Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

 
User avatar
EMBSPBR
Topic Author
Posts: 703
Joined: Thu Aug 10, 2017 9:03 pm

The long term impacts arising on JV Boeing-Embraer

Tue Dec 18, 2018 6:18 pm

Now that the main terms of the agreement have been made public, what can we expect over the long term ???

- a boost in E2 sales, as we can see some "married sales"?
- integration of suppliers with better conditions mainly for current Embraer products?
- rump-up of the E2 line?
- a greater participation of Embraer in the JV in the new 797?
- KC390 as a candidate for the US military and its allies?

And, apparently, the concerns of the local unions here in São José dos Campos seem to be the same as in Seattle ...

Source: https://www.seattletimes.com/business/b ... decisions/

Excerpts:

"Labor unions in Brazil have expressed concern since the deal was first announced that Boeing might move some E-jet operations to the U.S.
The consent clause seems designed to allay those fears so the deal can win approval from the Brazilian government.

From the perspective of Boeing’s U.S. unions, the fear is precisely the opposite: that Boeing will place work in Brazil instead of the U.S."

And ...

"Boeing said in July that Embraer’s commercial operation near São Paulo will become “one of Boeing’s centers of excellence for end-to-end design, manufacturing, and support of commercial passenger aircraft.”

That implies Embraer’s engineers will move beyond designing the E-jets to do design work for future Boeing airplanes, including potentially the New Midmarket Airplane or 797 that’s expected to launch in 2019.
The statement also implies that some Boeing airplane manufacturing work besides the E-jets may be done in Brazil."
 
User avatar
LaunchDetected
Posts: 320
Joined: Fri Jul 13, 2012 4:42 pm

Re: The long term impacts arising on JV Boeing-Embraer

Tue Dec 18, 2018 6:25 pm

737 MAX 7 will be probably euthanased in favor of the E-195E2, like the A319neo will be predated by the A220-300.
Caravelle lover
 
bigjku
Posts: 1906
Joined: Sat Feb 17, 2007 10:51 pm

Re: The long term impacts arising on JV Boeing-Embraer

Tue Dec 18, 2018 6:43 pm

LaunchDetected wrote:
737 MAX 7 will be probably euthanased in favor of the E-195E2, like the A319neo will be predated by the A220-300.


I doubt either of those actually happen. Southwest both wants and will order three figures worth of 737-7. And I can’t see why Airbus would want to build a money losing A220 rather than an A319 (or A320) they can make money on. The E-195E2 can probably be built for a profit and may sell but I don’t see them telling Southwest to get lost on the 7 model so it will stay around.

I suspect the orphaned product lines to have relatively short lives. If they can get the E2’s into scope clauses they will sell quite a few I suppose.
 
SonomaFlyer
Posts: 2232
Joined: Tue Apr 20, 2010 2:47 pm

Re: The long term impacts arising on JV Boeing-Embraer

Tue Dec 18, 2018 6:50 pm

There is little to no chance the U.S. pilot unions will allow the E2 to fly at regional airlines under a scope clause change. They have too much leverage and too much riding on holding scope to fold on that issue for the proverbial couple of pieces of silver.

Boeing was outmaneuvered in the Bombardier/Airbus C series shuffle and this is their response. It certainly could work out but the E2 will need to make its business case against the A220 to avoid impacting the -7.
 
cledaybuck
Posts: 1740
Joined: Thu Aug 18, 2016 6:07 pm

Re: The long term impacts arising on JV Boeing-Embraer

Tue Dec 18, 2018 6:58 pm

Why is anyone concerned about the Max-7? That plane doesn't have much of a future regardless of an Embraer JV.
As we celebrate mediocrity, all the boys upstairs want to see, how much you'll pay for what you used to get for free.
 
texl1649
Posts: 1467
Joined: Thu Aug 02, 2007 5:38 am

Re: The long term impacts arising on JV Boeing-Embraer

Tue Dec 18, 2018 7:00 pm

SonomaFlyer wrote:
Boeing was outmaneuvered in the Bombardier/Airbus C series shuffle and this is their response. It certainly could work out but the E2 will need to make its business case against the A220 to avoid impacting the -7.


