Military Acquisitions, Partnerships & Developments

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Kakarat
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Re: Military Acquisitions, Partnerships & Developments

Postby Kakarat » 28 Sep 2020 01:15


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Re: Military Acquisitions, Partnerships & Developments

Postby abhik » 28 Sep 2020 01:47

darshan wrote:There are items that could have certainly have been given by US from their various stocks even if just for the show purpose. So that's certainly a valid point. I have mentioned Javelin system before. Simple diversion of some in IA to be trained to use such systems opens up a possibility that chinese have to account for. Transport aircrafts are another example. Infrastructure building at favorable cost. Imports from India. All sorts of possibilities. The same of course applies to France and others too.

Post the collapse of the soviets 3 decades ago we lost our source of cheap weapons, but have not been able replaced it with another or build our own MIC in that time. Instead we resorted to huge imports on commercial terms (sometimes even eye gouging) coupled with reducing % of defence spending has landed us where we are. Massive gap in numbers and obsolesce. If we are serious (and if the US is too) we should ask them for a $20-50B interest loan (or some such arrangement) for weapon purchases from them over the next decade.

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Re: Military Acquisitions, Partnerships & Developments

Postby Prem » 28 Sep 2020 03:35

https://www.business-standard.com/artic ... 509_1.html
The Indian government is keen to buy Embraer’s commercial aircraft division, said a top-ranking government official. “We are very interested. We are exploring alternatives,” the official said, confirming a development reported earlier by Reuters on Brazil’s plans to reach out to India and China as possible new partners.One of the arrangements the government is considering is a tie-up with a sovereign fund to finance the deal. This is the first time the Indian government has expressed clear willingness to enter the deal.

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Re: Military Acquisitions, Partnerships & Developments

Postby darshan » 28 Sep 2020 03:54

Acquisition process of this will show hands of many countries with respect to china.

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Re: Military Acquisitions, Partnerships & Developments

Postby Kakarat » 28 Sep 2020 14:09

If India successfully buys Embraer’s commercial aircraft division it could be a great advantage for the Netra AEW&CS as embraer will be out of blacklist and a Indian controlled company

Later it could also lead the way for KC-390 partnership for HAL

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Re: Military Acquisitions, Partnerships & Developments

Postby Thakur_B » 28 Sep 2020 14:47

Kakarat wrote:
abhik wrote:Govt of India exploring options to buy Embraer's commercial aircraft biz
[Note: most of the article is behind a paywall]


Full article
http://www.travelbizmonitor.com/Trade-N ... raer-53102


Fingers crossed for this one.

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Re: Military Acquisitions, Partnerships & Developments

Postby Bharadwaj » 28 Sep 2020 15:27

It is only my opinion but having followed the civil aircraft industry, Embraer has nothing to offer India from a technological point of view. Hal/ADA is ahead of them in every technological parameter. This includes mastery over composites, fighter aircraft design, helicopter design etc etc. The c series nee a220 is running them out of the 75-125 seat aircraft segment. There is nothing to gain apart from boasting rights over the Han people. Today, its surprisingly the Russians who are on the cutting edge of transport/civil aircraft design with the first mass produced out of autoclave wings. Where they lack is service support. We should look to leapfrog in these area rather than buying into technology which we already have figured out. None of our airlines will really be interested in buying either the e jets or the new e2s. These are high Casm aircraft compared to the larger narrowbodys and lose out technologically to the a220. We have to build a civil aircraft industry ground up. There's no getting around it.

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Re: Military Acquisitions, Partnerships & Developments

Postby darshan » 28 Sep 2020 17:23

As kakarat mentioned above that it's all about compensating for NETRA mistakes. India has sizeable air market to reduce losses of this acquisition. Technically one may be ahead but other is ahead in producing and selling. There's also diplomatic angle about seeing if any nation does get into the way of getting fleet of AEWACS ready.

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Re: Military Acquisitions, Partnerships & Developments

Postby saumitra_j » 28 Sep 2020 17:50

One of the best news today:

The Defence Acquisition Council meeting held under the Chairmanship of Raksha Mantri Shri Rajnath today approved proposals for Capital acquisitions of various equipment required by the Indian Armed Forces at an approximate cost of Rs 2,290 crore. These include procurement from Domestic Industry as well as Foreign vendors.

