Wichita is Worried: Embraer is moving in!
In a November 1 article in the Wichita Eagle, the story is not about the manufacturers of business aircraft based in Wichita. The story is about the new competitor in business aviation who happens to be 7000 plus miles to the south of Wichita in Brazil.
The article says “As Wichita planemakers grapple with the downturn in the business jet market, they’re keeping a keen eye on the competition. Embraer is coming directly after Wichita’s part of the market, experts say. Over the next 10 years, Embraer could take as much as 15 to 20 percent of the market away from Cessna Aircraft, Hawker Beechcraft and Bombardier Learjet, said Teal Group analyst Richard Aboulafia.”
The reporter goes on to quote the CEO of Hawker Beechcraft: “I’m very concerned about them,” Hawker Beechcraft CEO Bill Boisture said. “They’re entering with price points, size and performance carefully selected, in my view.”
The guys in Wichita are worried. Worrying about the competition is maybe the ultimate compliment you can pay to them. But worrying about the competition doesn’t get you anywhere. I have been caught in that trap before and the only way out is to offer something of greater value to the market. It doesn’t hurt to ”keep a keen eye on the competition” but, ultimately, you have to create your own value and innovation to succeed.
As an operator of a fleet of charter and owner-managed aircraft, I started seriously looking at Embraer over two years ago. I first took notice when they showed up at our annual business aviation convention. When the regional sales manager, Cam Gowans, contacted us to set up a meeting to talk about his new jets I thought, “why not?” For whatever reason, our company had not received a lot of attention from the sales folks at the US business jet manufacturers; so, talking to a Brazilian business jet manufacturer representative was worth my time. At that time the US companies were sold out of production several years ahead of time; so, why did they need to pay attention to an aircraft charter company in Tennessee operating Learjets and Jetstreams?
In December of 2007, I was invited by Embraer to make a visit to their headquarters and factories in Brazil. The opportunity was to ride down on a Legacy 600 reposition flight and visit the factory for a few days. This was a first for me to get invited to visit a manufacturer to tour their facilities and meet their people; so, I went.
Here is what I learned from that visit:
- Embraer has it together with both engineering and manufacturing knowledge and infrastructure that was built on 30 plus years of manufacturing regional airliners.
- Embraer is here to stay and will take market share with these new efficient, reliable and durable business jets. They are built better, priced better and operate at a lower cost!
- The competition here in the US had better wake up or they will find themselves in second place. Remember those little Japanese car companies of the 60’s and 70’s called Toyota and Honda?
Our company ended up placing an order for three new jets to be put into service for charter. Why Embraer? Because dollar for dollar these guys are making the best of a new breed of business jets.
The Brazilians have clearly come to play and have jumped out in front; but, it is not too late for the guys in Wichita to do something about it!
6 Responses
to “Wichita is Worried: Embraer is moving in!”
2 Trackback(s)
- Nov 18, 2009: uberVU - social comments
- Nov 18, 2009: Brésil services » Wichita is Worried: Embraer is moving in! | Plane Conversations
Great post. Reference to US manufacturing experience in the auto industry spot on. Sadly I fear that the US manufactures will struggle to ever catch up. The momentum has shifted and that is always hard to recover from.
It is a strange dichotamy that we see regarding manufacturing in the United States and Brazil. While those in power seem “hell bent” to destroy the last bastion of a leading US manufacturing industry, an up-and- coming country like Brazil seeks to expand its manufacturing base worldwide.
It has been known for years that the rest of the world is not going to sit idly by while the U.S. manufacturing base shrinks. First it was Japan, then China and now Brazil. South America has been ignored for years at our own economic peril. Brazil wants to be a player on the world stage. With a stable economy and soon flush with money from its huge oil finds, Brazil is quickly becoming an economic power in the hemisphere.
There is no denying the the Phenom 100 and soon 300 are expertly built and marketed aircraft. The Brazilians correctly assumed the future of the market, while US manufacturers sat on their laurels in 2007 and 2008 with billions in back orders and found themselves once again flat footed as the market changed rapidly. While I believe that the Citation Mustang and CJ4 represent good products and certainly the best from Wichita, Cessna has simply failed to capture the same buzz because of the constant media scrutiny from the national press and a less than effective marketing plan.
I have had a chance to sit in the Phenom 100 and Phenom 300 and both really show Embraer listening to both customers and pilots. The cockpit and cabin are well laid out, bright and airy and made of high quality materials. Even though the 100 is in the “light jet” category, it looks far bigger on both the inside and the outside. They will make exciting additions to any corporate or charter fleet.
The challenge now is how Cessna, Beechcraft and Gulfstream can recapture the lead. The first step is to get past the political rhetoric and effectively market their aircraft as the best in the world. Show “real world” comparisons to the competition and PROVE how their products are better. This type of marketing needs to be done NOW. More light jet and larger aircraft are on the way from other companies (such as the HondaJet). If action is not taken immediately, we run the risk of the same kind of scenario that devestated the auto industry in the last 30 years.
Thank you,
very interesting article
Nicely article