Embraer - Empresa Brasileira de Aeronautica S.A. - is Brazil's largest aircraft manufacturer. Embraer is the world's fourth largest civilian airplane maker and Brazil's top exporter. Embraer's headquarters is located in Sao Jose dos Campos, in the State of Sao Paulo. Embraer leads a group with widely diversified interests in the aerospace field. The group's activities entail the design, development, production and marketing of a range of turboprop and jet aircraft for regional airline and military use, turboprop aircraft for general aviation, corporate and agricultural utilization, and aviation-related mechanical and hydraulic systems. Embraer is a major buyer of equipment and parts for its own production line, as well as a major international supplier for the aviation market. The United States is its largest customer, and largest supplier of parts. The US has a percentage of 65% on Embraer purchases.
Embraer was founded in 1969. The year 1971 saw the first flight of the Xavante, a trainer and attack / photo reconnaissance aircraft. Produced from 1971 to 1982, it was manufactured under the license of the Italian manufacturer Aermacchi. By the mid-1980s, Embraer had become the largest aircraft manufacturer in the developing world, with sales of more than 4,000 aircraft. It has encountered great success with its Bandeirante and Brasília models, sold to the United States and other foreign countries. In 1988, at its height, it employed more than 12,000 workers. The Brazilian government owned about 5 percent of the company but controlled most of the voting stock. The government supported Embraer with generous interest rates on its loans, a reinvestment of profits into research and development, and purchases of its aircraft.
Embraer was founded as a government initiative and then privatized in 1994. The company currently employs over 11,000 people and is publicly traded on the New York and São Paulo Stock Exchanges. Brazilian interests - investment conglomerate Cia. Bozano and pension funds PREVI and SISTEL - control 60% of the voting shares.
A leading group of European aerospace companies - Dassault Aviation, EADS, Snecma, and Thales - jointly owns another 20 percent. Their investment aids the introduction of new technology and products while enhancing our prospects in world markets. The group paid about USDOLS 209 millions for 20 percent of the voting shares in Embraer. With the deal the French companies could gain an advantage in the bidding process for renovating Brazil's fleet of fighter jets. Embraer will gain access to the strong technological and commercial networks of the French, especially those of Dassault. They will also improve their position in Latin America's defense market, with the potential for USDOLS 8 billion in contracts in Brazil alone.
Embraer has 650 units of Tucano aircraft in operation in 15 different Air Forces around the world. Following the success of the EMB-312 Embraer has designed the EMB-314 Super Tucano. Embraer has made several improvements to its production line to enhance the training and operational capabilities of its aircraft.
The EMB-120 Brasilia, another aircraft manufactured by Embraer has become a mainstay of short-haul routes worldwide. To date, it has logged over 5.5 million flight hours and carried more then eighty million passengers. Embraer has delivered more than 279 EMB-120 to 26 customers in 14 countries.
Embraer also entered the market for 30 to 70 passengers aircraft, with ranges from 800 to 1,700 nautical miles with the ERJ-135 and ERJ-145 models. Standing behind the aircraft are Embraer's modern managerial tools and partnerships with well-known manufactures of aerospace structures, electronic system and parts such as Rolls Royce/Allison Engines and C&D Interiors (U.S.), Gamesa (Spain), Sonaca (Belgium) and Enaer (Chile). Production of ERJ-135 and ERJ-145 relies on 800 suppliers providing more than 40,000 parts. Early in 1999, Embraer announced the production of the ERJ-190 and ERJ-170. This represented their entrance into the market for 70 to 110 seat airplanes.
Embraer achieved profitability in 1998, with earnings of USDOLS 109.2 million. They also had a substantial increase in gross revenue to USDOLS 1.3 billion, a backlog of firm orders of USDOLS 4.1 billions, and increase in shareholders' equity to USDOLS 345.7 millions. In 1998, Embraer created more than 2,000 new jobs and expected to create 3,000 more jobs with the launch of the new ERJ-170 and ERJ-190. Embraer profitability is expected to continue to grow mainly because of the ERJ-170, ERJ-190 and also the ERJ-135 and ERJ-145. Embraer is among the most productive aircraft manufacturers in the world, with USDOLS 227,000 in revenue per employee. At the 1999 Le Bourget Air Show in Paris, Embraer signed the largest contract for a regional aircraft in market history. Swiss Crossair ordered 200 jets, a market of around USDOLS 4.9 billions.
The company has applied its success with regional aircraft to the defense market. New products based on the ERJ 145 platform - such as the airborne early warning EMB 145 AEW&C, the remote sensing EMB 145 RS/AGS, and the maritime patrol/anti-submarine warfare EMB 145 MP/ASW (P 99) - have enormous potential in the underserved international defense market. Other successful products include the Super Tucano/ALX and the new AMX-T trainer.
The actual manufacture of an aircraft consists of three principal stages: fabrication of primary parts, assembly of major components and final assembly. Primary parts include metal sheets and plates (produced from die-cast molds, stretch forming or various chemical treatments), parts produced using computerized and non-computerized machines, and pre-fabricated parts. The primary parts are then joined, or mated, with one another to produce the aircraft's major components, which are in turn joined to create the aircraft's basic structure. In the final assembly stage, the aircraft's various operating systems (such as wiring and electronics) are installed into the structure and tested.
Production facilities for our commercial, executive and defense aircraft are located in São José dos Campos in the State of São Paulo, Brazil. Embraer reduced the aircraft production time of aircraft in the ERJ 145 family from eight months in 1996 to 3.1 months in 2004. From December 31, 1999 to December 31, 2000, we increased our production from 12 to 16 ERJ 145 family aircraft per month. At March 31, 2001, our production rate was 16 aircraft per month. In response to decreased market demand after the September 11, 2001 terrorist attacks and the related global economic slowdown, Embraer decreased production to 11 aircraft per month and, in 2005, decreased it further to nine aircraft per month.
E-Jets - Embraer 170 / 190
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