Under the Buy Indian (IDDM) category, the DAC approved procurement of Static HF Tans-receiver sets and Smart Anti Airfield Weapon (SAAW). The HF radio sets will enable seamless communication for the field units of Army and Air Force and are being procured at an approx. cost of Rs. 540 crore. The Smart Anti Airfield Weapon being procured at an approx. cost of Rs. 970 crore will add to the fire power of Navy and Airforce.

Further, to equip the Frontline Troops of the Army the DAC also accorded approval for procurement of SIG SAUER Assault Rifles at a cost of approx. Rs.780 crore.

Source: MOD Press Release

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Re: Military Acquisitions, Partnerships & Developments

Postby Bharadwaj » 28 Sep 2020 18:20

darshan wrote:As kakarat mentioned above that it's all about compensating for NETRA mistakes. India has sizeable air market to reduce losses of this acquisition. Technically one may be ahead but other is ahead in producing and selling. There's also diplomatic angle about seeing if any nation does get into the way of getting fleet of AEWACS ready.


None of India's sizeable air market will likely be interested in what is being sold. We have a low cost low yield market that is perfectly tailored to the offerings of the A and B duopoly(a320 and 737). The last E jet operator in India was paramount and we know how that ended. It is a great aircraft for higher yield markets where the higher Casm cab be compensated for but even there it is facing a beating by the current state of the art which is the a220. If a strategic reason can be made out so be it but any potential embraer acquisition is not going to catapult us straight into the Civil market game profitably.

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Re: Military Acquisitions, Partnerships & Developments

Postby darshan » 28 Sep 2020 18:29

Bharadwaj wrote: If a strategic reason can be made out so be it but any potential embraer acquisition is not going to catapult us straight into the Civil market game profitably.


I believe that the word NETRA already has been used multiple times to stress what this is most likely about. The rest will be trying to figure out how to get the most out of it.

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Re: Military Acquisitions, Partnerships & Developments

Postby Bharadwaj » 28 Sep 2020 18:39

Netra can be integrated with any aircraft that size including ones which offer better performance in terms of range, altitude etc...We dont have to get into a bidding match with the Chinese to acquire a Boeing reject.

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Re: Military Acquisitions, Partnerships & Developments

Postby Kakarat » 28 Sep 2020 18:57

Bharadwaj wrote:It is only my opinion but having followed the civil aircraft industry, Embraer has nothing to offer India from a technological point of view. Hal/ADA is ahead of them in every technological parameter. This includes mastery over composites, fighter aircraft design, helicopter design etc etc. The c series nee a220 is running them out of the 75-125 seat aircraft segment. There is nothing to gain apart from boasting rights over the Han people. Today, its surprisingly the Russians who are on the cutting edge of transport/civil aircraft design with the first mass produced out of autoclave wings. Where they lack is service support. We should look to leapfrog in these area rather than buying into technology which we already have figured out. None of our airlines will really be interested in buying either the e jets or the new e2s. These are high Casm aircraft compared to the larger narrowbodys and lose out technologically to the a220. We have to build a civil aircraft industry ground up. There's no getting around it.


You are missing a point Embraer is not offering any technology but Embraer itself is being offered

There is no comparison between HAL/ADA and Embraer as the former is mostly Military aviation and later is mostly into Civil aviation. In India most of civil aviation developments are by NAL & ADA is purely Military

If its so easy to develop a civil aviation industry, SARAS first flight was in 2004 but still struggling & RTA is still a paper plane. The successful ALH Dhruv still doesn't have a civilian version. Developing a Civil aviation industry is not as simple as you think.

Why buy Embraer? Because you cannot buy Boeing or Airbus & Embraer is the third largest aircraft manufacturer of civil aircraft today

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Re: Military Acquisitions, Partnerships & Developments

Postby Bharadwaj » 28 Sep 2020 19:05

Kakarat wrote:
Bharadwaj wrote:It is only my opinion but having followed the civil aircraft industry, Embraer has nothing to offer India from a technological point of view. Hal/ADA is ahead of them in every technological parameter. This includes mastery over composites, fighter aircraft design, helicopter design etc etc. The c series nee a220 is running them out of the 75-125 seat aircraft segment. There is nothing to gain apart from boasting rights over the Han people. Today, its surprisingly the Russians who are on the cutting edge of transport/civil aircraft design with the first mass produced out of autoclave wings. Where they lack is service support. We should look to leapfrog in these area rather than buying into technology which we already have figured out. None of our airlines will really be interested in buying either the e jets or the new e2s. These are high Casm aircraft compared to the larger narrowbodys and lose out technologically to the a220. We have to build a civil aircraft industry ground up. There's no getting around it.