This is such a tired talking point. Boeing absolutely rejected the offer Airbus later accepted, for a single dollar to become a JV with the CSALP. The Embraer relationship Boeing has been fostering/working toward for over a decade.
 
User avatar
EMBSPBR
Topic Author
Posts: 703
Joined: Thu Aug 10, 2017 9:03 pm

Re: The long term impacts arising on JV Boeing-Embraer

Tue Dec 18, 2018 7:20 pm

texl1649 wrote:
SonomaFlyer wrote:
Boeing was outmaneuvered in the Bombardier/Airbus C series shuffle and this is their response. It certainly could work out but the E2 will need to make its business case against the A220 to avoid impacting the -7.


This is such a tired talking point. Boeing absolutely rejected the offer Airbus later accepted, for a single dollar to become a JV with the CSALP. The Embraer relationship Boeing has been fostering/working toward for over a decade.


I could not agree more.

The synergies go beyond E2 in the Boeing-Embraer case, unlike CSALP which gathers around only one product ...
 
bigjku
Posts: 1906
Joined: Sat Feb 17, 2007 10:51 pm

Re: The long term impacts arising on JV Boeing-Embraer

Tue Dec 18, 2018 7:45 pm

EMBSPBR wrote:
texl1649 wrote:
SonomaFlyer wrote:
Boeing was outmaneuvered in the Bombardier/Airbus C series shuffle and this is their response. It certainly could work out but the E2 will need to make its business case against the A220 to avoid impacting the -7.


This is such a tired talking point. Boeing absolutely rejected the offer Airbus later accepted, for a single dollar to become a JV with the CSALP. The Embraer relationship Boeing has been fostering/working toward for over a decade.


I could not agree more.

The synergies go beyond E2 in the Boeing-Embraer case, unlike CSALP which gathers around only one product ...


Boeing wanted/wants mostly two things. I gather EMB has a very good avionics and systems division they want. Two they want a complete product development team capable of taking a project end to end and executing it successfully. The E2 is a failure of market placement and scope issues mostly. But it was executed just fine.

Those are the things Boeing bought. They also get the E-Jets which is a possible bonus I suspect. But this is about being able to handle multiple development programs at once and growing the service business.
 
bigjku
Posts: 1906
Joined: Sat Feb 17, 2007 10:51 pm

Re: The long term impacts arising on JV Boeing-Embraer

Tue Dec 18, 2018 7:48 pm

EMBSPBR wrote:
Now that the main terms of the agreement have been made public, what can we expect over the long term ???

- a boost in E2 sales, as we can see some "married sales"?
- integration of suppliers with better conditions mainly for current Embraer products?
- rump-up of the E2 line?
- a greater participation of Embraer in the JV in the new 797?
- KC390 as a candidate for the US military and its allies?

And, apparently, the concerns of the local unions here in São José dos Campos seem to be the same as in Seattle ...

Source: https://www.seattletimes.com/business/b ... decisions/

Excerpts:

"Labor unions in Brazil have expressed concern since the deal was first announced that Boeing might move some E-jet operations to the U.S.
The consent clause seems designed to allay those fears so the deal can win approval from the Brazilian government.

From the perspective of Boeing’s U.S. unions, the fear is precisely the opposite: that Boeing will place work in Brazil instead of the U.S."

And ...

"Boeing said in July that Embraer’s commercial operation near São Paulo will become “one of Boeing’s centers of excellence for end-to-end design, manufacturing, and support of commercial passenger aircraft.”

That implies Embraer’s engineers will move beyond designing the E-jets to do design work for future Boeing airplanes, including potentially the New Midmarket Airplane or 797 that’s expected to launch in 2019.
The statement also implies that some Boeing airplane manufacturing work besides the E-jets may be done in Brazil."


I don’t see the KC-390 coming to the US as I just can’t make out a role for it. I think E2 sales will be few and far between.

I do see the JV having a role in building components for the 797 to some degree and I suspect they get around a quarter of the final assembly work on whatever takes over for the 737 eventually.
 
