EMBRAER - KC - 390

lcafanboy

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Dec 22, 2017
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These babus become vocal only after retirement. Could have done far more with in service.

Expecting govt to invest in some foreign company is asking too much. It should be tied up with assured orders. Be it military or civil. Else these will remain just gossips.
We have our own huge requirement be it MTA KC390 fits in, it can also be used for mid air refueller, DRDO awacs, Netra, etc. KC390 can also be used for civilian needs. Embraer has huge variety of civilian aircrafts which can be used by indian carriers. For Brazil HAL has very good helicopter division and lch, rudra, Dhruv, future medium helicopter, etc. Also fighters like Tejas, MWF, AMCA can be a good proposition. A joint international marketing will help give it a financial muscle and establish the joint venture as a global aviation giant. A win win situation for both countries and companies.....🤔
 

ni8mare

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Dec 7, 2017
241
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We have our own huge requirement be it MTA KC390 fits in, it can also be used for mid air refueller, DRDO awacs, Netra, etc. KC390 can also be used for civilian needs. Embraer has huge variety of civilian aircrafts which can be used by indian carriers. For Brazil HAL has very good helicopter division and lch, rudra, Dhruv, future medium helicopter, etc. Also fighters like Tejas, MWF, AMCA can be a good proposition. A joint international marketing will help give it a financial muscle and establish the joint venture as a global aviation giant. A win win situation for both countries and companies.....🤔
In addition
Long range ASW ....like P-8I
Maritime bomber ....add a AESA radar (preferably UTTAM) and some couples of Brahmos (600 KM) place them in CAR which extend range of IN in South China Sea and see the crying of chinis
 
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lcafanboy

Senior member
Dec 22, 2017
1,320
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Bangalore
In addition
Long range ASW ....like P-8I
Maritime bomber ....add radar and some couples of Brahmos place in CAR and see the crying of chinis
Further we can also involve Tata, Taneja and Mahindra aviation division to make it even bigger.

Export market is huge for both countries and companies. Entire South America, America, Canada focused by brazilian division. ASEAN, SAARC, Asia, Africa, middle East, central Asia, etc by india division.

There is a huge market for 50 to 150 upto 200 seat single aisle civilian aircrafts for feeder airports in india and abroad where both Both can give Boeing and Airbus a run for their money....☺🤔
 
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Vicky

Rajaraja Chola
Dec 1, 2017
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India will not even try to quote for Embrear. Multiple reasons.
1. Getting an exclusive govt entity to buy a foreign company or to take a stake has never happened in India. There is no precedent especially in defence.
2. Opposition will cry corruption especially how the value was reached. We also cannot guarantee zero corruption in our politicos bureaucrats nexus. No business will share how they arrived that value to prevent hostile counter offers. But since it's govt money, opposition will cry.
3. With Covid-19 situation, India is expected to loosen her purse string wrt Fiscal deficits. That means that atleast for the next 2 years it will be budget tightrope. GST, tax collections will also be hit. Govt has to find alternative sources of income.
4. All these are valid concerns if and only if Brazil govt agrees to sell it to HAL/Indian companies. Embraer agreed into this JV only cos they saw an future with Boeing, jobs being protected and Boeing has the capacity to market her planes and pump in money. What does HAL brings to Embraer stable other than money? They can't market their planes, can't guarantee their jobs in the future more importantly will be reluctant to share their IP with a country that doesn't manufacture planes. Brazil's opposition and unions will year them apart.

5. If and if Brazil overcomes all obstacles and still agrees to sell, the value will be more than 4.2B as again HAL combo brings nothing to the table to protect future Embraer jobs in Brazil. HAL/MoD will try to bring her manufacturing and some part of development to India. Whether Indian carriers will opt for Embraer design is another issue. China won't be sitting for too long. I somehow feel China is going to take her. India had a wonderful opportunity to take over Bombardier division for just 550m. That was the cheapest.
 

_Anonymous_

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Dec 4, 2017
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India will not even try to quote for Embrear. Multiple reasons.
1. Getting an exclusive govt entity to buy a foreign company or to take a stake has never happened in India. There is no precedent especially in defence.
2. Opposition will cry corruption especially how the value was reached. We also cannot guarantee zero corruption in our politicos bureaucrats nexus. No business will share how they arrived that value to prevent hostile counter offers. But since it's govt money, opposition will cry.
3. With Covid-19 situation, India is expected to loosen her purse string wrt Fiscal deficits. That means that atleast for the next 2 years it will be budget tightrope. GST, tax collections will also be hit. Govt has to find alternative sources of income.
That's the reason why the Govt must play the role of both - an intermediary & minority stake holder thru HAL with some big industrial house acting as a major stake holder cum financier. Of course, it also has to be borne in mind that apart from settling current liabilities, the stake holders would also have to weather a few more years before the world economy gets on it's feet again.