You are missing a point Embraer is not offering any technology but Embraer itself is being offered

There is no comparison between HAL/ADA and Embraer as the former is mostly Military aviation and later is mostly into Civil aviation. In India most of civil aviation developments are by NAL & ADA is purely Military

If its so easy to develop a civil aviation industry, SARAS first flight was in 2004 but still struggling & RTA is still a paper plane. The successful ALH Dhruv still doesn't have a civilian version. Developing a Civil aviation industry is not as simple as you think.

Why buy Embraer? Because you cannot buy Boeing or Airbus & Embraer is the third largest aircraft manufacturer of civil aircraft today



And what do we do with Embraer and its present portfolio which does not sell ? I never said it was easy to develop a civil aircraft industry. The chinese are facing he** trying to get their products certified. But falling and getting up is something that needs to be done to compete with Airbus and Boeing. We need to learn the lessons of civil aircraft design and certification on our own. The 4.2 $ Billion asking price (which is what Boeing was going to pay and is presumably still the asking price range) can be used by us to set up an independent civil aircraft program. Embraer's engineers and design office are valuable but shouldn't we be developing our own engineering resources with our limited funds?

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Re: Military Acquisitions, Partnerships & Developments

Postby darshan » 28 Sep 2020 19:25

Bharadwaj wrote:Netra can be integrated with any aircraft that size including ones which offer better performance in terms of range, altitude etc...We dont have to get into a bidding match with the Chinese to acquire a Boeing reject.

There's no substitute for what's on the field and known when you need it yesterday. If NETRA's supply chain and know how are in tact then this is the best option available. Simple changes on the same platform can result in lot of work. There's no such thing as let's pull it from one aircraft and put it on another. Even simple disintegration of the original team can result in long delays. I'm not even going into supply chain, batch ordering, characterizations, etc. India doesn't make AEWACS on yearly basis.

Documented design that's out in field for which I may still have supply chain in tact and trained workforce. Of course any given day that's what I'll be going with. Especially in present times.

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Re: Military Acquisitions, Partnerships & Developments

Postby Bharadwaj » 28 Sep 2020 19:32

darshan wrote:
Bharadwaj wrote:Netra can be integrated with any aircraft that size including ones which offer better performance in terms of range, altitude etc...We dont have to get into a bidding match with the Chinese to acquire a Boeing reject.

There's no substitute for what's on the field and known when you need it yesterday. If NETRA's supply chain and know how are in tact then this is the best option available. Simple changes on the same platform can result in lot of work. There's no such thing as let's pull it from one aircraft and put it on another. Even simple disintegration of the original team can result in long delays. I'm not even going into supply chain, batch ordering, characterizations, etc. India doesn't make AEWACS on yearly basis.

Documented design that's out in field for which I may still have supply chain in tact and trained workforce. Of course any given day that's what I'll be going with. Especially in present times.


And we pay $4.2 billion for that? I never said we can pull it out and put it on. Whatever the additional development cost and time, it does not equate to acquiring an entire aircraft company and its commercially challenged portfolio for a kings ransom. There is nothing in the potential Embraer purchase which will compensate for that. We can negotiate for the erj-145's manufacturing rights if that is something which Embraer is willing to sell separately. That is likely to be not expensive and will serve the need for Netra.

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Re: Military Acquisitions, Partnerships & Developments

Postby Kakarat » 28 Sep 2020 20:26

Bharadwaj wrote:
Kakarat wrote:
You are missing a point Embraer is not offering any technology but Embraer itself is being offered

There is no comparison between HAL/ADA and Embraer as the former is mostly Military aviation and later is mostly into Civil aviation. In India most of civil aviation developments are by NAL & ADA is purely Military

If its so easy to develop a civil aviation industry, SARAS first flight was in 2004 but still struggling & RTA is still a paper plane. The successful ALH Dhruv still doesn't have a civilian version. Developing a Civil aviation industry is not as simple as you think.

Why buy Embraer? Because you cannot buy Boeing or Airbus & Embraer is the third largest aircraft manufacturer of civil aircraft today



And what do we do with Embraer and its present portfolio which does not sell ? I never said it was easy to develop a civil aircraft industry. The chinese are facing he** trying to get their products certified. But falling and getting up is something that needs to be done to compete with Airbus and Boeing. We need to learn the lessons of civil aircraft design and certification on our own. The 4.2 $ Billion asking price (which is what Boeing was going to pay and is presumably still the asking price range) can be used by us to set up an independent civil aircraft program. Embraer's engineers and design office are valuable but shouldn't we be developing our own engineering resources with our limited funds?