User avatar
EMBSPBR
Topic Author
Posts: 703
Joined: Thu Aug 10, 2017 9:03 pm

Re: The long term impacts arising on JV Boeing-Embraer

Tue Dec 18, 2018 9:37 pm

bigjku wrote:
The E2 is a failure of market placement and scope issues mostly. But it was executed just fine.


bigjku wrote:
I don’t see the KC-390 coming to the US as I just can’t make out a role for it. I think E2 sales will be few and far between.


Considered the date of its launch, I do not see the E2 family project as a market failure.

The world market goes far beyond american scope clauses.
In fact, except for SkyWest's order (now LOI) for 100 E175-E2, the remaining orders are for the larger versions and outside the United States.
As I said, now comes into the equation the heavy hand of the Boeing sales team.

As for the KC-390, we have the example of JV Embraer-Sierra Nevada that yields good fruit with the A-29 (ALX).
Remembering that Boeing in its defense portfolio does not have a product equivalent to the KC-390, and that competes directly with the C-130 of its rival Lockheed ...
 
SonomaFlyer
Posts: 2232
Joined: Tue Apr 20, 2010 2:47 pm

Re: The long term impacts arising on JV Boeing-Embraer

Tue Dec 18, 2018 11:43 pm

bigjku wrote:
EMBSPBR wrote:
texl1649 wrote:

This is such a tired talking point. Boeing absolutely rejected the offer Airbus later accepted, for a single dollar to become a JV with the CSALP. The Embraer relationship Boeing has been fostering/working toward for over a decade.


I could not agree more.

The synergies go beyond E2 in the Boeing-Embraer case, unlike CSALP which gathers around only one product ...


Boeing wanted/wants mostly two things. I gather EMB has a very good avionics and systems division they want. Two they want a complete product development team capable of taking a project end to end and executing it successfully. The E2 is a failure of market placement and scope issues mostly. But it was executed just fine.

Those are the things Boeing bought. They also get the E-Jets which is a possible bonus I suspect. But this is about being able to handle multiple development programs at once and growing the service business.



I appreciate the insight about the fact the Boeing acquisition was looking at a lot more than just the E2. It certainly wasn't meant to be a tired talking point but the timing of the JV announcement coupled with the fact Boeing was lobbying to trap the C Series in the tariff war coupled with the Airbus acquisition certainly made me wonder.

The 175 is a jet we fly on quite a bit and its a great plane. Having an additional solid engineering team or two added to Boeing's kit sounds like a good plan.
 
User avatar
IslandRob
Posts: 623
Joined: Fri Apr 29, 2011 2:04 am

Re: The long term impacts arising on JV Boeing-Embraer

Tue Dec 18, 2018 11:55 pm

EMBSPBR wrote:
- rump-up of the E2 line?

That would be worth seeing. -ir
If you wrote me off, I'd understand it
'Cause I've been on some other planet
So come pick me up, I've landed
 
LDRA
Posts: 329
Joined: Fri Jan 15, 2016 3:01 am

Re: The long term impacts arising on JV Boeing-Embraer

Wed Dec 19, 2018 12:02 am

Squeeze aero component suppliers, now only two high volume customers instead of four
 
LDRA
Posts: 329
Joined: Fri Jan 15, 2016 3:01 am

Re: The long term impacts arising on JV Boeing-Embraer

Wed Dec 19, 2018 12:04 am

bigjku wrote:
EMBSPBR wrote:
texl1649 wrote:

This is such a tired talking point. Boeing absolutely rejected the offer Airbus later accepted, for a single dollar to become a JV with the CSALP. The Embraer relationship Boeing has been fostering/working toward for over a decade.


I could not agree more.

The synergies go beyond E2 in the Boeing-Embraer case, unlike CSALP which gathers around only one product ...


Boeing wanted/wants mostly two things. I gather EMB has a very good avionics and systems division they want. Two they want a complete product development team capable of taking a project end to end and executing it successfully. The E2 is a failure of market placement and scope issues mostly. But it was executed just fine.

Those are the things Boeing bought. They also get the E-Jets which is a possible bonus I suspect. But this is about being able to handle multiple development programs at once and growing the service business.


