SAO PAULO (Reuters) - Boeing Co on Thursday said that after taking over Brazilian planemaker Embraer SA's passenger jet unit, it will call the division Boeing Brasil - Commercial, dropping one of Brazil's most iconic company names. The name change comes after Boeing agreed to pay $4.2 billion to buy 80% of Embraer's operation making passenger jets with fewer than 150 seats. Embraer will retain a 20% stake. That division is still Embraer's most profitable and considered a gold standard of Brazilian engineering.
Of course, rebranded Embraer will stay in Brazil, for now. But I can totally feel for Brazilians--it is their icon. It is akin to Ford Mustang, an American icon, being rebranded into Toyota, or, for that matter seeing Boeing being rebranded into, well, Embraer.
After Airbus SE took a controlling stake in the C Series division of Bombardier Inc, which competes directly with Embraer's commercial jets, it rebranded the planes Airbus A220, in line with the branding of other Airbus planes. The twin takeovers effectively halted the aerospace ambitions of Canada and Brazil and left China as the main threat to the transatlantic duopoly, with Russia and Japan making slower inroads, analysts said. The Embraer name holds special meaning in Brazil, evoking its founding in 1969 as a state-run company that grew into a national champion and was privatized in 1994. Embraer is short for Empresa Brasileira de Aeronáutica or Brazilian Aeronautics Company. After the deal with Boeing, Embraer will still exist as a company focused on executive jets and defense. The deal with Boeing has been approved by shareholders but is still waiting on regulatory approval.
And here is the deal with commercial (and military too, to a certain degree) aerospace. While I agree with analyst (see highlighted in yellow) in terms of Bomardier and Embraer takeovers, and, as a consequence, removal of Canada and Brazil from competition, assessing Chinese commercial aerospace industry as a threat to Airbus-Boeing duopoly is an overstatement to say the least. It rings true ONLY for China's internal, granted gigantic, commercial aircraft market, that much is true. On international arena, however, Chinese COMAC is not a competitor to either Boeing, Airbus or what is coming soon from Russia, also let's not forget where major components for such aircraft as latest upgrades for B-747 or B-787 were designed--they were designed at Russia's Boeing engineering facility. Yes, Japan is getting into the commercial aircraft market but so far those attempts with Mitsubishi's Regional Jet (MRJ) are still tightly connected with the United States, not least through, inevitably, engines.
Yes, engines, yet again. It is them, not even the ability to design and manufacture aircraft, however high level skill this is, but the ability to provide a power-plant fro aircraft which define the game. Only four (FOUR) nations possess such a strategic ability: United States (PW, GE etc.), UK (Rolls-Royce), Russia (PS and PD series) and France (Safran, and LEAP--a JV between Safran and GE). Moreover, Russians finally had it with their JV with Safran (Snecma) hot parts of SAM146 jet engine for Sukhoi SSJ-100 and are going to completely Russify SSJ-100 from avionics to APU, including substituting SAM146s with fully Russian PD-10. So, as many times was pointed out by me--only those who produce modern cutting edge power-plant for commercial aircraft are the real players in commercial airspace. In other words--only those who possess a complete enclosed technological cycle, from R&D, manufacturing composites, metals, ability to design to electronics and engines, only those can withstand competition and, in fact, will lead it. For all its elegance and a proud history, Embraer aircraft had only Brazilian fuselage--everything else, including the heart of the aircraft--its power-plant--was of Western origin. Once Embraer was privatized, it became clear what will be its final fate. Brazilians are now denied even a partial credit for their most important high-tech proud product. It really is a shame and I am slightly sad.