To develop a independent civil aircraft program it is going to cost us way more than what it needs buy Embraer & that's what we have been trying with the saras program was started precisely for that reason in the mid 80s and we are yet to taste first drop of success
With regards to sale, in India due to UDAN scheme there is a requirement for more smaller aircrafts, Gov can find ways to subsidise or encourage purchasing made in India aircrafts. In the international market Embraer will be one of the primary competitors in that segment to airbus and boeing is non existent in that segment, just because Airbus has an aircraft not everyone is going to buy only that. Also remember Embraer is not a mediocre company and they have established practices, their prime reason for a stake sale is for developing further

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Re: Military Acquisitions, Partnerships & Developments

Postby Bharadwaj » 28 Sep 2020 20:38

Kakarat wrote:To develop a independent civil aircraft program it is going to cost us way more than what it needs buy Embraer & that's what we have been trying with the saras program was started precisely for that reason in the mid 80s and we are yet to taste first drop of success
With regards to sale, in India due to UDAN scheme there is a requirement for more smaller aircrafts, Gov can find ways to subsidise or encourage purchasing made in India aircrafts. In the international market Embraer will be one of the primary competitors in that segment to airbus and boeing is non existent in that segment, just because Airbus has an aircraft not everyone is going to buy only that. Also remember Embraer is not a mediocre company and they have established practices, their prime reason for a stake sale is for developing further


The Udaan scheme (whose total aircraft demand will be relatively small) requires a Turboprop airliner the size of the Atr or smaller. The current Embraer portfolio has nothing that will fill that. A small jet has no chance against a turboprop in the Indian market for reasons of operating cost. Even if you buy Embraer, you will have to launch a new aircraft for a doubtful market size. The Saras will work for Udaan if we commit to getting it certified. If Embraer and its portfolio have any chance of parity against the a220, why are they so keen on selling their crown jewels? Sir, I understand that you are taken with the idea of buying Embraer, but there is no justification for it either commercial or technically. It is even doubtful strategically.

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Re: Military Acquisitions, Partnerships & Developments

Postby darshan » 28 Sep 2020 20:54

Bharadwaj wrote:And we pay $4.2 billion for that? I never said we can pull it out and put it on. Whatever the additional development cost and time, it does not equate to acquiring an entire aircraft company and its commercially challenged portfolio for a kings ransom. There is nothing in the potential Embraer purchase which will compensate for that. We can negotiate for the erj-145's manufacturing rights if that is something which Embraer is willing to sell separately. That is likely to be not expensive and will serve the need for Netra.

No one knows how they will end up going up about it. All I'm noting from this news is that there's confidence about being able to build more NETRAs on short notice. Would they end up getting more platforms before this is no longer a true statement? No one knows. The other points would be least of the worry for not being able to have flexibility to execute missions in mind at the right time.

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Re: Military Acquisitions, Partnerships & Developments

Postby Kakarat » 28 Sep 2020 21:06

Bharadwaj wrote:
The Udaan scheme (whose total aircraft demand will be relatively small) requires a Turboprop airliner the size of the Atr or smaller. The current Embraer portfolio has nothing that will fill that. A small jet has no chance against a turboprop in the Indian market for reasons of operating cost. Even if you buy Embraer, you will have to launch a new aircraft for a doubtful market size. The Saras will work for Udaan if we commit to getting it certified. If Embraer and its portfolio have any chance of parity against the a220, why are they so keen on selling their crown jewels? Sir, I understand that you are taken with the idea of buying Embraer, but there is no justification for it either commercial or technically. It is even doubtful strategically.


Very much Sir like you are against the idea of buying Embraer & think is useless

You are coming to the same point again. Not everyone is going to buy a A220 just because its Airbus, then why is there a B737 when there is A320?
The primary reason for Embraer -Boeing deal was to counter Bombardier-Airbus deal, for Embraer it was bringing money for further developments and Boeing's market and suppliers. Now that the deal is broken and aviation market as a whole is down they are desperate.
Yes SARAS will work & ERJ family also will work. With Embraer SARAS can be marketed worldwide as they have the know how and why of civilian aircraft manufacturing. Please note SARAS is a NAL bird and not HAL's.

