Embraer Claims It Hasn’t Given Up on China Talks

 - October 7, 2010, 11:45 AM

Brazil’s Embraer remains in negotiations with Chinese authorities over the prospect of building E-Jets at the Harbin-Embraer plant in Harbin, China, a company spokesperson told AIN today. The spokesperson contradicted a Dow Jones report published today indicating that Embraer will close the factory in Harbin in March, following delivery of the last 50-seat ERJ-145 on backlog. “We’re still in discussions [with the Chinese],” said the spokesperson, who nevertheless acknowledged that if Embraer and the Chinese authorities do not come to terms by the time the last airplane rolls out of the factory, the joint venture would likely dissolve.

The Dow Jones article cited a report by Brazilian news agency Estado, which attributed its information to Embraer vice president of commercial aviation Paulo Cesar de Souza e Silva. According to Estado, Souza e Silva said that Brazilian president Luiz Inacio Lula da Silva wrote a letter to the Chinese government about the matter but that he received no reply.

Last winter Embraer had given itself until the middle of this year to reach an agreement with its Chinese partners about adapting its assembly line in Harbin to build 70- to 110-seat E-Jets. “We think by mid-2010, that would be the deadline to start the implementation of the new tooling and training of people or [head in] a new direction,” Embraer executive vice president for new airline market programs Mauro Kern told AIN early this year. Although the Embraer executive mentioned “other possibilities,” he chose not to name them.

Since then, Embraer has said little about the negotiations and has declined several requests for interviews on the subject.

All signs point to an anemic or non-existent market for Harbin-Embraer ERJ-145s after the joint venture builds its last 50-seat jet next year. As the rate of 50-seat jet retirements continues to accelerate in North America and Europe, a robust supply of used airplanes appears likely to satisfy any demand that exists for the relatively fuel-thirsty jets in the rest of the world, including China.