http://www.sun-sentinel.com/business/local/sfl-zembraer04aug04,0,6659642.story?coll=sfla-business-headlines,
Brazilian aircraft maker Embraer won its first U.S. defense contract and will soon make jets in Jacksonville as part of a group filling an initial $879 million order.
The Army deal marks a milestone for the Brazilian export giant that runs its U.S. sales and marketing operations from Fort Lauderdale.
Embraer set its sights two years ago on American defense contracts to expand on its line of surveillance planes already produced for Brazil, Mexico and Greece, spokesman Doug Oliver said Tuesday.
Industry analysts lauded the contract as a key endorsement that should help the Brazilian jet maker expand its military sales worldwide.
“It's pretty extraordinary. Almost no foreign companies, other than British ones, ever have access to U.S. defense contracts,” said Richard Aboulafia, vice president of analysis at Teal Group, an aerospace consultancy in Fairfax, Va.
Investors seemed to cheer the deal too. Embraer stock rose Tuesday in Brazil to 22 reais, up by 45 centavos and near its 52-week high of 26.76 reais.
The Army chose a group led by Lockheed Martin Corp. and featuring Embraer over a rival team led by Northrop Grumman Corp. to develop a new “Aerial Common Sensor System” — essentially a spy plane filled with sensors to monitor enemy communications and troop movements.
An initial $879 million contract calls for developing five planes, with testing planned for 2006. Full production of likely 50 planes would start later, with contracts expected to top $7 billion over 20 years.
Embraer will produce jets for the Army based on its 50-seat, ERJ-145 platform, already widely used by commercial airlines for short routes.
To meet U.S. military requirements, Embraer will produce the platform on American soil — at a plant now being built in Jacksonville.
Plans call for employing 150 to 200 people at the north Florida facility, Oliver said.
Started after World War II by Brazil's military, now privatized Embraer posted $2.1 billion in sales and $136 million in profits last year, ranking as the world's fourth largest commercial aircraft maker.
As of June 30, the company employed about 14,200 people worldwide, including 200 in Fort Lauderdale.