Turn key outsourcing of product dev?

What is core competencies of Boeing then? Lawyering?
 
TTailedTiger
Posts: 2697
Joined: Sun Aug 26, 2018 5:19 am

Re: The long term impacts arising on JV Boeing-Embraer

Wed Dec 19, 2018 12:55 am

SonomaFlyer wrote:
There is little to no chance the U.S. pilot unions will allow the E2 to fly at regional airlines under a scope clause change. They have too much leverage and too much riding on holding scope to fold on that issue for the proverbial couple of pieces of silver.

Boeing was outmaneuvered in the Bombardier/Airbus C series shuffle and this is their response. It certainly could work out but the E2 will need to make its business case against the A220 to avoid impacting the -7.


This is a really childish move by pilot unions. The E175 puts on a little weight during its makeover and they throw a fit. It will still have 76 seats or less. A much more sensible solution would be to allow a certain % of flight operations to be operated by regional carriers using aircraft with 76 seats or less. Crying over the weight of the aircraft is just asinine. The pilots are not bargaining in good faith.
 
bigjku
Posts: 1906
Joined: Sat Feb 17, 2007 10:51 pm

Re: The long term impacts arising on JV Boeing-Embraer

Wed Dec 19, 2018 1:00 am

LDRA wrote:
bigjku wrote:
EMBSPBR wrote:

I could not agree more.

The synergies go beyond E2 in the Boeing-Embraer case, unlike CSALP which gathers around only one product ...


Boeing wanted/wants mostly two things. I gather EMB has a very good avionics and systems division they want. Two they want a complete product development team capable of taking a project end to end and executing it successfully. The E2 is a failure of market placement and scope issues mostly. But it was executed just fine.

Those are the things Boeing bought. They also get the E-Jets which is a possible bonus I suspect. But this is about being able to handle multiple development programs at once and growing the service business.


Turn key outsourcing of product dev?

What is core competencies of Boeing then? Lawyering?


Boeing wants to shorten development cycles and rapidly iterate from what it’s next aircraft will be. You can’t just pull together the people necessary by hiring them to increase R&D output by 50% or more. There aren’t enough experienced people at the high levels to do it. They won’t be getting rid of the people they have. Rather their R&D capacity will get bigger as will their services division.

NMA as far as we know still has a 2025 EIS date. Take it or leave it. But I expect them to iterate one or two variants if not more off of it within 5 more years while also launching a 737 replacement. It wouldn’t shock me if a 787Max was also part of that 2030 timeframe as well.

Boeing improves its ability to do these things by doing this.
 
SonomaFlyer
Posts: 2232
Joined: Tue Apr 20, 2010 2:47 pm

Re: The long term impacts arising on JV Boeing-Embraer

Wed Dec 19, 2018 1:33 am

TTailedTiger wrote:
SonomaFlyer wrote:
There is little to no chance the U.S. pilot unions will allow the E2 to fly at regional airlines under a scope clause change. They have too much leverage and too much riding on holding scope to fold on that issue for the proverbial couple of pieces of silver.

Boeing was outmaneuvered in the Bombardier/Airbus C series shuffle and this is their response. It certainly could work out but the E2 will need to make its business case against the A220 to avoid impacting the -7.


This is a really childish move by pilot unions. The E175 puts on a little weight during its makeover and they throw a fit. It will still have 76 seats or less. A much more sensible solution would be to allow a certain % of flight operations to be operated by regional carriers using aircraft with 76 seats or less. Crying over the weight of the aircraft is just asinine. The pilots are not bargaining in good faith.


Childish? Scope clauses imposed in bankruptcy and in bad deals stagnated the industry for at least a decade and helped to keep pilot pay down by moving the flying off the main line to feeder regional carriers.

The pilots finally sorted out their priorities. They set a hard cap on the number of seats, MGW of the aircraft and number allowed to be used by the airline to claw back jobs.

Your solution isn't a bad one but they don't want to allow the E2 on any property precisely because that would erode their future bargaining position by conceding that point. Percentage based flying is used by DL when looking at their JV with foreign carriers and the DL pilots aren't thrilled about it. It helps their profit sharing but look at the number of DL widebodies compared to UA?

