SAO PAULO/PARIS (Reuters) – Brazilian planemaker Embraer SA (EMBR3.SA) has been thrust into an uncertain future with no immediate plan B, while not ruling out seeking a bailout after Boeing Co (BA.N) jettisoned a $4.2 billion commercial aerospace tie-up amid the coronavirus crisis.
FILE PHOTO: Air Astana Embraer E190-E2 aircraft with a snow leopard livery is seen at Almaty International Airport, Kazakhstan January 21, 2020. REUTERS/Pavel Mikheyev
The company’s shell-shocked chief executive, in the job for a year with little aerospace experience, sought to rally staff after the board held late-night talks to review the collapse of plans for surviving mounting aerospace competition.
“Our history is full of difficult moments, and we have overcome all of them,” Francisco Gomes Neto told Embraer’s 20,000 staff before giving them a thumbs up.
But Embraer now faces a historic crisis with its isolation reinforced by the breakup – two years after Europe’s Airbus (AIR.PA) absorbed Embraer’s main competitor, the Canadian-designed A220.
“For Embraer, it could be very damaging,” said Teal Group consultant Richard Aboulafia, noting it was the only significant independent jetmaker.
“It’s hard to pressure your suppliers when the volume you’re offering is a fraction of your competition’s”.
Embraer’s immediate aim is to reassure investors. It pledged cost savings and said it had solid liquidity.
It also tore up arguments previously used to persuade unions and regulators to back the deal, saying it could survive without Boeing rather than stating the deal would be its “salvation”.
The former state-owned company has not asked for a bailout but says it is open to “complementary” sources of financing.
Brazilian companies, including airlines and automakers, are in bailout discussions.
Embraer “will need strong government support to recover the (separation) expenses and recover from the economic crisis caused by coronavirus,” said Aurelio Valporto, who heads minority shareholder group Abradin and opposed the deal.
Embraer had two main pitches for investors that have now vanished.
First, it would pay $1.6 billion in dividends from the sale. Second, it would receive enough cash to wipe debts clean and rejuvenate defense and executive-jet units. As a revamped company, Embraer would get a fresh start.
Executives also hoped Boeing’s marketing would be a silver bullet for the commercial arm, to be 80%-owned by Boeing.
Instead, Embraer now has a crisis committee that meets daily and no end in sight for its troubles.
That, analysts say, could not come at a worse time.
Sales of its E2 have lagged. Overall jet demand has vanished due to coronavirus. Now, crashing oil prices have further weakened the case for new jets, sold mainly on fuel efficiency.
CHINA WILD CARD
Questions have also been raised over how long high-profile Embraer jetliner CEO John Slattery, who aggressively marketed the E2 jet while lobbying for regulatory approval, will stay without the deal. He did not respond to a request to comment.
In a Twitter post, he said, “Despite this uncertain period in our industry, I’m confident Embraer will emerge stronger.”
On the positive side, analysts expect demand for small jets like the A220 or Embraer’s E2 to lead any future rebound.
The breakup may also spark a distracting legal battle.
In Brazil, alarm bells rang when Boeing lawyers began quizzing Brazilian counterparts on paperwork in recent weeks.
Industry sources said Boeing needed room to maneuver as it seeks U.S. government support for the U.S. aerospace industry. With the crisis expected to resurrect economic barriers, it was seen in a corner over moves to acquire thousands of Brazilian engineers while drawing up plans to lay off its own staff.
“You can’t easily go to Congress and ask for support and spend the money on an acquisition,” a senior source said.
Embraer says Boeing scuppered the deal on technicalities because of its own financial problems. Boeing says it pulled out only because Embraer failed to meet conditions. But the row itself could be damaging.
“Since it came apart in such vitriolic fashion, it’s hard to believe they can pick up the pieces and try again,” Jerrold Lundquist, managing director of The Lundquist Group, said.
That leaves limited options for Embraer though none has been discussed as a serious plan B.
One potential wild card is China, which almost beat Airbus to the A220 program and which remains on the hunt for ways of accelerating its own aerospace ambitions.
“From a strategic point of view, it is an option but it could be politically problematic,” Lundquist said.
Members of the inner circle of Brazilian President Jair Bolsonaro have repeatedly attacked China over coronavirus.
The breakup also leaves uncertainty for Embraer employees, many of whom were expected to work on future Boeing programs.
Embraer had already furloughed more than 90% of its main Brazil plant due to the crisis.
It had also spent $30 million on a new headquarters as it prepared to carve out the commercial unit.
“Our teams were working together, deciding things together. There were thousands of people working on joint decisions, all for it to end this way,” a person close to the discussions said.
