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Exclusive: Embraer, Rockwell Collins eye shared remote sensing portfolio
April 4, 2017 / 11:12 AM / 7 months ago

Exclusive: Embraer, Rockwell Collins eye shared remote sensing portfolio

RIO DE JANEIRO (Reuters) - U.S. aviation electronics maker Rockwell Collins Inc (COL.N) and Brazil’s Embraer SA (EMBR3.SA) will assess each other’s remote sensing and border control technology for possible joint sales, a senior executive for the Brazilian planemaker told Reuters.

Embraer CEO Jackson Schneider talks to Reuters at the International Air and Space Fair (FIDAE) at the Arturo Merino Benitez international airport in Santiago, Chile March 29, 2016. REUTERS/Rodrigo Garrido

Jackson Schneider, chief executive of Embraer’s defense division, said subsidiaries Bradar and Savis could eventually include Rockwell Collins products into their portfolios or have their technology included in the U.S. partner’s offerings.

“Right now we’re not identifying specific programs (for sales),” Schneider said in an interview on the eve of the LAAD defense expo in Rio de Janeiro, which opens Tuesday. “They’re looking at our best products for their international portfolio and we’re going to do the same for theirs here in Brazil.”

Schneider did not provide an estimate for the value of the joint sales. Rockwell Collins could not be immediately reached for a comment outside business hours.

International partnerships are common in the aerospace industry, especially on defense contracts where strategic relationships with governments are key. Embraer has partnered in recent years with Boeing Co (BA.N) to sell and support the KC-390 military cargo jet and with Israel’s Elbit Systems Ltd (ESLT.TA) to study a potential joint venture to build drones.

One outlet for the new Rockwell Collins partnership could be the Brazilian government’s SISFRON program, which is aimed at securing long stretches of the country’s remote 17,000 km (10,500 mile) border against arms and drug trafficking.

Embraer’s subsidiaries have completed about 70 percent of the initial SISFRON contract, Schneider said, adding he was watching whether a federal spending freeze would hit the 450 million reais ($145 million) earmarked for the program in 2017.

He declined to comment on the chances of a much-discussed second phase for the program.

Joint sales with Rockwell Collins could open new markets to Embraer’s fledgling defense portfolio, which grew as Brazil’s military spending surged early this decade before the government delayed or scaled back several programs due to a deep recession.

International sales are now crucial to extending the horizon of several defense programs, such as the KC-390 military transport aircraft under development for Brazil’s Air Force.

Schneider said 20 international delegations at LAAD, Latin America’s biggest defense and security expo, expressed interest in visiting a prototype of the KC-390 at a nearby air base.

“We’re working actively to close a foreign sale of the KC-390,” Schneider said, declining to name the countries closest to such a deal or specify a timeline for negotiations.

Reporting by Brad Haynes; Editing by Himani Sarkar

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