Slat­tery in hold­ing pat­tern as Boe­ing cir­cles Em­braer

Sunday Independent (Ireland) - Business & Appointments - - FRONT PAGE -

the best trans­ac­tion. As I sit here, per­son­ally it is an un­usual mo­ment in time be­cause I am spon­sor­ing the joint ven­ture — but I can’t speak for my­self and where I will be af­ter the joint ven­ture gets set up. Right now I can’t have that con­ver­sa­tion legally.”

Ul­ti­mately, the man­age­ment team of the new joint ven­ture will be cho­sen by Boe­ing and whether they will back the cur­rent lead­er­ship or bring in their own peo­ple at the top re­mains to be seen.

“I’m sure Boe­ing will make all the right de­ci­sions — they are ex­pert at this — but I just can­not deal for my­self. Be­low the of­fice of chief ex­ec­u­tive it is clear to me that all of the or­gan­i­sa­tion will be in­vited into the joint ven­ture but I can­not have that con­ver­sa­tion with them. I am com­fort­able that Boe­ing will make the right de­ci­sion. What will be will be.”

So the joint ven­ture — and his own whole­hearted sup­port of it — could ul­ti­mately do him out of a job just at the mo­ment of cul­mi­na­tion of the two big suc­cesses of his ca­reer to date — the launch of a brand new pas­sen­ger jet and the seal­ing of a mas­sive deal to sell Em­braer’s com­mer­cial avi­a­tion unit to its huge Amer­i­can com­peti­tor. “Yes that’s tech­ni­cally pos­si­ble. There is uncer­tainty be­cause of my fidu­ciary re­spon­si­bil­i­ties, but it is not some­thing that leads to any sleep­less nights. The best thing I can do right now is fo­cus on fill­ing out the back­log for the E2 and then we can worry about what the fu­ture holds.”

That firm’s or­der back­log — a mea­sure of ex­pected rev­enue — stands at 250 E2 jets, worth about $13.5bn. The E-jet fam­ily in to­tal just de­liv­ered its 1,500th air­craft last week. Those num­bers for the third-big­gest avi­a­tion man­u­fac­turer in the world will do Slat­tery’s stand­ing in the highly-com­pet­i­tive in­dus­try no harm at all and will mean that how­ever the Boe­ing deal plays out, his phone is un­likely to stay silent.

“What is im­por­tant to me is to find an align­ment of cul­tural val­ues and I need to be part of a team that has fire in their belly. That prob­a­bly comes from my mother and my fa­ther — great tra­di­tional val­ues and su­per-strong work ethic that I see shared with my brother [Avolon CEO Domh­nal Slat­tery]. Great val­ues and a burn­ing de­sire to win the mar­ket­place de­fines Boe­ing, so if, at some point, that con­ver­sa­tion were to ma­te­ri­alise that would be a con­ver­sa­tion of course I would en­ter­tain. But be­cause I have ro­bust val­ues that is not a con­ver­sa­tion I could en­ter­tain — or that they would want en­ter­tained — un­til af­ter con­tracts are signed. And I don’t know if they will want to en­ter­tain it even then. But I ad­mire the Boe­ing com­pany enor­mously and have done through­out my whole ca­reer.”

That ad­mi­ra­tion started he said, when he and Domh­nal would go with their fa­ther from their home in En­nis, Co Clare to Shan­non air­port.

“We’d see the Boe­ing 747-400s parked there be­fore fly­ing to JFK. Back then it was iconic.”

He be­gan his ca­reer, like his brother, in the leas­ing busi­ness but in­di­cates that he has no in­ten­tion of re­turn­ing to that in­dus­try and that he has never been hap­pier than he has been work­ing in air­craft man­u­fac­tur­ing.

“I have been bit­ten by the OEM [air­craft man­u­fac­tur­ing in­dus­try] bug and it would sad­den me to leave that world be­cause I have found a niche where I feel ful­filled,” he said.

“My jour­ney in avi­a­tion started in the mid-90s as a con­sul­tant and ad­viser to air­lines. Then, of course, with the launch of RBS Avi­a­tion Cap­i­tal and the growth of that I be­came a banker and lessor to air­lines and now, for the last seven and a half years, I have been a man­u­fac­turer sell­ing equip­ment to the air­lines. Through­out that jour­ney, there is no doubt in my mind that the in­tel­lec­tual re­wards of be­ing an OEM are very hard to beat. It is just a very spe­cial re­la­tion­ship with the air­lines and it is very re­ward­ing be­cause we are talk­ing to air­lines con­stantly.”

Slat­tery says the busi­ness is highly com­pet­i­tive: “It is just like in box­ing. There is no prize for sec­ond place. When we get into the ring we get in to win. The com­pe­ti­tion is vi­cious. We try not to make it per­sonal but we are re­spon­si­ble for tens of thou­sands of jobs. That’s why — with our sup­port — Brazil opened a panel at the World Trade Or­gan­i­sa­tion against Canada for what we be­lieve were il­le­gal sub­si­dies to [Em­braer com­peti­tor] Bom­bardier and the C-se­ries.”

Slat­tery was very pub­lic ear­lier in the year about his crit­i­cism of the Cana­dian gov­ern­ment’s sup­port for Bom­bardier’s C-se­ries jet, be­liev­ing this amounted to un­fair gov­ern­ment sub­si­dies and hit Em­braer’s own sales.

“I just want a level play­ing field. We are not ask­ing the Brazil­ian gov­ern­ment to put eq­uity into Em­braer. We live or die on whether we are mak­ing air­craft sales profitably or not.”

Bom­bardier has since off­loaded the C-se­ries project to Air­bus and Slat­tery be­lieves this marks its exit from com­mer­cial avi­a­tion. Last week Bom­bardier an­nounced al­most 500 job cuts at its Belfast plant, some­thing that did not sur­prise Slat­tery: “When you sit in the seat I sit in you have to look through the global lens. The rules of war have been de­fined by the WTO.”

He in­sists that his loy­alty in these mat­ters has to be to his 18,000 col­leagues in Brazil.

“But if I was in Shorts I would be feel­ing very upset and very bit­ter and the UK gov­ern­ment should be feel­ing very bit­ter about that sit­u­a­tion. The view was that when the C-se­ries was part of Bom­bardier, these com­mit­ments were be­ing made and in­vest­ments were be­ing made and jobs were be­ing se­cured for the long run and now we find a sit­u­a­tion where that is not man­i­fest­ing. As an Ir­ish­man, when I saw that head­line I felt sick to my stom­ach for those guys be­cause it’s not like this is a part of the world where it is easy to jump from such a highly spe­cialised job. So, as an Ir­ish­man, I felt sick but I wasn’t sur­prised.”

Whether or not, in time to come, Slat­tery will be re­quired to trans­fer his own skills re­mains to be seen but, right now, he is tak­ing huge pride in the E2 project. “This is the achieve­ment of my ca­reer to date. I got to work with the team to de­velop the busi­ness case, present it to the board, get ap­proval, de­velop the air­craft, get it cer­ti­fied and bring it into ser­vice. It has been a very spe­cial ex­pe­ri­ence and a huge learn­ing. I hope the fu­ture is full of chal­lenges and ex­cite­ment. What­ever it is I am up for the chal­lenge.”

John Slat­tery, CEO of Em­braer Com­mer­cial Avi­a­tion, with the new Em­braer E190-E2 pas­sen­ger jet. Pic­ture by David Conachy

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