Reporting by Marcelo Rochabrun in Sao Paulo, Tim Hepher in Paris and Rodrigo Viga Gaier in Rio de Janeiro; Additional reporting by Tatiana Bautzer in Sao Paulo; Editing by Lisa Shumaker
7 Reasons Why America Loves Doing Business with Canada
Canada is one of the United States’ most important trading partners. According to the United States Census Bureau, Bureau of Economic Analysis, the US exports over $300B worth of goods and services to Canada annually. It also imports over $300B worth of goods and services from the country every year.
In fact, the trade relationship between the two North American countries is the biggest in the world. The two nations have traded for over 100 years. And a strong trade relationship is prosperous for both countries.
So, what makes Canada such an excellent trading partner for the United States? Here are a few good reasons:
1. Geographical Location
Canada shares a large border with the United States. Trading with Canada is easy by road, boat, or air. Most of the economic hotspots in Canada like Toronto, Vancouver, and Calgary are just a short flight away from an American city.
2. Manufacturing Strengths
Canada has some exceptional exports thanks to its vast manufacturing strengths. Here are a few of its two products:
- Non-renewable Energy: Canada’s non-renewable energy exports like oil and gas are a significant part of its economy. Although falling gas prices have impacted this sector, Canada continues to depend on its gas and oil exports.
- Composite Manufacturing: You’ll find plenty of world-class options if you’re looking for advanced composite manufacturing in Canada regardless of your industry. The Canadian composite manufacturing industry serves many national and international clients in sectors such as defence, transportation, marine, aerospace, medical, industrial, energy, home appliances, construction, and more.
- Vehicle: Canada has a renowned automotive sector, producing light trucks, crossovers, SUVs, etc., with its technologically advanced factories. 95% of Canada’s automotive exports go to the United States.
- Aluminum: The Great White North produces some of the best quality aluminum in the world. The United States happens to be Canada’s biggest importer of aluminum.
- Meat and Dairy: Canada produces meat, beef, poultry, and dairy known for its quality. Unlike some countries, Canada doesn’t use harmful hormones in its meat industry.
3. Good Tax Treaties
Canada has many provisions that make business favourable for American companies. For example, a non-resident corporation that does not otherwise have a permanent establishment (PE) in Canada may do business without paying income tax on its profits. Canada also offers favourable corporate taxes, especially compared to the United States.
Aside from federal incentives, many provinces offer provincial incentives to do business in Canada. For example, many American films and TV shows are shot in Toronto because of lucrative tax enticements.
4. Favourable Exchange Rates
Not only is the Canadian dollar stable, but it usually hovers 20% lower than the United States. The favourable exchange rate makes it cost-effective for the United States to import goods and services from Canada.
However, the exchange rate isn’t so low that it discourages Canadians from travelling to the United States or buying American products. Many economists consider the exchange rate to be in the sweet spot.
5. Similar Culture
Canada speaks the same language, eats the same food, plays the same sports, and consumes the same entertainment. A similar coculture without language barriers makes it easier for Americans to do business with Canada.
Of course, there are some parts of Canada where French is the most popular language. Likewise, Spanish is more prevalent in certain places in the United States. However, these issues are easily overcome with business cards, translators, and technology.
6. Prominent Tech Industry
Many American technology companies are doing business with Canada because of the country’s prominence on the tech stage. For example, Toronto produces more tech occupations than the Bay Area, New York, and even Silicon Valley.
Toronto also has over 2,000 startups and over 14,000 tech companies. In the MaRS Center, Canada also has one of the world’s largest innovation hubs. Canada is also the first nation in the world to develop a national AI strategy. There are over 500 international AI firms in the country. The world’s biggest concentration of AI startups is in Canada.
Besides the national AI strategy, there is plenty of other support for tech development in the country that’s attractive to the United States. Canada invested $900m in high-tech innovation and funded startup incubators in 2015.
Additionally, Canada offers many tax breaks to companies for research and development. It also provides special visa programs for investors and entrepreneurs in the tech industry.
7. Qualified Labour Pool
Canada has the second-highest tertiary education levels worldwide for people between the ages of 25 and 34, according to the Organisation for Economic Co-operation and Development (OECD). Canada’s highly skilled workforce stands at nearly 1.5 million people. Canada’s tech talent is also ranked highly for diversity.
These are just some of the many reasons why the United States enjoys doing business with Canada. Even with the economic climate changing, you can expect the partnership between the two countries to stand the test of time.
10 Ways to Make Your LinkedIn Profile Stand Out in 2021 – Part 2
Last week I provided 5 suggestions on how you can make your LinkedIn profile, which in 2021 is a non-negotiable must-have for job seekers, to stand out. The suggestions were:
- Add a headshot
- Create an eye-catching headline
- Craft an interesting summary
- Highlight your experience
- Use visual media
I’ll continue with my next 5 suggestions:
- Customize your URL
Your LinkedIn URL (Uniform Resource Locator) is the web address for your profile. The default URL will have your name and some random numbers and letters (https://www.linkedin.com/in/nick-kossovan-647e3b49). Customizing your profile URL (https://www.linkedin.com/in/nickkossovan/) makes your profile search engine friendly; therefore, you’re easier to find. As well a customized URL invites the person searching to make some positive assumptions about you:
- You’re detail oriented.
