and partner Avic plan to ramp up Chinese assembly of Legacy 600 and 650 business jets to six a year by 2015, with an initial focus on the local market.
The operation will be profitable at that level, even though the plant at Harbin, built for the commercial aircraft from which the business jets are derived, has a capacity of 20 units a year, says Guan Dongyuan, Embraer’s president for China.
The agreement to convert the line, announced on June 21, means that within 18 months two factories in China should have delivered the country’s first locally assembled business jets.has agreed with another part of Avic to build an assembly line at Chengdu for its Citation Sovereign and Citation Latitude aircraft. Both joint ventures plan to complete their first aircraft late in 2013.
Converting the Harbin line also makes use of a plant investment that failed to generate much business in its original form. Harbin Embraer Aircraft Industry Co. delivered only 41from 2003 until 2011, because the type attracted little demand in China. It was falling out of favor elsewhere at the same time.
“The operation is very lean and there will not be much investment, because it is based on the existing infrastructure” used for ERJ-145s, says Guan, explaining why Harbin can be profitable at a delivery rate as low as six a year.
The Legacy 600 and longer-range 650 are based on the ERJ-135 regional jet, itself a shortened version of the ERJ-145. Although the workers at Harbin already know how to build ERJ-145s, there are enough differences between that model and the business jets, not least in fitting out their cabins, for the plant to have to begin slowly. The production process at Harbin is the same as Embraer’s plant at Sao Jose dos Campos, joining together major assemblies from suppliers, says Guan.
Avic and Embraer plan to deliver aircraft from Harbin ready for the customer; they will not have to go to a separate facility for cabin completion.
Embraer stresses that it is not relying on state companies being directed to buy Legacy 600s and 650s by Avic’s backers in Beijing. “We are not depending on the influence of the Chinese government,” says Guan. “We have a competitive product.” Embraer took orders for 14 Legacy 600s and 650s from Chinese customers last year. It has booked six so far this year, including five for the leasing arm of the giant state bank ICBC, whose activity sometimes but not always is choreographed with government policy. Those order figures augur well for keeping the Harbin plant busy enough.
Production from the plant will be targeted at Chinese customers “initially,” Guan says, leaving open the possibility of serving a wider market later.
ERJ-145 production and sales in China have left more than production tooling as a legacy for the Legacy. Infrastructure for supporting the type is also in place in China.
The Brazilian company owns 51% of the joint company and Avic 49%, although Guan says that ownership levels are under negotiation. The ERJ-145 line was set up before Avic adopted its policy of seeking investment from local governments for new projects, so Harbin city has no stake. At Chengdu, the city government will take a share in Cessna’s joint venture.
Embraer’s specific partner is Harbin Aircraft, which, awkwardly for this project, is part of Avicopter, Avic’s rotary-wing specialist.
Avicopter’s move into making business aircraft, an activity that Avic head office had assigned to general aviation subsidiary Caiga and fighter subsidiary AAT, highlights the difficulty that the Chinese industry is facing in rationalizing its operations. Decades of poorly coordinated development have left programs and capabilities scattered unsystematically among Avic’s many plants. But it clearly makes industrial sense to keep making the best use of current facilities, wherever they are located, as Avic is doing with the ERJ-145 line.
The Legacy 650, with a gross weight of 24.3 metric tons, is as large as the big business jets that AAT eventually wants to make, even if it does not have the desired high performance. The Citation Sovereign weighs 13.7 tons.