Do you think everyone in government are stupid to invest in a useless company & a doubtful strategically as you call it

Netra is just one of the value additions among others

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Re: Military Acquisitions, Partnerships & Developments

Postby Thakur_B » 28 Sep 2020 21:12

Just the possibility of exporting up to 10 Netra systems to friendly nations alone shall offset the cost sunk into Embraer acquisition by a great margin.

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Re: Military Acquisitions, Partnerships & Developments

Postby Bharadwaj » 28 Sep 2020 21:19

Kakarat wrote:
Bharadwaj wrote:
The Udaan scheme (whose total aircraft demand will be relatively small) requires a Turboprop airliner the size of the Atr or smaller. The current Embraer portfolio has nothing that will fill that. A small jet has no chance against a turboprop in the Indian market for reasons of operating cost. Even if you buy Embraer, you will have to launch a new aircraft for a doubtful market size. The Saras will work for Udaan if we commit to getting it certified. If Embraer and its portfolio have any chance of parity against the a220, why are they so keen on selling their crown jewels? Sir, I understand that you are taken with the idea of buying Embraer, but there is no justification for it either commercial or technically. It is even doubtful strategically.


Very much Sir like you are against the idea of buying Embraer & think is useless

You are coming to the same point again. Not everyone is going to buy a A220 just because its Airbus, then why is there a B737 when there is A320?
The primary reason for Embraer -Boeing deal was to counter Bombardier-Airbus deal, for Embraer it was bringing money for further developments and Boeing's market and suppliers. Now that the deal is broken and aviation market as a whole is down they are desperate.
Yes SARAS will work & ERJ family also will work. With Embraer SARAS can be marketed worldwide as they have the know how and why of civilian aircraft manufacturing. Please note SARAS is a NAL bird and not HAL's.

Do you think everyone in government are stupid to invest in a useless company & a doubtful strategically as you call it

Netra is just one of the value additions among others


Sir you are taking this personally and attributing intentions and terms which I neither implied nor used. You are dragging in the Government to justify a nonviable logic. You clearly do not understand the Indian civil market very well. The erj, ejet and e2 will not work in udan or the Indian civil market at large. Sir, we can develop know how of civil aviation on our own. It requires two things - patience and money. We will be needlessly investing in a commercially challenged portfolio and company when this money can go towards developing a civil aviation eco space from our own learnings. We will agree to disagree.

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Re: Military Acquisitions, Partnerships & Developments

Postby Bharadwaj » 28 Sep 2020 21:21

Thakur_B wrote:Just the possibility of exporting up to 10 Netra systems to friendly nations alone shall offset the cost sunk into Embraer acquisition by a great margin.


Thakur B Sir, What would be the estimated margin on each netra? 420 million dollars? that will be what is needed for the sale of 10 netras to offset the cost of buying embraer.

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Re: Military Acquisitions, Partnerships & Developments

Postby darshan » 28 Sep 2020 21:37

There's not lot of activity going on within India about rolling out AEWACS platforms. In such a situation, anything that keeps momentum going is worth it. If imports move in due to immediate need, then one may as well lament about this couple decades later. People are still waiting to see more of Train 18. I personally see it as a critical time and opportunity. End of the day there is no replacement for lost momentum, opportunity, knowledge, etc.

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Re: Military Acquisitions, Partnerships & Developments

Postby Kakarat » 28 Sep 2020 21:45

Bharadwaj wrote:
Sir you are taking this personally and attributing intentions and terms which I neither implied nor used. You are dragging in the Government to justify a nonviable logic. You clearly do not understand the Indian civil market very well. The erj, ejet and e2 will not work in udan or the Indian civil market at large. Sir, we can develop know how of civil aviation on our own. It requires two things - patience and money. We will be needlessly investing in a commercially challenged portfolio and company when this money can go towards developing a civil aviation eco space from our own learnings. We will agree to disagree.


I have just replied to what you posted (had even highlighted in the Quote)

Boss its not me or BR which has decided to buy Embraer it's the Government

Yes I don't know anything about aviation & buying Embraer is useless, I don't want to continue this any further

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Re: Military Acquisitions, Partnerships & Developments

Postby Bharadwaj » 28 Sep 2020 21:56

Kakarat wrote:
Bharadwaj wrote:
Sir you are taking this personally and attributing intentions and terms which I neither implied nor used. You are dragging in the Government to justify a nonviable logic. You clearly do not understand the Indian civil market very well. The erj, ejet and e2 will not work in udan or the Indian civil market at large. Sir, we can develop know how of civil aviation on our own. It requires two things - patience and money. We will be needlessly investing in a commercially challenged portfolio and company when this money can go towards developing a civil aviation eco space from our own learnings. We will agree to disagree.


