, support, and financing. Boeing moving forward aswages most of the concerns.

Now for sales. At this time, after discounting the E2-175 (which cannot be operated by the sole buyer), the 717 has outsold the E2. Is a non-binding LOI enough to sell more?

http://m.atwonline.com/manufacturers/bo ... mercial-jv


Airbus has teased a sale will be announced at Farnborough.

Lightsaber


Lightsaber,

Please let's put things in perspective. The 717 began its development in 1991, still as MD-95. Five years later the dices was still rolling. The E2s were only released in 2013.

The 717 would be the last member of an aging family launched in 1963, with an outdated architecture. A dead-end.

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