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Revelation wrote:KarelXWB wrote:Nobody is ordering CSeries and MRJ aircraft by the hundreds either. Whether Airbus can change CSeries sales remains to be seen. The market may not be as big as some people believe.
Indeed. A and B have narrowbody backlogs in the many of thousands with nice profit margins on sales and support. Here we see products struggling to have backlogs of a few hundreds and the market split by many different players with all players sacrificing profit to get some market credibility. The acknowledged up-gauging of aircraft sizes works against this market. A had no interest here till BBD had no choice but give them half the program for $1. IMHO Boeing would be best off steering clear. The only "wildcard" is if they truly see some capabilities that EMB has that would strongly advantage the NMA, but it's hard to see what those capabilities could be.
Waterbomber wrote:What Boeing can do with the Ejet, is keep Airbus honest with the Cseries.
What we will see happen in the coming years, is Airbus ramping up the Cseries production significantly, while positioning it in the 120-160 seat segment, below the A320. Airbus has stronger sales potential, more leverage versus suppliers of systems and components, a better support system. Airbus has the potential to create a market, not solely by ofering a good product in the right way, but also by making the product affordable and reliable.
Embraer will no longer be competing against the Bombardier Cseries, but against the Airbus Cseries.
In a head-to-head competition for an order, there is no way that an airline would choose an Embraer product over an Airbus product.
Revelation wrote:Nean1 wrote:Like many aviation lovers I am fascinated by the charisma of the Mitsubishi Zero fighter, with clean lines and unique maneuverability.
Maneuverable because it had no armor and no self sealing fuel tanks. Turns out the design was OK as long as the enemy fought a turning fight. Once they learned to not do that, it was toast, literally.
kitplane01 wrote:Grammar police mode = on
What do you think "literally" means? Normally it means "not a figure of speech"", and your last sentence means the Zero was roasted bread..
Grammar police mode = off
Waterbomber wrote:What Boeing can do with the Ejet, is keep Airbus honest with the Cseries.
What we will see happen in the coming years, is Airbus ramping up the Cseries production significantly, while positioning it in the 120-160 seat segment, below the A320. Airbus has stronger sales potential, more leverage versus suppliers of systems and components, a better support system. Airbus has the potential to create a market, not solely by ofering a good product in the right way, but also by making the product affordable and reliable.
Embraer will no longer be competing against the Bombardier Cseries, but against the Airbus Cseries.
In a head-to-head competition for an order, there is no way that an airline would choose an Embraer product over an Airbus product.
We've seen this already before. BBD had a better product in the Cseries, but it couldn't win campaigns against neither Airbus nor Boeing.
The Cseries is going to make Airbus the biggest and most complete aircraft manufacturer in the world. The leader in the segment.
Boeing doesn't want to let that happen.
ExMilitaryEng wrote:Airbus itself declared they could produce the CSeries 15% cheaper. Most of the savings were from components/ systems costs.
Revelation wrote:ExMilitaryEng wrote:Airbus itself declared they could produce the CSeries 15% cheaper. Most of the savings were from components/ systems costs.
15% is significant for sure but not sure if it drags the product from a ruinous proposition to a "create a market" proposition, again in the face of much competition.
EMBSPBR wrote:True. (Airbus 15% savings in producing CSeries)
His/hers comment is the traditional "let´s push the best plane in the world" ...
Revelation wrote:Waterbomber wrote:What Boeing can do with the Ejet, is keep Airbus honest with the Cseries.
What we will see happen in the coming years, is Airbus ramping up the Cseries production significantly, while positioning it in the 120-160 seat segment, below the A320. Airbus has stronger sales potential, more leverage versus suppliers of systems and components, a better support system. Airbus has the potential to create a market, not solely by ofering a good product in the right way, but also by making the product affordable and reliable.
Embraer will no longer be competing against the Bombardier Cseries, but against the Airbus Cseries.
In a head-to-head competition for an order, there is no way that an airline would choose an Embraer product over an Airbus product.
We've seen this already before. BBD had a better product in the Cseries, but it couldn't win campaigns against neither Airbus nor Boeing.
The Cseries is going to make Airbus the biggest and most complete aircraft manufacturer in the world. The leader in the segment.