The unions learned some hard lessons and drew some red lines around regional flying. The airlines can at anytime and likely will have to bring that flying in-house based on the number of upcoming retirements and lack of qualified pilots in the pipeline.
 
TTailedTiger
Posts: 2697
Joined: Sun Aug 26, 2018 5:19 am

Re: The long term impacts arising on JV Boeing-Embraer

Wed Dec 19, 2018 1:45 am

SonomaFlyer wrote:
TTailedTiger wrote:
SonomaFlyer wrote:
There is little to no chance the U.S. pilot unions will allow the E2 to fly at regional airlines under a scope clause change. They have too much leverage and too much riding on holding scope to fold on that issue for the proverbial couple of pieces of silver.

Boeing was outmaneuvered in the Bombardier/Airbus C series shuffle and this is their response. It certainly could work out but the E2 will need to make its business case against the A220 to avoid impacting the -7.


This is a really childish move by pilot unions. The E175 puts on a little weight during its makeover and they throw a fit. It will still have 76 seats or less. A much more sensible solution would be to allow a certain % of flight operations to be operated by regional carriers using aircraft with 76 seats or less. Crying over the weight of the aircraft is just asinine. The pilots are not bargaining in good faith.


Childish? Scope clauses imposed in bankruptcy and in bad deals stagnated the industry for at least a decade and helped to keep pilot pay down by moving the flying off the main line to feeder regional carriers.

The pilots finally sorted out their priorities. They set a hard cap on the number of seats, MGW of the aircraft and number allowed to be used by the airline to claw back jobs.

Your solution isn't a bad one but they don't want to allow the E2 on any property precisely because that would erode their future bargaining position by conceding that point. Percentage based flying is used by DL when looking at their JV with foreign carriers and the DL pilots aren't thrilled about it. It helps their profit sharing but look at the number of DL widebodies compared to UA?

The unions learned some hard lessons and drew some red lines around regional flying. The airlines can at anytime and likely will have to bring that flying in-house based on the number of upcoming retirements and lack of qualified pilots in the pipeline.


I would love for more flying to be brought to mainline but the economics have to make sense. You can't pay 737 wages for a regional jet. The pilots need to understand that. If they proposed a realistic wage then I'm sure DL/UA/AA would be glad to bring the regional jets in-house.

But Delta management was foolish to ever agree to aircraft weight stipulations. That was incredibly short-sighted of them to think that the weight of a regional jet would never increase. The have really made a fine mess for themselves.
 
User avatar
lightsaber
Moderator
Posts: 20568
Joined: Wed Jan 19, 2005 10:55 pm

Re: The long term impacts arising on JV Boeing-Embraer

Wed Dec 19, 2018 1:50 am

Why the MAX -7 talk? It failed. It is Boeing's toe hold in the shortfield market and nothing more. Every engine PIP favors the larger airframe.

bigjku wrote:
EMBSPBR wrote:
texl1649 wrote:

This is such a tired talking point. Boeing absolutely rejected the offer Airbus later accepted, for a single dollar to become a JV with the CSALP. The Embraer relationship Boeing has been fostering/working toward for over a decade.


I could not agree more.

The synergies go beyond E2 in the Boeing-Embraer case, unlike CSALP which gathers around only one product ...


Boeing wanted/wants mostly two things. I gather EMB has a very good avionics and systems division they want. Two they want a complete product development team capable of taking a project end to end and executing it successfully. The E2 is a failure of market placement and scope issues mostly. But it was executed just fine.

Those are the things Boeing bought. They also get the E-Jets which is a possible bonus I suspect. But this is about being able to handle multiple development programs at once and growing the service business.

Boeing definitely wants the engineering team first.

As a Pratt fan, I want the E2 to sell. However the E2-175 fails on scope as you noted. The E2-190 is in a no man's land (too small for mainline costs). The E2-195 has the best chance, but it should have sold better already.

Sadly, it seems most of the market is upgauging. For example, B6 E1-190 to A220-300. DL MD-90 to 739. So it is a tough market.

