Embraer, a Brazilian aircraft manufacturer, who has escaped the 50% tariff imposed by the United States, rules out layoffs here in the country this year and is confident of reducing the current 10% tax on aircraft and parts that exports to Americans.
The statement was made on Tuesday (5) by the company’s executive director, Francisco Gomes Neto, during presentation of the results of the second quarter of the company.
“Our focus is on really restoring the zero fare. We are very happy to go from 50% to 10%, which has greatly reduced the impact to our customers. We are working with them to deliver the aircraft. But in parallel, we are striving hard to restore zero fare,” he said.
Embraer employs 18,000 people in Brazil. Since April, the company, which exports half production to the United States, is subject to a 10% rate determined by the US President Donald Trump.
In recent weeks, there has been a fear that the taxation will rise to 50%. But on Wednesday (30), the US government has decided that aircraft, engines, pieces and aviation components are left out of the tariff.
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Job
According to the company, the 10% charge that began to effective in April means a cost of $ 65 million, about $ 350 million. Of this impact, 20% were felt in the first half and 80% should be noticed in the remainder of the year. This amount is charged to parts of executive aircraft that Embraer sells to the company’s subsidiary in the United States, but it is a relief compared to the 50% tax from which the company has escaped.
“We go back to a more manageable situation, so much so that we have already included the impact of tariffs on our financial projections. We are keeping our guidance [projeção] For the year, and to serve you we have to deliver all the planes that are planned. At the moment, there is completely out of our plans any kind of change, frame reduction because of production reduction, ”said Neto.
Regarding commercial aircraft sold to the United States, the cost is paid by the company that buys the aircraft, which ends up making the product more expensive.
Francisco Neto said he believed that negotiations can bring back the zero fare, as in the last 45 years. He quoted agreements recently achieved by the United Kingdom and Europe.
According to Neto, the negotiations are through the Brazilian government and also directly with the Americans.
Main market
The United States is the largest aviation market in the world and absorb 70% of the demand for Embraer executive jets and 45% of commercial aircraft.
The company’s executive director points to employment and investment generation in the United States as a asset for the Trump government to return to the zero fare.
Embraer employs nearly 3,000 people on American soil. Including the local supplier chain, the contingent reaches 13,000. The company plans to invest US $ 500 million, about R $ 2.8 billion in Dallas, Texas, and Melbourne, Florida, over the next 5 years and hire another 5,500 employees by 2030. Estimates were made, according to Neto, on calculations without the 10%fare.
The executive said that if the US government decides to include military planes such as the KC-390 in its air fleet, Embraer projects another $ 500 million for a new assembly line and 2,500 jobs.
The company also emphasizes the importance of its E175 aircraft, up to 80 seats, considered essential for American regional aviation.
“We have a good expectation that this will happen,” says the executive director of the return of Zero fare, emphasizing that the estimate is a positive commercial balance of $ 8 billion for Americans by 2030. In the process of manufacturing aircraft, Embraer spends more shopping in the United States than on sales there.
Result
The result of the second quarter presented on Tuesday by Embraer points out that the company delivered 61 aircraft in the period, 19 commercial jets, 38 executives and four military. In the same period last year, there were 47.
The company works with the estimate of delivery of 77 to 85 commercial aircraft this year and from 145 to 155 executive jets. The total portfolio of orders reached US $ 29.7 billion in the second quarter of this year, the largest ever registered.
The company
Founded in 1969, Embraer has manufactured over 9,000 planes to over 100 countries and 60 armed forces. The company total 23,000 employees, 18,000 in Brazil, especially at the headquarters in São José dos Campos, in São Paulo. There are also contingent in the cities of São Paulo de Sorocaba, Botucatu and Gavião Peixoto, as well as engineers in Florianópolis and Belo Horizonte.
Outside Brazil and the United States, there is a factory in Portugal. In recent years, the company has hired 5,000 people to meet the current and future demand.