4. All these are valid concerns if and only if Brazil govt agrees to sell it to HAL/Indian companies. Embraer agreed into this JV only cos they saw an future with Boeing, jobs being protected and Boeing has the capacity to market her planes and pump in money. What does HAL brings to Embraer stable other than money? They can't market their planes, can't guarantee their jobs in the future more importantly will be reluctant to share their IP with a country that doesn't manufacture planes. Brazil's opposition and unions will year them apart.
HAL brings with it the entire Indian market. Of course this has to be backed up by the GoI in assuring both Embraer & the Brazilian government that it'd frame the ground rules in such a way that if the HAL - Embraer -" Indian Entity A " JV occurs they'd have a headstart in both the civilian & defense transport sector. I think this in itself can guarantee taking care of the Brazilian factories of Embraer as even if the JV takes shape transfer of all facilities to India for manufacturing won't happen overnight.

5. If and if Brazil overcomes all obstacles and still agrees to sell, the value will be more than 4.2B as again HAL combo brings nothing to the table to protect future Embraer jobs in Brazil. HAL/MoD will try to bring her manufacturing and some part of development to India. Whether Indian carriers will opt for Embraer design is another issue. China won't be sitting for too long. I somehow feel China is going to take her. India had a wonderful opportunity to take over Bombardier division for just 550m. That was the cheapest.
There's some confusion regarding the evaluation. Apparently, when the deal was inked the valuation was USD 4.2 billion whereas it's close to USD 1.1 billion as per today's market scenario. At least this is the argument Boeing used to hard bargain & back off the deal when Embraer refused to budge.

Now, whether this was a negotiating tactic employed by Boeing to wriggle out of an inconvenient contract in today's scenario given Boeing's own problems thanks to Boeing MAX & other issues preceding the Chinese virus now compounded due to it or if the valuations offered by Boeing actually reflect ground realities is unknown. But these are the rumors doing the rounds online.

In any case, I don't think India would get it at a valuation of USD 1.1 billion. Knowing the Chinese, they'd bargain too although they are better placed than India by virtue of the fact that they're loaded & they already have a JV going with Embraer which gives them a huge advantage. This may also mean an auction for price discovery.

However, The real issue is whether the Brazilian government is comfortable selling it to the Chinese as they have the veto rights here. Preliminary reports from media certainly seem to suggest this.Moreover, the US administration would play a key role here as given the outright hostile relationship between the US & China right now, it has to be borne in mind that Embraer buys a lot of components including engines from the US. The US does enjoy enormous leverage over Embraer. Hence even if one assumes an auction , there's no guarantee the Chinese would be part of it.
 
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_Anonymous_

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ni8mare

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5. If and if Brazil overcomes all obstacles and still agrees to sell, the value will be more than 4.2B as again HAL combo brings nothing to the table to protect future Embraer jobs in Brazil. HAL/MoD will try to bring her manufacturing and some part of development to India. Whether Indian carriers will opt for Embraer design is another issue. China won't be sitting for too long. I somehow feel China is going to take her. India had a wonderful opportunity to take over Bombardier division for just 550m. That was the cheapest.
We only need stake in KC-390 and any one/two defunct civil aircraft for which India has both market and capital (private and government) to pump in, Boeing offer was stake in whole embraer, we don't need that. Obviously we are going bring some (actually significant) part of manufacturing for the said items or they can sit on it.

Brazilian are not exactly comfortable with china and we all know why. After a few year they will leave embraer dry or do a hostile take over. we all know what chinis are doing to whole world

And even then embraer still go to chinis ...let them cry later on which is going to happen EVENTUALLY

2. Opposition will cry corruption especially how the value was reached. We also cannot guarantee zero corruption in our politicos bureaucrats nexus. No business will share how they arrived that value to prevent hostile counter offers. But since it's govt money, opposition will cry.
Let them cry Modi will win again in 2024

3. With Covid-19 situation, India is expected to loosen her purse string wrt Fiscal deficits. That means that atleast for the next 2 years it will be budget tightrope. GST, tax collections will also be hit. Govt has to find alternative sources of income.
True which is why it should be both HAL and group of private industries will be needed

4. All these are valid concerns if and only if Brazil govt agrees to sell it to HAL/Indian companies. Embraer agreed into this JV only cos they saw an future with Boeing, jobs being protected and Boeing has the capacity to market her planes and pump in money. What does HAL brings to Embraer stable other than money? They can't market their planes, can't guarantee their jobs in the future more importantly will be reluctant to share their IP with a country that doesn't manufacture planes. Brazil's opposition and unions will year them apart.
As I said we dont need whole embraer only stake in some part of its product for which India has both huge market (civil and military) and capital. And where would boeing going to sell them in market either India or chinis in large numbers.