But engineering on the 797 will be in the cards.

Lightsaber
Winter is coming.
 
LDRA
Posts: 329
Joined: Fri Jan 15, 2016 3:01 am

Re: The long term impacts arising on JV Boeing-Embraer

Wed Dec 19, 2018 3:17 am

bigjku wrote:
LDRA wrote:
bigjku wrote:

Boeing wanted/wants mostly two things. I gather EMB has a very good avionics and systems division they want. Two they want a complete product development team capable of taking a project end to end and executing it successfully. The E2 is a failure of market placement and scope issues mostly. But it was executed just fine.

Those are the things Boeing bought. They also get the E-Jets which is a possible bonus I suspect. But this is about being able to handle multiple development programs at once and growing the service business.


Turn key outsourcing of product dev?

What is core competencies of Boeing then? Lawyering?


Boeing wants to shorten development cycles and rapidly iterate from what it’s next aircraft will be. You can’t just pull together the people necessary by hiring them to increase R&D output by 50% or more. There aren’t enough experienced people at the high levels to do it. They won’t be getting rid of the people they have. Rather their R&D capacity will get bigger as will their services division.

NMA as far as we know still has a 2025 EIS date. Take it or leave it. But I expect them to iterate one or two variants if not more off of it within 5 more years while also launching a 737 replacement. It wouldn’t shock me if a 787Max was also part of that 2030 timeframe as well.

Boeing improves its ability to do these things by doing this.


So basically Boeing is trying to pull off NMA and NSA in parallel

How much experience EMB team has with large scale carbon composite structure and electrified aircraft systems?
 
User avatar
TWA772LR
Posts: 7347
Joined: Thu Nov 17, 2011 6:12 am

Re: The long term impacts arising on JV Boeing-Embraer

Wed Dec 19, 2018 6:18 am

Im anxious to see how the new tie up will affect UAs decision for the A220 or E2. IMO this gives the E2 the edge.
When wasn't America great?


The thoughts and opinions shared under this username are mine and are not influenced by my employer.
 
VV
Posts: 1905
Joined: Sat Feb 13, 2016 1:03 pm

Re: The long term impacts arising on JV Boeing-Embraer

Wed Dec 19, 2018 7:44 am

Sorry for asking this question.

Does anyone here think Mitsubishi Aircraft could potentially join the club? Thanks.
 
User avatar
keesje
Posts: 14103
Joined: Thu Apr 12, 2001 2:08 am

Re: The long term impacts arising on JV Boeing-Embraer

Wed Dec 19, 2018 8:47 am

VV wrote:
Sorry for asking this question.

Does anyone here think Mitsubishi Aircraft could potentially join the club? Thanks.


That seems unlikely, because of the full MRJ / 190-E2 overlap. Theoretically it would better fit the Airbus family, inbetween ATR and A220, but that is useless speculation.

I think from a portfolio standpoint the E195-E2 is a nice addition. It's is way bigger and more capable then the most successful E190. The few 737-7 customers seem to abandon it, so there might be opportunity to look at growing the E2, I think every meter/ seatrow that can be found there, taps into the huge <150 seats segment where the A220 seems to dominate at this stage. https://www.airliners.net/forum/viewtopic.php?t=1410405

As you suggest, the KC-390 seems an serious opportunity. There is a enormous aging C-130 fleet, the C-130J has been on low rate production for years and the KC390 is notably larger, faster and more capable. Still way more affordable then a A400M. A big opportunity for Boeing / Embraer it seems.

Longer term Boeing adds a large, skilled lower cost workforce, on all levels. For NSA & NMA projects that can only help.

As a detail, the companies are 10-12 flying hours apart, but having only 3-4 hr times zones between them, should not be underestimated as an advantage in day to day cooperation / communication.

Embraer surely could use some profesional Boeing marketing support IMO. Putting an aggressive military style shark face on a world tour civil aircraft, to intimidate potential buyers (?), I never understood the genius communication strategy behind that.. I would think you want to charm, bond, make friends.. ANA understands better (A380) or Alaska.

Image
"Never mistake motion for action." Ernest Hemingway

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos