BROWNBACK SEEKS TRADE COMMISSION INVESTIGATION OF EMBRAER

-- Sept. 09--0 comments U.S. Sen. Sam Brownback is having a hard time believing that Brazil-based Embraer could capture 14 percent of the world's business jet market in eight years without help from subsidies from the Brazilian...


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Sept. 09--0 comments

U.S. Sen. Sam Brownback is having a hard time believing that Brazil-based Embraer could capture 14 percent of the world's business jet market in eight years without help from subsidies from the Brazilian government.

Brownback is asking the U.S. International Trade Commission to investigate.

"I think we've got to push aggressively forward," Brownback said.

Embraer has grown quickly in the business aviation sector, Brownback noted in a speech this month to the Wichita Aero Club.

The company competes with Wichita's Cessna Aircraft, Hawker Beechcraft and Bombardier Learjet.

Embraer -- based in Sao Jose dos Campos -- has gone from a "flat dead start" in the business jet market in 2002 to a 14 percent market share, Brownback said.

"I don't think you can do that without having a heavy subsidization by the Brazilian government," he said.

Embraer spokeswoman Christine Manna said Embraer's success is not due to subsidies.

"We did not use launch aid or any other illegal subsidies to develop our business jet portfolio," Manna said. The company also has not received subsidies for its commercial aircraft, she said.

Instead, Embraer financed the $1 billion in development costs with a public stock offering, contributions from "risk-sharing" partners and retained earnings.

"It did not use any public funds for either family (of jets)," Manna said.

Embraer, one of Brazil's largest exporters, announced its entry into the business jet market in 2000. It delivered the first Legacy 600 in 2002.

Today, Embraer offers seven models of executive aircraft: the Phenom 100, Phenom 300, Legacy 450, Legacy 500, Legacy 600, Legacy 650 and Lineage 1000.

Of the 69 planes it delivered during the second quarter of this year, 40 were business aircraft. Second-quarter net sales totaled $1.35 billion and net income totaled $70 million.

Brownback said the U.S. waited too long to investigate subsidies to Airbus.

"I thought we sat on our hands not doing things as a government and let Airbus continually take more and more market share," Brownback said in his speech.

Only Airbus and Boeing remain in the commercial aerospace market today, he said.

"If we allow similarly other countries to go into the general aviation market and let them get that much of a head start before you confront what they're doing, how many of us are going to be left standing then?" Brownback said.

He said he's working with colleagues on the Senate Finance Committee to request that the International Trade Commission investigate the global competitiveness of the U.S. business aircraft industry and whether foreign government subsidies or actions have had a negative impact.

The ITC should focus on the industry in the U.S., China, Brazil, Canada and Europe, examining the composition of the industry and the factors of competition, Brownback said.

"For years, Kansas has been leading the way in the general aviation industry," Brownback said in a statement issued last week. "I know if everyone plays by the rules, Kansans will easily rise above the competition."

Reach Molly McMillin at 316-269-6708 or mmcmillin@wichitaeagle.com.

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