Embraer left with limited options after collapse of Boeing deal

When Embraer’s $4.2b joint venture deal with Boeing collapsed late last month, the Brazilian aircraft manufacturer was clear about its next steps.  Immediately, the company issued a sharp rebuke, accusing Boeing of manufacturing “false claims” in order to jettison the deal to acquire its regional jet business. It then launched arbitration proceedings, seeking to claw back tens of millions of dollars it had already spent in preparation. “We believe Boeing has engaged in a systematic pattern of delay and repeated violations of the [proposed deal], because of its unwillingness to complete the transaction in light of its own financial condition and . . . reputational problems,” Embraer said, in allegations that were denied by Boeing. The US group, in turn, accused Embraer of failing to fulfil preconditions of the deal. Beyond the fiery first response, however, the longer-term options for the Brazilian industrial champion are far from clear. The Boeing deal was years in the making and was expected to be a game-changer for both the sector and the company.  Embraer must now swiftly reorient and make crucial decisions about the direction of its business at a time when the industry is facing an unprecedented crisis. “They have a huge challenge,” said Ricardo Fenelon, a former director of the Brazilian Civil Aviation Agency. “The challenge is even bigger because of the Covid-19 situation, which is the largest crisis in the history of the sector.” Story has more details.<br/>