Strategic Management Process
A brief Background about Mauricio Bothelho
A brief history about Embraer
Case Study contents
Who is Mauricio Bothelho?
At age 26, Mauricio Botelho left his hometown of Rio de Janeiro to take a job in the Amazon jungle. A promising mechanical engineer, he signed on to help build a sawmill on Marajo Island in northern Brazil. Given the remote location, the challenges were many, yet the project thrived. "There was nothing around," recalls Botelho. "We had to attend to the employees, their families and the surrounding communities. So we built a school. Children rowed their canoes on the river long distances to come to class. Seeing that was deeply touching. I learned that if you give people an opportunity, they take it and blossom." Three and a half decades later, Botelho, now 60, employs some of that same vision and faith in people as president and CEO of Embraer, a $2.9 billion Brazilian aircraft manufacturer--the fourth largest in the world. Since taking over in 1995, he has guided the company to extraordinary growth, owing to a focus on regional jets instead of slower, shorter-range turbo-props. He also has shown a deft hand in labor talks and in his decision to establish in-house engineering and MBA programs to create a pipeline of able technicians and managers. What is Embraer?
Based in São José dos Campos, Brazil, Embraer was founded in 1969 as a government initiative and then privatized on December 7, 1994. On March 31, 2006 the majority of Embraer shareholders, including common, preferred and ADR holders, approved Embraer’s capital restructuring proposal, which consists of a simplified capital structure composed of one type of shares (common shares) and will contribute to enhanced corporate governance practices and transparency standards. Embraer continues to lead the industry with its innovative regional and commercial jet product lines. Empresa Brasileira de Aeronautica, or Embraer, was created in 1969 as part of a broad government strategy to establish a modern aeronautical industry in Brazil. (As it happened, a Brazilian, Alberto Santos Dumont, launched the world's first officially witnessed flight, on the outskirts of Paris in 1906. The Wright brothers' historic flights in Kitty Hawk, N.C., three years earlier were not seen by authorities.) Run as a state industry, Embraer operated on domestic and foreign investment. The first plane it produced was a modest, nonpressurized turbo-propeller. Few people, both in Brazil and abroad, thought the enterprise would succeed. It wasn't until 1978, when President Jimmy Carter deregulated the U.S. airline industry, giving rise to many new carriers, that Embraer and the entire regional-plane industry began to prosper. But by the mid-1990s, business had long since cooled. The company had proved itself technologically capable, but was essentially a bust. The Brazilian government sold it to local private investors in December 1994. Nine months later, the new owners hired Botelho, by this time a seasoned executive with experience in construction and telecommunications. Despite its share of post-September 11 struggles common to the airline industry, by most measures Embra continues to thrive. The company, the largest private sector exporter in Brazil for three years in a row, had an order backlog of $9.5 billion as of the fall. In December, it signed a deal to open a factory in China--its first outside Brazil--to meet demand for its popular 50-seat jet, the ERJ 145, among other models. Embraer already has subsidiaries in the United States, the United Kingdom, France, Australia, Singapore and China to provide postsale assistance and technical support.
Embraer may not enjoy the name recognition of its nearest rival, Bombardier, to say nothing of the larger Boeing and Airbus, both of which make jumbo jets. But within the airline industry, observers are taking note of Botelho's success. "I'm really...
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