I have just replied to what you posted (had even highlighted in the Quote)

Boss its not me or BR which has decided to buy Embraer it's the Government

Yes I don't know anything about aviation & buying Embraer is useless, I don't want to continue this any further



I am questioning the logic of the decision in isolation and not the Government. Two separate things. I never said or implied at the extreme level what you infer in your last sentence. I never thought you know "nothing" about aviation nor did I say buying embraer was "useless". Questioning the logic of the decision does not automatically imply extreme bias towards it.Yes we can drop it.

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Re: Military Acquisitions, Partnerships & Developments

Postby vera_k » 28 Sep 2020 22:09

Buying ERJ makes sense if the math works out. Will easily advance domestic civil aircraft development by 30 years. No doubt the tech can be developed locally, however if there is a short cut offered, it must be taken.

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Re: Military Acquisitions, Partnerships & Developments

Postby abhik » 28 Sep 2020 22:45

Thing is we are buying ~100 A320/B373 aircraft every year (before Covid at least) but neither players have offered to set up an assembly line here (Airbus for example has one in US and in China) - of the huge amounts we are spending on commercial aircraft we are not getting any significant industrial offset in exchange, this needs to change one way or the other.

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Re: Military Acquisitions, Partnerships & Developments

Postby Bharadwaj » 28 Sep 2020 22:51

abhik wrote:Thing is we are buying ~100 A320/B373 aircraft every year (before Covid at least) but neither players have offered to set up an assembly line here (Airbus for example has one in US and in China) - of the huge amounts we are spending on commercial aircraft we are not getting any significant industrial offset in exchange, this needs to change one way or the other.


That is something beyond belief. An assembly plant must be made mandatory for future buys. Hundreds of well paid jobs. The Russian mc-21 can be used as leverage. A technologically advanced aircraft that can meet the requirements of our Airlines. It should be in service at the end of next year. Anyway its ot and we can continue in some other thread.

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Re: Military Acquisitions, Partnerships & Developments

Postby vera_k » 29 Sep 2020 01:58

^ If a ERJ deal is concluded, the next project ERJ takes up can be a A320/B737 competitor. Due to suppressed demand for commercial aviation, there is a window of opportunity right now for a lower cost entrant.

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Re: Military Acquisitions, Partnerships & Developments

Postby Ankit Desai » 29 Sep 2020 05:19

Duplicate post self-Deleted.

-Ankit
Last edited by Ankit Desai on 29 Sep 2020 05:22, edited 1 time in total.

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Re: Military Acquisitions, Partnerships & Developments

Postby brar_w » 29 Sep 2020 05:20

vera_k wrote:^ If a ERJ deal is concluded, the next project ERJ takes up can be a A320/B737 competitor. Due to suppressed demand for commercial aviation, there is a window of opportunity right now for a lower cost entrant.


The entire reason the Boeing and Embraer deal worked was because of the latter's ability to leverage the former's position and negotiating advantage and cut better deals with its suppliers. It brought a portfolio and a large engineering technical workforce and the former brought scale, supply chain chops and the ability to bundle sales within a broader portfolio of aircraft. It doesn't matter where you are assembling a new clean sheet commercial air-liner, the supply chain is global and is, to a very large extent, shared by the entire commercial aviation industry. A very large chunk of that aircraft cost lives in that supply chain. So those same cost disadvantages that Embraer was trying to negate would still remain and would be a significant downward pressure on its profitability. With Airbus having bought Bombardier and playing in the ERJ size/space, and with other competition, they saw the writing on the wall as far as future revenue and profitability was concerned. You can move the entire production to sub-saharan Africa and those supply chain disadvantages won't go away.

Completely disassociating oneself from a global commercial aerospace eco-system and going on your own is a development, testing and certification nightmare and is probably a dead end if one is interested in any meaningful global market share especially in the bigger classes of aircraft (like large NB's). One must also think of the Brazilian interest here. They have created a very capable engineering unit that has an excellent reputation in the aerospace industry which is extremely difficult for new entrants to make market inroads. From their perspective they would like to retain some level of engineering and manufacturing capability and not completely containerize the commercial branch of the company and send it offshore.

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Re: Military Acquisitions, Partnerships & Developments

Postby vera_k » 29 Sep 2020 10:30

Don't think there is any need to send commercial operation offshore. It would happen over decades as new features and products are developed. Boeing itself is a good case study with how production is farmed out, and how the company has been slowly moving from a high wage location to a low wage location.