Boeing doesn't want to let that happen.
I don't buy it.
For all those economies of scale to kick in, the market demand is going to need to soar. The vendors only give you the 737/A320 style discounts if you buy in 737/A320 quantities. Who is going to be buying CS on that scale? Especially given the competition it has?
We've talked the US market to death. Scope change ain't coming. DL's put their chips on the table, but they're the only one of the big 3 that has shown it can make money in that market segment. No signs of interest from AA or UA.
China? Nope, they've got their own local champion. Might buy a few to satisfy the political ex-im concerns and get a nice good look at the fit and finish, but that's about it.
EU? Is there airport/airspace capacity to start hosting 120 seaters on the same scale as A320/737?
It will be interesting to see what happens once the papers get signed. We should get a good feel for how hard Airbus pushes the product. Then in another 2 years or so we should see if the Airbus umbrella is enough to "create a market". As above, I'm skeptical.
Waterbomber wrote:On the E175-E2 front, the MRJ, the SSJ100 are now part of the market, with the MRJ as the leading product.
Embraer management are probably more desperate for this deal than Boeing.
Boeing Co (BA.N) is working to overcome the Brazilian military’s objections to its proposed tie-up with Embraer SA (EMBR3.SA) with alternatives that would preserve the government’s strategic veto rights and ensure safeguards for its defense programs, four people familiar with the matter told Reuters.
The U.S. planemaker was forced back to the drawing board after Brazilian officials balked last week at the idea of turning Embraer into a subsidiary such as those that Boeing operates in Australia and Britain, according to the sources, who requested anonymity to discuss the negotiations freely.
Boeing’s plan has snagged on concerns in Brasilia that Washington would get final say over Brazilian defense programs and use of technology developed in the country, including satellite and air-traffic control systems.
The Brazilian government holds a ‘golden share’ in Embraer giving it veto power over strategic decisions involving military programs and any change in its controlling interest. Boeing would be willing to preserve the government’s golden share in Embraer, the people familiar with the matter said, but that may not be enough to win support.
“The Air Force is the main source of resistance,” said an aide to President Michel Temer. “The military oppose any split up of Embraer.” The aide said Jungmann has not yet made a recommendation on the Boeing deal to the president. In an emailed comment, the Air Force said it “considers Embraer a strategic company that is fundamental for our national sovereignty, so a possible partnership with Boeing should also be studied from this point of view.”
With a presidential election looming in Brazil this year and airlines delaying orders until the shape of the industry is clear, all sides of the negotiations are eager for a resolution. Still, government officials are keen on pressing their hand.
“We think Boeing will end up agreeing to a partnership or a joint venture because they have been weakened by the Airbus-Bombardier deal,” said the official familiar with the talks. “They have no other possible partner and need a quick fix.”
KarelXWB wrote:Lol, $6 billion? That must be the equivalent of lunch money, no?
Polot wrote:$6 billion doesn’t sound like a lot but remember we are talking about a company with a current market cap of ~$4.7 billion. They also only bring in about $6 billion in revenue a year (for comparison, BBD aerospace brings in about $11 billion in revenue). Don’t over estimate the size of Embraer and how cheap Brazil can be...the E-jet program only cost them what, around $1 billion to develop, and the E2 about $2 billion?
Nean1 wrote:There is no news in labor syndicate protests. Twenty years ago, the same syndicate also opposed the privatization of Embraer.
I understant there is no chance of a simple company take-over. I believe Boeing will negotiate some veto power in exchange for equity interest or long term loans. The management of Embraer is very sensitive to its decision freedom and the examples of Boeing (De Havilland) and Airbus (ATR) are not very encouraging.
With all due respect to the good work of Boeing and Airbus, if Embraer were to be managed as one of them probably the company would have already failed. Embraer operates in markets where it is necessary to be much more agile and lean.
That is to say, I see as a somewhat complicated relationship with many important issues that must be discussed in advance so that no one regrets afterwards. On the other hand the potential gains for both sides are very large, so it's worth the effort.
Finally I understand that a more flexible and intelligent model of partner will at some point also interest Saab. A Boeing-Embraer-Saab association would have incredible potential.
brindabella wrote:OK, some real opinions/projections please!