HAL bring huge Indian market, we do need KC-390 in large number for millitary and so do civil airline, which will either go to boeing (P8, KC 46 etc) or airbus (A330, C295 etc), they can sit on it or loose to boeing / airbus or they can work with HAL/private industries.

For rough estimate we need 12-15 air-refueler, P8 like ASWs another 12-16 , then transport for army and airforce, if IN wants to get serious power projection in SCS 6-10 maritime bomber, easily 80-100....that 5 - 6 Bn $ (if per piece is 55 mn $) worth of aircraft not to mention international for pitching against C-130
 

Vicky

Rajaraja Chola
Dec 1, 2017
336
363
Canada
We only need stake in KC-390 and any one/two defunct civil aircraft for which India has both market and capital (private and government) to pump in, Boeing offer was stake in whole embraer, we don't need that. Obviously we are going bring some (actually significant) part of manufacturing for the said items or they can sit on it.

Brazilian are not exactly comfortable with china and we all know why. After a few year they will leave embraer dry or do a hostile take over. we all know what chinis are doing to whole world

And even then embraer still go to chinis ...let them cry later on which is going to happen EVENTUALLY


Let them cry Modi will win again in 2024



True which is why it should be both HAL and group of private industries will be needed



As I said we dont need whole embraer only stake in some part of its product for which India has both huge market (civil and military) and capital. And where would boeing going to sell them in market either India or chinis in large numbers.

HAL bring huge Indian market, we do need KC-390 in large number for millitary and so do civil airline, which will either go to boeing (P8, KC 46 etc) or airbus (A330, C295 etc), they can sit on it or loose to boeing / airbus or they can work with HAL/private industries.

For rough estimate we need 12-15 air-refueler, P8 like ASWs another 12-16 , then transport for army and airforce, if IN wants to get serious power projection in SCS 6-10 maritime bomber, easily 80-100....that 5 - 6 Bn $ (if per piece is 55 mn $) worth of aircraft not to mention international for pitching against C-130
Embraer has 3 companies. Only the civil aircraft manufacturing deal with Boeing has fallen. The deal with Boeing for 49% share for KC130 is still on as Boeing wants an ac to challenge LM C130. That deal isn't off. But considering the bad blood now experts believe that military deal might also fail sometime in the future. As for now we don't have that option yet.

Trust me if Brazil govt wants to have 50-50 strategic partnerships with India I am also good with it. But Indian govt has to make a push without which it's all fantasy.
 
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Vicky

Rajaraja Chola
Dec 1, 2017
336
363
Canada
That's the reason why the Govt must play the role of both - an intermediary & minority stake holder thru HAL with some big industrial house acting as a major stake holder cum financier. Of course, it also has to be borne in mind that apart from settling current liabilities, the stake holders would also have to weather a few more years before the world economy gets on it's feet again.




HAL brings with it the entire Indian market. Of course this has to be backed up by the GoI in assuring both Embraer & the Brazilian government that it'd frame the ground rules in such a way that if the HAL - Embraer -" Indian Entity A " JV occurs they'd have a headstart in both the civilian & defense transport sector. I think this in itself can guarantee taking care of the Brazilian factories of Embraer as even if the JV takes shape transfer of all facilities to India for manufacturing won't happen overnight.



There's some confusion regarding the evaluation. Apparently, when the deal was inked the valuation was USD 4.2 billion whereas it's close to USD 1.1 billion as per today's market scenario. At least this is the argument Boeing used to hard bargain & back off the deal when Embraer refused to budge.

Now, whether this was a negotiating tactic employed by Boeing to wriggle out of an inconvenient contract in today's scenario given Boeing's own problems thanks to Boeing MAX & other issues preceding the Chinese virus now compounded due to it or if the valuations offered by Boeing actually reflect ground realities is unknown. But these are the rumors doing the rounds online.

In any case, I don't think India would get it at a valuation of USD 1.1 billion. Knowing the Chinese, they'd bargain too although they are better placed than India by virtue of the fact that they're loaded & they already have a JV going with Embraer which gives them a huge advantage. This may also mean an auction for price discovery.