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Re: Military Acquisitions, Partnerships & Developments

Postby brar_w » 29 Sep 2020 17:19

vera_k wrote:Don't think there is any need to send commercial operation offshore. It would happen over decades as new features and products are developed.


Even then, what is the path to profitability which has to solve for the challenges the company faces now, and into the near-mid term, and are the reasons it is up for sale in the first place? How will the competitiveness be improved which is the #1 challenge for Embraer and a severe pressure on it when it comes to bringing new products to market?

Where you assemble the aircraft only solves for a fraction of the cost of the aircraft so it doesn't matter if you move to a lower cost assembly today or phase that in. As mentioned earlier, a large chunk of the cost resides in the supply chain and the components that others produce for you. There is even a trend in the industry to pass along new product development cost/risk lower down in the SC and off your own books. How you negotiate those contracts, and the terms and how much you can get those negotiations in your favor (Boeing and Airbus are brutal at it and often pass down massive cost/risk to their supply chain) is what directly impacts your competitiveness. Same with scale which allows you to invest in your SC which is the reason why a Boeing or Airbus sized SC operation looked so attractive to Embraer. It is more efficient and costs less because of the scale at which it operates in.

There is a reason that from a purely cost-centric viewpoint Boeing was such a good candidate to acquire Embraer even though they were so apart in other ways. From Embraer's perspective, any potential buyer would have to solve for these structural challenges that lie ahead for the company and its current and planned product portfolio. Those valuations ($4 Bn and change) only make sense if you do that. If you can't then both sides would have to value their deals and expectations differently. So basically, assuming that there is potential for some consolidation and re-order in the commercial aviation industry sector Embraer is interested in (like a Boeing-Mitsubishi tie up for example), any potential suitor would have to show how it has the ability to turn Embraer into an entity that can sustain a path to profitability amidst all that is going on in its competitive landscape (not to mention the cyclical nature of the industry and Covid on top of that).

Unless it's a fire sale, Embraer and Brazil are unlikely to enter into a deal if this can't be demonstrated. Also, from the GOIs perspective, how many struggling private or semi-private international commercial entities has it purchased outright and turned around (Embraer is losing about $300 Million each quarter) into profitable globally performing operations? Internal risk (to the GOI and its finances and reputation) would also have to be factored in. Embraer is hemorrhaging cash. Last thing you would want to do is pay billions to acquire a struggling operation, not turn it around, loose a ton of money, and then look to offload it at a massive loss. So the same logic (how to get Embraer profitable amidst the structural and competitive challenges it faces) also applies to those doing the due diligence on GOI's end. Embraer doesn't need technical infusion, or some other breakthrough to improve or grow its product portfolio. It is a highly capable, and internationally well regarded aerospace engineering company. There needs to be a way to have Embraer's products be more competitive given many of its competitors have, or are considering, consolidating their operations with larger OEMs who have massively higher levels of negotiating power with suppliers. How exactly the GOI proposes to do that would be interesting to see.

vera_k wrote:Don't think there is any need to send commercial operation offshore. It would happen over decades as new features and products are developed.


Over decades? How does that solve for the company's current problems and challenges? And what would be the cost-structure variance between India and Brazil, a couple of decades from now? How can one predict that this ahead of time?

Boeing itself is a good case study with how production is farmed out, and how the company has been slowly moving from a high wage location to a low wage location.


Instead of flirting around the margins by sucking up better tax incentives and strengthening one's own position vis-a-vis unions, the bigger lesson to be learnt here is how Boeing has been extremely aggressive in passing along cost and risk to its supplier base and how it, and Airbus, have constantly looked at consolidating so that they exert higher levels of bargaining power in that relationship. This was something Embraer simply couldn't compete with and why Boeing looked attractive to them.

If Embraer could easily solve for that by exploring even lower cost production (relative to Brazil even as they aren't producing in the US Pacific North West or Toulouse) then they would have simply done that and just raised more money from the commercial market and financed all their growth plans. But those banks likely want answers to how the company holds an advantage or at least competes in the current landscape before they open up their checkbooks to finance new products. If lower production cost was the ultimate step, then Russia would be controlling the commercial aviation sector. But the situation here is reverse no? A Brazilian company is facing financial difficulties in competing (on cost) vs other OEMs producing in much more expensive markets. If all it takes to turn around Embraer is to move it (gradually or immediately) into a lower production cost market then this would be an extremely attractive proposition for private capital to come in and help do. Could be a fund, a bank, other non OEM or even someone from inside the aerospace SC looking to diversify. A $4 billion deal isn't very large relative to what we have seen of late (like RTX for example).