What do you think?
cheers Bill
brindabella wrote:
Dual factories, one in Brazil, one in US?
What do you think?
cheers Bill
LockheedBBD wrote:brindabella wrote:
Dual factories, one in Brazil, one in US?
What do you think?
cheers Bill
As much production as possible in Brazil because of cheaper labor costs.
The talks became public in December following Airbus’ shock move to acquire control of the CSeries jet program from Bombardier of Canada.
Yet Muilenburg is adamant that Airbus’ decision “wasn’t a trigger for us … No. Not at all.”
He confirmed The Seattle Times’ account of Boeing’s longtime interest in Embraer, stretching back to 1999, and the close partnership the two companies have enjoyed in recent years.
“We always look at the competitive playing field, but this is something we’ve been working on for a long time,” Muilenburg said. “We have a very intimate relationship with Embraer.”
He envisages selling packages of regional and mainline jets to carriers — such as Alaska Airlines — that have combined fleets of Embraer Ejets and Boeing 737s, as well as selling aftermarket services to such airlines across both aircraft sectors.
If it can buy Embraer, Muilenburg said, Boeing will be able to go into the global marketplace with an expanded offering across regional, single-aisle and twin-aisle jets.
Swedish manufacturer SAAB can revise its contract to supply Grippen to FAB fighters if it considers that the eventual association between Boeing and Embraer jeopardizes the technological secrets of its product.
Revelation wrote:In https://www.seattletimes.com/business/b ... ith-trump/ we can read Boeing CEO's quotes on now things started and where they stand:The talks became public in December following Airbus’ shock move to acquire control of the CSeries jet program from Bombardier of Canada.
Yet Muilenburg is adamant that Airbus’ decision “wasn’t a trigger for us … No. Not at all.”
He confirmed The Seattle Times’ account of Boeing’s longtime interest in Embraer, stretching back to 1999, and the close partnership the two companies have enjoyed in recent years.
“We always look at the competitive playing field, but this is something we’ve been working on for a long time,” Muilenburg said. “We have a very intimate relationship with Embraer.”
He then talks about how the workforce and skills line up favorably, and why the deal would be attractive:He envisages selling packages of regional and mainline jets to carriers — such as Alaska Airlines — that have combined fleets of Embraer Ejets and Boeing 737s, as well as selling aftermarket services to such airlines across both aircraft sectors.
If it can buy Embraer, Muilenburg said, Boeing will be able to go into the global marketplace with an expanded offering across regional, single-aisle and twin-aisle jets.
Seems dubious to me. Why should Boeing spend money to get into the same market that BBD was willing to give to them for $1, and in the process piss off a big commercial and defense customer? Seems to me if they make this kind of move they are admitting they were outflanked.
Also if I was him I don't know that I'd discuss this in the same article where I'm discussing spending the windfall from the Trump corporate welfare tax break. It ends up sounding like the taxpayers will end up bailing Boeing out of a strategic mistake.
william wrote:Revelation wrote:In https://www.seattletimes.com/business/b ... ith-trump/ we can read Boeing CEO's quotes on now things started and where they stand:The talks became public in December following Airbus’ shock move to acquire control of the CSeries jet program from Bombardier of Canada.
Yet Muilenburg is adamant that Airbus’ decision “wasn’t a trigger for us … No. Not at all.”
He confirmed The Seattle Times’ account of Boeing’s longtime interest in Embraer, stretching back to 1999, and the close partnership the two companies have enjoyed in recent years.
“We always look at the competitive playing field, but this is something we’ve been working on for a long time,” Muilenburg said. “We have a very intimate relationship with Embraer.”
He then talks about how the workforce and skills line up favorably, and why the deal would be attractive:He envisages selling packages of regional and mainline jets to carriers — such as Alaska Airlines — that have combined fleets of Embraer Ejets and Boeing 737s, as well as selling aftermarket services to such airlines across both aircraft sectors.
If it can buy Embraer, Muilenburg said, Boeing will be able to go into the global marketplace with an expanded offering across regional, single-aisle and twin-aisle jets.