However, The real issue is whether the Brazilian government is comfortable selling it to the Chinese as they have the veto rights here. Preliminary reports from media certainly seem to suggest this.Moreover, the US administration would play a key role here as given the outright hostile relationship between the US & China right now, it has to be borne in mind that Embraer buys a lot of components including engines from the US. The US does enjoy enormous leverage over Embraer. Hence even if one assumes an auction , there's no guarantee the Chinese would be part of it.
Well yes. Who are we going to push? Tatas already have liabilities. Guess can ask Mahindra, L&T, HAL to come forward to form a JV. I think indian govt has some time like 6 months to discuss/form a JV to bid for Embraer civilian ac discussion.

As for HAL has entire Indian market, Indian airliners are reluctant to buy Embrear turboprops or their E2 jets as they don't want to diversify even before. Their E2 jets are like 60m and no Indian companies are interested. Even if HAL buys and manufacture it here it will be lil bit more costly than what it is currently. But we can convince them with lower maintainence cost and Local mro facility. If WTO is not there we can also sell tax free 😅.

The one tricky part is the Boeing deal for military ac KC130 is still on as Boeing wants an c130 competitor. It wants it. But there.has been a lot of bad blood lately. It's this thing we should concentrate on.
 
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ni8mare

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The deal with Boeing for 49% share for KC130 is still on as Boeing wants an ac to challenge LM C130. That deal isn't off.
I think its been already collapsed


Boeing and Embraer were also looking to establish a separate joint venture involving Embraer’s C-390 military transport. While Boeing is backing out of an agreement to take a 49% stake in that program, the U.S. company said it would continue to cooperate with Embraer to market the C-390 internationally under a deal struck in 2012.
 

_Anonymous_

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Dec 4, 2017
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Well yes. Who are we going to push? Tatas already have liabilities. Guess can ask Mahindra, L&T, HAL to come forward to form a JV. I think indian govt has some time like 6 months to discuss/form a JV to bid for Embraer civilian ac discussion.

As for HAL has entire Indian market, Indian airliners are reluctant to buy Embrear turboprops or their E2 jets as they don't want to diversify even before. Their E2 jets are like 60m and no Indian companies are interested. Even if HAL buys and manufacture it here it will be lil bit more costly than what it is currently. But we can convince them with lower maintainence cost and Local mro facility. If WTO is not there we can also sell tax free 😅.

The one tricky part is the Boeing deal for military ac KC130 is still on as Boeing wants an c130 competitor. It wants it. But there.has been a lot of bad blood lately. It's this thing we should concentrate on.
Well, the fact that this issue is headed to arbitration means that we have plenty of breathing time to fine tune our plans. We can easily get a year or more to do so.

As I remarked earlier, this initiative from India's side would consist of 3 parts

* The government acting as both intermediary / facilitator & minority stake holder by getting a pvt enterprise or enterprises to enter into a deal with Embraer. Ideally, HAL should be involved as a minor stake holder too - to acquire in depth knowledge of design & construction of civilian aircrafts & hand holding of the Indian major stake holder for the first few years regarding the technicalities of running an aerospace company.
It could even be RIL apart from the ones you've named. As of now, in spite of their debts they seem to be one of the few ones with a sound balance sheet & financial backing apart from ratings.

* This would involve GoI stepping in & manipulating / framing rules in such a manner as to get civilian airliners to favor domestic aerospace companies over foreign ones. The GoI can even lean on civilian airliners to favour domestic products. Hell, they can even sound them out, while doing due diligence.

There is a vast difference between prices quoted & the prices at which they're finalised. It all depends on the quantum of business that Embraer can be guaranteed by both our civilian & military aerospace operators.

* The 3rd part would involve dangling a carrot of the KC -130 deal with Boeing being terminated and amalgamated with this deal for anything to progress.

Finally , in my concluding remarks, let me draw your attention to the Russian Aerospace eco system. They've been manufacturing civilian aircrafts too which ever since the collapse of the former SU & before. Yet these jets have seen service almost exclusively in Russia except for some numbers in China & the rest of the world.Why do you think China's case would be much different?

I don't think China playing the knight in the shining armor solves Brazil's or Embraers dilemma except if China guarantees enough numbers to them for purchase within China. As of now it's not clear if China has a requirement for anything out of Embraer's portfolio given that their own domestic plans for Indigenizing plane manufacturing seems pretty advanced to accommodate Embraer & the fact that China & Russia have already signed a JV a year ago to develop the RTA directly in competition to Embraer.

Embraer is stuck between a rock & a hard place. The JV with Boeing was the ideal one. They don't seem to have a fit in for their business plans with any other suitor. India is the dark horse here though having said that there are indeed too may variables to be considered on our side before clarity can set in.
 