The immediate challenge is the A220 series. How do you compete against the structural advantages, and huge pockets, that Airbus has? This is what Embraer is trying to solve for (one of the things at least) because it directly ties into the company's current products and how it will improve its cash flows. Without solving for this, there would be no new products and it doesn't matter if GOI pumps $4 Bn or $10 Bn into the company as none of this will force global airlines to buy an Embraer over an Airbus when the latter cross subsidizes or bundles regional sized aircraft with larger NB's or WB's, or when it uses its massive SC operation and scale to negotiate contracts with its suppliers that allow it to be even more aggressive in pricing. A fair bit of the valuation is the product portfolio and future R&D. What number do you put on it if you can't sell it at a desired level?


The A220-300 vs the E195-E2 - the fight Embraer cannot win alone

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Re: Military Acquisitions, Partnerships & Developments

Postby pankajs » 01 Oct 2020 17:49

https://twitter.com/TheWolfpackIN/statu ... 6574600193
CCS approves $1.06 billion project to establish Army Static Switched Communication Network (ASCON)-Phase IV Network.
Current ATMT will be upgraded to use Internet Protocol/MPLS tech via medium like satellites, microwave radios etc.

https://twitter.com/TheWolfpackIN/statu ... 2402391043
This project plus the recent orders of secure radios for both army and IAF shows intent to overhaul both strategic and tactical level communications from enemy jamming and cyber attacks.

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Re: Military Acquisitions, Partnerships & Developments

Postby pankajs » 01 Oct 2020 17:52

Embedded video ...

https://twitter.com/writetake/status/13 ... 3125532672
From today's #ATGM firing.

https://twitter.com/DRDO_India/status/1 ... 9205327872
Laser Guided Anti Tank Guided Missile was successfully tested, defeating a target located at longer range. The test was conducted from MBT Arjun at KK Ranges (ACC&S) Ahmednagar today in continuation of successful trial done on 22nd sep 2020.

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Re: Military Acquisitions, Partnerships & Developments

Postby pankajs » 01 Oct 2020 18:02

https://twitter.com/manupubby/status/13 ... 7121959937
India ropes in private sector to upgrade Soviet origin Pechora surface to air systems.

Alpha Design beats BEL, signs Rs 591 cr contract with defence ministry.
Old SAMs are still being retained. Is it because we cannot build Akash fast enough or just to save some buck?

https://twitter.com/manupubby/status/13 ... 7353363460
In a first for the private sector, Defence Ministry places order for 10 lakh hand grenades designed and made in India.

To replace Grenade number 36 - WW II era design.
https://twitter.com/manupubby/status/13 ... 6513078272
This is how India's new multi mode hand grenades will look like.

Big achievement for @DRDO_India and the private sector (Economic Explosives Ltd).
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Re: Military Acquisitions, Partnerships & Developments

Postby Aditya_V » 01 Oct 2020 18:04

pankajs wrote:https://twitter.com/manupubby/status/1311624697121959937
India ropes in private sector to upgrade Soviet origin Pechora surface to air systems.

Alpha Design beats BEL, signs Rs 591 cr contract with defence ministry.
Old SAMs are still being retained. Is it because we cannot build Akash fast enough or just to save some buck?

https://twitter.com/manupubby/status/13 ... 7353363460
In a first for the private sector, Defence Ministry places order for 10 lakh hand grenades designed and made in India.

To replace Grenade number 36 - WW II era design.


Well we would need something for our bases in South India, we cant produce new SAM's in numbers to cover all of India.

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Re: Military Acquisitions, Partnerships & Developments

Postby pankajs » 01 Oct 2020 18:08

From an OSINT handle ... with a pinch of salt.

https://twitter.com/strategic_front/sta ... 1098618882
Bharat Forge's 155 mmx39 calibre Ultra Light Howitzer developed jointly with DRDO has been successfully trialed at the Long Proof Range (LPR) Khamaria in Jabalpur. A total of 24 rounds were fired (12 rounds in a day) from the prototype gun.

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Re: Military Acquisitions, Partnerships & Developments

Postby Vips » 01 Oct 2020 18:29

Any additional info if this was the Titanium or Stainless Steel version?


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