Industrial production started to accelerateIf 2009 will be a contraction of GDP by 4Internally it is a decision in SeptemberAn activist even asked the drafting of a manifestThey were 130000 Native from free fatherlandThe result is that Enel now produces only 33 of the electricity in ItalyTheir social utility cannot go hand in hand with a bloated stock market liquidity3 billion pounds according to Merrill LynchSome 100 million of these machines have elapsed in the world He grows a lateralism form over functionFaced, like its competitors, with a collapse in its order book, the Brazilian plane-maker rapidly announced drastic measures, most notably a 20 reduction in staff, equivalent to 4,000 jobs, in a program that began in February 2009. In an interview with "Les Echos", the company's boss explains that he does not expect any recovery before 2011 and that he thinks this crisis will have long-lasting effects.
What is your strategy in the face of this crisis
All manufacturers, without exception, have seen a reduction in orders. We have adjusted our capacity. We have cut spending and investment. Unfortunately, we had to reduce staff numbers in order to adapt to the new realities of the market. The situation is bad, but we do not expect it to get much worse. We will remain in a difficult period until the market starts to recover in 2011. We expect 2009 and 2010 to be difficult years. However, we have already adjusted to these new challenges.
Will the Chinese market help you recover
China is only one of the pieces in the puzzle. Harbin Embraer, the joint venture between Embraer and AVIC, had a contract for 50 Embraer 145 with Grand China Express. This has now been halved.
Embraer also has a contract with Kumpeng covering 50 Embraer 190 planes. We have already delivered 5 of these and delivery of the remaining 45 depends on Chinese government approval and the issue of an import licence.
Is there a link with the crisis
Perhaps this serves to adjust the increase in the fleet somewhat, at a time when demand is not growing. But China has a free trade agreement with Brazil and we hope that these barriers will soon be removed.
Where are you on new projects such as the KC-390 military transport or the longer version of the Embraer 190-195
The transport contract has already been signed with the Brazilian military. This is a 1.3 trillion dollar contract and we hope that other contracts will follow both from Brazil and abroad. This project has export potential. However, the situation is very different for an enlarged version of the Embraer 190. Here, we merely have market studies. We will continue to monitor this market closely, as we have always done. But we have made no. decision to launch production of a bigger plane.
In the past, Embraer worked in partnership with Dassault in the production of fighter planes for Brazil. What is your approach going to be in the bidding process for the new Brazilian military contract, in which Dassault is involved
Our position on the FX2 bid is significantly different to that which we adopted for the previous contract. For FX1 we acted in partnership with Dassault and together offered the Mirage 2000 in competition with other plane-makers. At the moment we are not involved in the process, which means that the Brazilian government is free to choose the plane that best suits it. However, we could benefit from transfers of technology, and the winner of the selection process will have to work with Embraer... We have the skills necessary to integrate the chosen technologies between Brazil and the manufacturer.
Moreover, the issue of the assembly of the plane has not yet been settled.
This is one option that the Brazilian government could possibly take.
In such a case, Embraer would clearly be interested. But there has been no. undertaking on this point for the time being.
