Boeing, Embraer reportedly in talks to bring KC-390 production to US

By: Valerie Insinna

WASHINGTON — Boeing and Brazilian aerospace company Embraer are reportedly discussing the prospect of building an assembly line for Embraer's KC-390 cargo planes in the United States.

According to Brazilian newspaper Valor Economico, which first reported the talks on Oct. 1, and a subsequent Reuters story, the two companies see a U.S. KC-390 plant as part of a larger defense-related joint venture.

The discussions on KC-390 follow a July agreement that gave Boeing an 80 percent stake in Embraer's commercial business, and it was widely speculated that a similar deal on the companies' defense business hammered out in the coming months would involve greater cooperation with Boeing on KC-390.

Jackson Schneider, president and CEO of Embraer Defense & Security, told Defense News this July that more information about a Boeing-Embraer tie up on KC-390 could be revealed later this year.

Boeing and Embraer established agreements in 2012 and 2014 that allow the U.S. firm to have a hand in global marketing and logistics support of the KC-390, but a defense-related joint venture would allow for “much broader collaboration,” he said.

“Boeing has fantastic experience, [and] the KC-390 is a fantastic plane; it is a game-changer,” he said at Farnborough Airshow. “But I understand that we don't have a substantial number of clients yet because we are in the certification phase. For sure I think that the Boeing presence in the market is very complementary of what we have. It will enlarge significantly our opportunities in terms of sales.”

The KC-390 is a multi-mission aircraft built to haul cargo, transport passengers, insert special operators and refuel other aircraft, among other uses. However, Embraer has struggled to draw serious interest from international buyers and Brazil currently remains its only customer — although the aircraft has prospects in Portugal and New Zealand and with a commercial aviation services company.

“A decision to build the aircraft in the U.S. would likely only be undertaken if Boeing/Embraer could sell KC-390 to the [U.S.] Air Force, Navy, or Marine Corps,” wrote Byron Callan of Capital Alpha Partners in an email.

That could be a tall order, as the U.S. services historically have operated Lockheed Martin's C-130 Hercules for the same purpose and are either in the process of replacing old variants with new ones, or lack the money to replace old C-130s and plan to recapitalize them instead.

The U.S. Air Force is upgrading active units' older C-130 models to the newest C-130J Super Hercules, but the service does not have the funding to expand the current C-130J program of record and will have to upgrade some C-130H models, said Lt. Gen. Jerry Harris, the services deputy chief of staff for strategic plans and requirements, during a Sept. 28 hearing in front of a subcommittee of the House Armed Services Committee.

Meanwhile, the Navy plans to replace its C-130T fleet with 25 new KC-130Js in the early 2020s, Rear Adm. Scott Conn, the service's director of air warfare, said in the hearing.

https://www.defensenews.com/air/2018/10/04/boeing-embraer-reportedly-in-talks-on-bringing-kc-390-production-to-us