THE NEW PRESIDENT of Embraer, Maurice Botelho, says that the newly privatised Brazilian manufacturer should return to sales of $700 million within five years, helped by an expansion in the European market.
"That's what we earned in the past, and there's no reason we can't earn it in the future," he said, speaking at the European Regional Airline Association annual meeting at Baveno, Italy.
Botelho became president on 27 September, and has made a dynamic start on reversing the fortunes of the company. Since privatisation in December 1994, Embraer has suffered heavily from the combined effects of the depressed regional-aircraft market, and the cost of developing the EMB-145 regional jet.
"We will be absolutely financially healthy within three years. We expect to break even by the first quarter of 1997," says Botelho. In 1994, Embraer turned in a net loss of $310 million on sales of only $177 million. Sales have fallen steeply since 1990, when the group turned over more than $580 million.
Botelho's first move has been to create five new profit centres (three geographical, plus light aircraft and government sales), each headed by what he calls an "entrepreneur", whose prime responsibility will be to improve the relationship between Embraer and its customers.
"We want to change our image somewhat, from that of being a technically based manufacturer to one that is concerned more with the customer," he says. Three new vice-presidencies have also been created, charged with finance, industrial development and strategic planning.
A further 1,700 layoffs have recently been added to the 1,200 jobs lost in the last three years. "We need to rebuild confidence now," says Botelho, who says that the workforce, now standing at 4,000, will probably remain stable, "or even grow", if market conditions allow.
The revival of the regional market, with its emphasis on regional jets, comes at a good time for Embraer. Botelho reveals that firm orders for the 50-seat EMB-145 regional jet now stand at 18, with another 19 options, and "120 letters of intent". The first unnamed European customer signed for three aircraft in early October, bringing the total number of European sales to 11.
Embraer plans to build 24 EMB-145s in 1997, the first full year of production. First deliveries are planned for late 1996, with four aircraft scheduled to be handed over, to launch customers by the end of the year. Production is due to reach two a month in 1997 rising to three in 1998.
Botelho says that the USA "...remains the largest area for growth", but adds that he intends to put considerably more emphasis on Europe, which now accounts for only 15% of total sales, against the USA's 60%.
A new European customer-support division is planned, possibly at Embraer's base in Le Bourget, France. "We're determined to put the resources where they are needed," he says. The centre would mirror a similar operation at Fort Lauderdale, Florida.
Source: Flight International