Embraer: The Brazilian Aircraft Manufacturer's Turnaround and Growth
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Case Details:
Case Code : BSTR243
Case Length : 31 Pages
Period : 1969-2006
Pub Date : 2007
Teaching Note : Available
Organization : Empresa Brasileira de Aeronáutica S.A
Industry : Aerospace
Countries : Brazil
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Embraer Launches New Business Jet Contd...
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After some initial successes, the company ran into trouble in the late 1980s,
and was privatized in 1994. Under private management, Embraer concentrated on
developing regional jets, which pitted it directly against Canada-based
Bombardier (the first company to introduce regional jets) in the aviation
market. Embraer made a major foray into business jets with the successful launch
of its Legacy 600 in 2000. After this, analysts said that the company was well
positioned to take advantage of the rapidly growing market for small and
mid-sized aircraft and business jets in the early 2000s. In 2005, Embraer had a
net income of $446 million from revenues of $3.8 billion, and employed nearly
17,000 people (Refer Exhibit III for Embraer's key performance indicators).
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Background Note
Embraer was set up on July 29, 1969 by Brazil's Ministry of Aeronautics. It was
the culmination of the country's aviation ambitions,9 which began to take shape
in the 1940s when the Brazilian government formed the General Command for
Aviation Technology (CTA - Centro Técnico Aeroespacial) in 1946, and the
Aeronautics Technological Institute (ITA - Instituto Tecnológico de Aeronáutica)
in 1950.
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The CTA was a unit of the Brazilian Air Force, and
was the national military research center for aviation and aerospace. It
coordinated all technical and scientific activities related to aerospace
on behalf of the Brazilian Ministry of Defense. The ITA was a
government-sponsored engineering institution and one of the most
prestigious colleges in Brazil. It was set up by the Brazilian
government to nurture and develop engineering talent in the country. It
was a part of the CTA, and its facilities, including its laboratories
and R&D centers, were located on the CTA campus. Both the CTA and the
ITA played an important role in the 1950s with respect to aeronautical
training and development in Brazil... |
Excerpts >>
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