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Malcolm

Is This Boeing's Answer to Airbus and Bombardier ?

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Embraer and Boeing confirm merger talks

  • 21 December, 2017
  • SOURCE: Flight Dashboard
  • BY: Ghim-Lay Yeo
  • Washington DC

Boeing and Embraer have confirmed they are in talks for a "potential combination", following a Wall Street Journal report that Boeing is in discussions to take over the Brazilian airframer.

"There is no guarantee a transaction will result from these discussions. Boeing and Embraer do not intend to make any additional comments regarding these discussions," say the two companies.

They add that any potential deal is subject to the approval of the Brazilian government, regulators, both companies' boards and Embraer's shareholders.

A deal with Embraer would give Boeing a new presence in the regional jet market, following Airbus' plan announced in October to acquire a majority stake in the Bombardier CSeries programme.

Any partnership between Embraer and Boeing will allow them to combine forces against the CSeries, which has become the centre of separate trade disputes between Canada and the USA and Brazil respectively.

Earlier this week, the US Department of Commerce sided with Boeing by upholding a proposed hefty tariff on CSeries aircraft imported into the USA. The implementation of the tariff is subject to a final decision by the US International Trade Commission, expected around 1 February 2018.

Brazil has taken action against what it calls unfair state subsidies for the CSeries programme, and a World Trade Organization panel has agreed to look into Brazil's complaints.

Embraer had earlier welcomed the proposed US tariffs against the CSeries, with chief executive Paulo Cesar Silva saying that Embraer believes the move "reinforces the Brazilian government's claim" at the WTO.

Silva, however, had previously acknowledged that action through the WTO might not be the most efficient route, with rulings taking years to emerge.

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Wow, would this ever be a sea change from a few months ago when they hitched their wagon to Trump's nationalist horse.

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Embraer offers no products that compete in any of the Boeing product categories. The acquisition might be to try to demonstrate that the ‘Airbus’ CS100 is competing against the ‘Boeing’ E190/195 and therefore close attention must be paid to alleged predatory pricing and alleged subsidization.

Boeing is still playing catch up in many respects. I wonder if an EMB final assembly facility is planned within the USA?

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I can’t see this getting very far, although privatized the Brazilian government still has a veto over anything and everything Embraer does or doesn’t do. I can’t see a deal that would be agreeable to both sides and the Brazilian government. 

Try Mitsubishi. 

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6 hours ago, rudder said:

Boeing is still playing catch up in many respects. I wonder if an EMB final assembly facility is planned within the USA?

There already is one in Florida for their non-EMB/ERJ based business aircraft. I have some recollection that building the ERJ-145 in the US was proposed in the early-2000’s if the US were to buy the military R-99 variant.

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It is interesting to read the newspaper speculation but Embraer will not be acquired by Boeing. The Brazilian government would not give approval plus Embraer has a lot of other projects (including military) that are not for sale. 

If anything comes of this it will be a targeted JV just like the c-series Airbus/BBD JV and focused solely on the E2 jet line.

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There is already a partnership between Boeing and Embraer to offer the KC390 as a Hercules replacement to the USAF.

The issues that drag on the E2 are completely different than those that bedeviled the C Series and Boeing can’t fix any of them.

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