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Ashwin

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Nov 30, 2017
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We have our own huge requirement be it MTA KC390 fits in, it can also be used for mid air refueller, DRDO awacs, Netra, etc. KC390 can also be used for civilian needs. Embraer has huge variety of civilian aircrafts which can be used by indian carriers. For Brazil HAL has very good helicopter division and lch, rudra, Dhruv, future medium helicopter, etc. Also fighters like Tejas, MWF, AMCA can be a good proposition. A joint international marketing will help give it a financial muscle and establish the joint venture as a global aviation giant. A win win situation for both countries and companies.....🤔
Of course, there are opportunities. But you shouldn't be mixing civil and military aviation.

On military only real opportunity is KC390. It fits the MTA but the IAF is not eager to pursue at this time of cash crunch (Remember C295 and Il-76 MUL are a current priority for transport fleet). KC390 cannot replace A330 for DRDO AWACS or MMRT. Netra is already done why do we need to modify another platform if there is no client. Major projects like AMCA, MWF will never be a partnership effort. On IMRH, what can they offer? HAL is far more experienced here.

In civil aviation, only imagination is your limitation. If you can set up a new SPV with significant private participation and serious tax breaks then E-Jet E2 will get sold like hot bread on the first days of lockdown. On the Brazilian side, its a win-win opens up the second-biggest market and gives liquidity. We can even dream of a narrow-body jet-airliner by early 2030. But to pull off something like this will need serious political will.

People keep forgetting HAL is an MoD company. They should be separated from the civil side. HAL will never be efficient and profitable in a cut-through global civil aviation market. We have nothing on the civil side (NAL is a CSIR lab). We need significant private investment with astute government leadership here. Because its a different kind of market. Its totally globalized, technology is hard to master and its capital intensive. You can't just open up the market for all and hope some will come out winning like that of telecom or IT. I mean its already open and main industrialists are making biplanes and wings for some swiss company.

On the downside, Is it worth the effort from the government's point of view? Embraer at its peak had only ~20,000 employees. Can't you just put the same money to an employment generation industry like textiles? Competition in the civil avaition is so bad that do you expect them to be profitable in 10-15 years? Are you gonna give these tax breaks indefinitely? Is there really a value in having a civil aviation company (backed by the public money) other than the national pride?. Remember in ten years we will pretty much have all the critical tech homegrown to serve the military.
 

RISING SUN

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Dec 3, 2017
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Of course, there are opportunities. But you shouldn't be mixing civil and military aviation.

On military only real opportunity is KC390. It fits the MTA but the IAF is not eager to pursue at this time of cash crunch (Remember C295 and Il-76 MUL are a current priority for transport fleet). KC390 cannot replace A330 for DRDO AWACS or MMRT. Netra is already done why do we need to modify another platform if there is no client. Major projects like AMCA, MWF will never be a partnership effort. On IMRH, what can they offer? HAL is far more experienced here.

In civil aviation, only imagination is your limitation. If you can set up a new SPV with significant private participation and serious tax breaks then E-Jet E2 will get sold like hot bread on the first days of lockdown. On the Brazilian side, its a win-win opens up the second-biggest market and gives liquidity. We can even dream of a narrow-body jet-airliner by early 2030. But to pull off something like this will need serious political will.

People keep forgetting HAL is an MoD company. They should be separated from the civil side. HAL will never be efficient and profitable in a cut-through global civil aviation market. We have nothing on the civil side (NAL is a CSIR lab). We need significant private investment with astute government leadership here. Because its a different kind of market. Its totally globalized, technology is hard to master and its capital intensive. You can't just open up the market for all and hope some will come out winning like that of telecom or IT. I mean its already open and main industrialists are making biplanes and wings for some swiss company.

On the downside, Is it worth the effort from the government's point of view? Embraer at its peak had only ~20,000 employees. Can't you just put the same money to an employment generation industry like textiles? Competition in the civil avaition is so bad that do you expect them to be profitable in 10-15 years? Are you gonna give these tax breaks indefinitely? Is there really a value in having a civil aviation company (backed by the public money) other than the national pride?. Remember in ten years we will pretty much have all the critical tech homegrown to serve the military.
 

randomradio

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Nov 30, 2017
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The best bet is for RIL to buy up ADAG's DRAL stake and then buy Embraer. Right now they have the money to splurge.

But of course, the IAF should give them a bit of market share, like a replacement for the IL-214.
 
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_Anonymous_

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Neither will UK nor will the US allow either RR or GE to sink much less allow India a stake leave alone a controlling one at that. These are crown jewels of both nations. Ever since UK allowed the ToT of jet engines to the former USSR under Atlee in the late 40's only to deeply regret it, they've derived the right lessons & aren't going to repeat it ever.
 
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