Seems dubious to me. Why should Boeing spend money to get into the same market that BBD was willing to give to them for $1, and in the process piss off a big commercial and defense customer? Seems to me if they make this kind of move they are admitting they were outflanked.
Also if I was him I don't know that I'd discuss this in the same article where I'm discussing spending the windfall from the Trump corporate welfare tax break. It ends up sounding like the taxpayers will end up bailing Boeing out of a strategic mistake.
Because maybe BBD as a whole is not the corporate gem some here think it is. And looking at the CS and E2 projects at how they were handled and developed, the decision is clear to Boeing.
Again, this cannot be said enough and gets purposely overlooked because it doesn't fit the popular narrative here on Anet. Boeing was OFFERED the same deal as Airbus, but passed.
Revelation wrote:Seems dubious to me. Why should Boeing spend money to get into the same market that BBD was willing to give to them for $1, and in the process piss off a big commercial and defense customer?
LockheedBBD wrote:Revelation wrote:Seems dubious to me. Why should Boeing spend money to get into the same market that BBD was willing to give to them for $1, and in the process piss off a big commercial and defense customer?
Embraer can provide Boeing with low-cost engineers, and low-cost labor. I read somewhere that Boeing has a shortage of experienced engineers. Embraer knows how to deliver planes on-time, on-budget, and above specifications. I can't say the same for Bombardier's CSeries program. Boeing and Embraer also have a cockpit commonality agreement according to last week's Seattle Times article. The CSeries cockpit is more similar to something from Airbus.
Boeing has long known it’s facing an exodus of engineers and technicians from its white collar ranks as the workforce ages.
Since 2013, Boeing laid off thousands of engineers and technicians from its Washington State operations, simply cutting jobs and transferring others to lower cost working environments in right-to-work (ie, non-union) states.
But the cuts have been too deep. Thousands of tasks on the 737 and wide-body lines have been incomplete as the airplanes rolled out the doors, LNC is told. Boeing’s had to scramble to complete the jobs on the ramps to maintain delivery schedules.
Boeing has been hiring back retired and laid-off engineers and technicians as contractors to rebuild the force.
But this doesn’t help fill the thousands of jobs coming up through retirements and the emerging labor pool isn’t going to be enough, either.
KarelXWB wrote:Well yes, https://leehamnews.com/2018/01/08/boein ... d-embraer/ learns us:Boeing has long known it’s facing an exodus of engineers and technicians from its white collar ranks as the workforce ages.
Since 2013, Boeing laid off thousands of engineers and technicians from its Washington State operations, simply cutting jobs and transferring others to lower cost working environments in right-to-work (ie, non-union) states.
But the cuts have been too deep. Thousands of tasks on the 737 and wide-body lines have been incomplete as the airplanes rolled out the doors, LNC is told. Boeing’s had to scramble to complete the jobs on the ramps to maintain delivery schedules.
Boeing has been hiring back retired and laid-off engineers and technicians as contractors to rebuild the force.
But this doesn’t help fill the thousands of jobs coming up through retirements and the emerging labor pool isn’t going to be enough, either.
aerolimani wrote:william wrote:Revelation wrote:In https://www.seattletimes.com/business/b ... ith-trump/ we can read Boeing CEO's quotes on now things started and where they stand:
He then talks about how the workforce and skills line up favorably, and why the deal would be attractive:
Seems dubious to me. Why should Boeing spend money to get into the same market that BBD was willing to give to them for $1, and in the process piss off a big commercial and defense customer? Seems to me if they make this kind of move they are admitting they were outflanked.
Also if I was him I don't know that I'd discuss this in the same article where I'm discussing spending the windfall from the Trump corporate welfare tax break. It ends up sounding like the taxpayers will end up bailing Boeing out of a strategic mistake.
Because maybe BBD as a whole is not the corporate gem some here think it is. And looking at the CS and E2 projects at how they were handled and developed, the decision is clear to Boeing.
Again, this cannot be said enough and gets purposely overlooked because it doesn't fit the popular narrative here on Anet. Boeing was OFFERED the same deal as Airbus, but passed.
