Embraer taps Oliver Wyman to help breach US defense market

Embraer, a Brazil-based aircraft manufacturer, has hired consulting firm Oliver Wyman to help it win contracts with the US military, Reuters reported on Friday.

Bosco da Costa Jr., head of Embraer’s defense division, told Reuters that the company hired Oliver Wyman approximately one month ago and is “fully engaged” in building a strategy to penetrate the US market.

"We looked at several consultancies as part of a careful selection process, evaluating their capacity in the defense field, and concluded that Oliver Wyman is the company that will help us," Costa said in an interview on Thursday.

The current focus is selling Embraer’s C-930, a twin-engine jet military cargo plane, which would compete with Lockheed Martin’s C-130J Super Hercules, the current production model of the four-engine turboprop that has been produced since 1956.

Embraer’s C-930 has been in service in Brazil for approximately five years, with nearly half of its orders coming from the Brazilian Air Force, a partner on the project. The plane has also received orders from South Korea and several countries in Europe: Netherlands, Portugal, Hungary, Austria, and Czechia.

Missing from that roster of clients is the US – home of Boeing, Lockheed Martin, and Northrop Grumman – and Germany, France, and Spain – the owners of Airbus.

Breaching the US defense market in a meaningful way will be a significant challenge for Embraer and its consultants.

The US has the most highly-developed defense market in the world, and an obvious preference (and regulatory structures and incentives) to support its domestic aircraft manufacturing base. The overwhelming majority of US military aircraft are of domestic origin, and the US government has rebuffed numerous contract attempts from the foremost manufacturer of its European NATO allies, Airbus (which partnered with Lockheed and Northrop Grumman at various times). Why would the US entertain the idea of supporting a BRICS country’s military industrial complex instead of its own?

Costa, in the Reuters interview, said one of the options floated by Oliver Wyman was to penetrate the US military market via mergers and acquisitions. 

Costa also noted the C-390 has enough US content to meet local requirements.