Boeing Brasil – Commercial is the name of the new company resulting from the purchase of the commercial aviation division of Brazilian Embraer by the American aerospace giant.
The choice was conservative. There is still doubt among executives of the new company about the impact of the acquisition on the market and, especially, the fear of hurting Brazilian political sensitivities. Hence Brazil with “s”, although followed by “commercial” in English.
Aircraft from Embraer
Embraer was state-owned by the military in 1969 until 1994 and is the largest national exporter of high value-added products. It is seen as the jewel of the industrial crown in a country whose trade balance is anchored in commodities.
So the most important image decision will take a few months: the name to be adopted by the E-Jets E2 series, the continuation of Embraer’s successful family of regional jets that attracted Boeing first to seek the business.
As executives of the company said, there should be surprises here. On the one hand, E2 already has a reputation established in its niche, led in recent years by Embraer.
On the other hand, the Boeing brand must be highlighted. When the American bought rival McDonnell-Douglas in 1997, it renamed only one of the models, the MD-95 – which turned out to be Boeing-717, its only regional jet, which had a short career.
Airbus, the largest competitor of Boeing, renamed the A220 Canadian C-Series aircraft Bombardier, whose line it bought in 2017. It was this business that brought a regional jet to the European product portfolio for the first time, negotiations between the Americans and Embraer, Canada’s biggest rival.
Like Airbus, Boeing only operated with larger jets – a fluid concept, the usual regional aircraft ships from 70 to 130 passengers. For Embraer, the gain in commercial scale that the rival product earned in the deal with the Europeans was decisive in the decision by the association with the Americans.
The Americans will not be able to use the name Embraer, so as not to be confused with the remaining Brazilian company that will take care of defense and security products, as well as the executive aviation area.
The assembly process of the new company, whose formation was approved after the Brazilian government exercised the opinion to which it was entitled due to the privatization rules of the former state-owned Embraer in January, is accelerated.
About one hundred people work in Brazil and the USA in the so-called “carve-out”, or unravel the commercial aviation of the current Embraer’s body. They have been headed since April 22 by former Boeing International President Marc Allen, who spends part of the month in São José dos Campos, where Embraer has its headquarters and future spaces shared with Boeing Brasil – Commercial.
Regulatory body approvals are required in nine countries for the company to launch. Three have already done so, Kenya, South Africa, and Colombia. Brazil is on track, and the US should give OK in August. Eventually, China will be absent, probably by the end of the year.
Meanwhile, the separation of the commercial aviation industry follows, not without mishaps. According to people involved in it, the biggest challenge so far is in the area of information technology, which was highly integrated into Embraer – and that guaranteed a good part of its reputation as an agile company in processes.
In engineering, the main obstacle is the reality that both Boeing and old Embraer will be subcontracted from one another. This has never happened to the two companies, and the team working on disintegration provides a catalog of up to 19,000 items that one will provide to the other.
The new company is expected to employ about 10,000 of Embraer’s current 18,500 employees (16,500 of them in Brazil). The previous forecast was 9,000 jobs, which beat the local labor union’s estimate of the workforce in the commercial aviation area.
The purchase was the largest aviation business in Brazilian history and dragged on for more than a year of discussions between companies and the government, which had veto power over Embraer’s successes. The company itself, although it had Brazilian control, had its control diluted and more than 80% was in the hand of foreign funds.