I think Boeing was (still is?) quite convinced that it will kill the CSeries by litigation. Why bother taking on a product, even for a steal, that you are convinced you can kill off?
aerolimani wrote:I think Boeing was (still is?) quite convinced that it will kill the CSeries by litigation. Why bother taking on a product, even for a steal, that you are convinced you can kill off?
Nean1 wrote:But how to explain the decisions, how to prioritize CS-100 on CS-500? Boeing and Airbus would not realize that the plane was reasonably large and pointed to the heart of its own single-aisle aircraft lines. Instead of the CS-500, the company launched the CS-100, at best, an niche aircraft.
Even the claimed leadership in energy efficiency seems quite threatened by the E2 line, theoretically less technological, but lighter and with improved aerodynamics.
Revelation wrote:And then you add that to the (astronomical) cost of housing in the SEA area and realize few will chose to move there just to work for Boeing.
PW100 wrote:Revelation wrote:And then you add that to the (astronomical) cost of housing in the SEA area and realize few will chose to move there just to work for Boeing.
Why would they need to move? Many enigneering tasks can be done from Brasil . . . it's a global industry, connected networks etc.
aerolimani wrote:
Another worthwhile narrative is that Embraer, its product, and its corporate culture, are a better fit with Boeing. And similarly, the CSeries is a better fit with Airbus. Try to tell me there isn’t some truth in that.
tistpaa727 wrote:PW100 wrote:Revelation wrote:And then you add that to the (astronomical) cost of housing in the SEA area and realize few will chose to move there just to work for Boeing.
Why would they need to move? Many enigneering tasks can be done from Brasil . . . it's a global industry, connected networks etc.
I don't believe he's talking about Embraer employees coming to Seattle, just the need to attract new talent in the States to work for Boeing in Seattle. If you're local talent pool is drying up (aging out, etc) you need to expand that pool. Unfortunately, Seattle has become so expensive the talent Boeing would need/does need to fill in the gaps, is not moving to the area. Therefore, you need to find new pools/locations to tap into where the infrastructure already exists and Embraer checks many of those boxes.
aerolimani wrote:Another worthwhile narrative is that Embraer, its product, and its corporate culture, are a better fit with Boeing. And similarly, the CSeries is a better fit with Airbus. Try to tell me there isn’t some truth in that.
LockheedBBD wrote:Source: https://leehamnews.com/2018/01/24/boein ... tor-737-7/
"Boeing aims for half of 100-150 seat sector with 737-7"
Boeing says that it expects the 737-MAX 7 to capture half the 100-150 seat market share. That leaves Embraer/Bombardier/Airbus to fight over the other 50%?
LockheedBBD wrote:"Boeing aims for half of 100-150 seat sector with 737-7" Boeing says that it expects the 737-MAX 7 to capture half the 100-150 seat market share. That leaves Embraer/Bombardier/Airbus to fight over the other 50%?
Revelation wrote:Yes, thanks, I was addressing the general issue of Boeing needing more human resources, and a lot of the need is for the mechanics who do hands-on work and so can't be remote workers. The Amazon HQ2 saga shows that the SEA area is not a great place to be looking for more human resources.
The Brazilian government received three signals from Boeing in the negotiation process with Embraer: guaranteeing the autonomy of the partnership between Saab and Embraer in the production of Gripen fighters; transformation of Brazil into a new hub for the production of components of Boeing aircraft outside the United States; and maintenance, as required by the Brazilian authorities, of the veto power of the government in the company of São José dos Campos (SP).
The message is that Boeing agrees with the protection of the Gripen project, which would remain autonomous even with eventual deal between the two companies. One of the arguments for the autonomy of the Gripen project is that Boeing and Saab have been partnering since 2013 in the US in the development and manufacture of the T-X - military training aircraft - and that the project has not generated any conflict between companies.
The company also signaled that it accepts to maintain the veto power of the Brazilian government - through the so-called golden share - on the future of the Brazilian company's business. It is not entirely clear on what terms, since the design of the business between Embraer and Boeing is still at the beginning and not even reached the political top of the government.
Parts
In order to garner support for the negotiations, it has been indicated that if the transaction is closed, Brazil could be the fourth pole of production of Boeing components, alongside Australia, Canada and the United Kingdom.
https://exame.abril.com.br/negocios/boe ... m-embraer/