- You’re technologically savvy.
- You understand the power of perception (Image is everything!).
James Wooden, one of the most revered coaches in the history of sports, is to have said, “It’s the little details that are vital. Little things make big things happen.”
To change your profile URL, go to the right side of your profile. There you’ll find an option to edit your URL. Use this option to make your URL concise and neat.
- Make connections
The more connections you have increases the likelihood of being found when hiring managers and recruiters, looking for potential candidates with your background, search on LinkedIn. Envision your number of connections as ‘the amount of gas in your tank.’
At the very least, you should aim to get over 500 connections. Anything below 500 LinkedIn will indicate your number of connections as an exact number (ex. 368). Above 500 connections, LinkedIn simply shows you have 500+ connections. Getting to 500 implies you’re a player on LinkedIn.
As much as possible, connect with individuals you know personally, have worked with, met in a professional capacity (tradeshow, conference), is in your city/region and industry/profession. If you’d like to connect with someone you haven’t met, send a note with your request explaining who you are and why you’d like to connect. (This’ll be my topic in next week’s column.)
- Ask for recommendations and skill endorsements
This is vital to making your profile stand out! Employers want to know that others think of your work.
When asking for a recommendation, or skill endorsements, think of all the people you’ve worked the past. Don’t just think of your past bosses; also think of colleagues, vendors, customers — anyone who can vouch for your work and professionalism.
Instructions on how to ask for, and give, a recommendation, can be found by going to the LinkedIn ‘Help’ field (Located by clicking on the drop-down arrow below the ‘Me’ icon in the upper right-hand corner.) and typing ‘Requesting a recommendation.’ Do the same for skill endorsements.
TIP: It’s good karma to write recommendations, and endorse skills, in return and to give unsolicited.
- Keep your profile active
LinkedIn is not simply an online resume — it’s a networking social media site. To get the most out of LinkedIn, you need to be constantly active (at least 3 times per week). Write posts and articles. Check out what is being posted, especially by your connections. Like and share posts that resonate with you. Engage with thoughtful comments that’ll put forward your expertise.
Join groups that align with your industry and professional interests. Groups are an excellent way to meet like-minded professionals with whom to network and share ideas and best practices.
- Check your LinkedIn profile strength
It’s in LinkedIn’s interest that you’re successful using their platform. Therefore, they’ve created a ‘Profile Strength Meter’ to gauge how robust your profile is. Basically, this gauge tells you completion level of your profile. Using the tips, you’ll be given, keep adding to your profile until your gauge rates you “All-Star.” For instructions on how to access your ‘Profile Strength Meter,’ use the LinkedIn’ Help’ field.
The 10 tips I offered is a starting point for building a LinkedIn profile that WOWs! Jobseekers need to make the most of their profile to stand out in a sea of candidates, sell their skills, and validate their accomplishments. Make it easy for the reader to get a feel for who you are professionally.
Nick Kossovan, a well-seasoned veteran of the corporate landscape, offers advice on searching for a job. You can send him your questions at firstname.lastname@example.org.
Canadian National beats Canadian Pacific with $33.6 billion Kansas City bid
U.S. railway operator Kansas City Southern said on Thursday that it had accepted Canadian National Railway Co’s $33.6 billion acquisition offer, upending a $29 billion deal with its competitor Canadian Pacific Railway Ltd.
The development, first reported by Reuters, gives Canadian Pacific five business days to make a new offer for Kansas City Southern. Were Canadian Pacific to table a new offer, a bidding war could ensue.
Canadian Pacific had previously announced a deal to buy Kansas City Southern on March 21, before Canadian National said it had submitted a higher bid on April 20. The headline price in Canadian National’s cash-and-stock bid remains $325 per share as originally announced, though the company offered more of its shares to compensate for a decline in its stock price.
Canadian National has offered to cover the $700 million break-up fee Kansas City Southern will owe Canadian Pacific Railway Ltd. It will also pay Kansas City Southern $1 billion if the U.S. Surface Transportation Board (STB) rejects a voting trust structure it has put forward to complete the deal.
“We believe that Canadian Pacific’s negotiated agreement with Kansas City is the only true end-to-end Class I combination that is in the best interests of North American shippers and communities,” a Canadian Pacific spokeswoman said.
Canadian Pacific and larger rival Canadian National are in a race to take over the U.S. railroad operator, which would create the first direct railway linking Canada, the United States, and Mexico.
Either of them acquiring Kansas City Southern would create a North American railway spanning the United States, Mexico and Canada, as supply chains recover from COVID-19 pandemic-led disruptions.
The acquisition interest in Kansas City Southern also follows the ratification of the U.S.-Mexico-Canada Agreement last year that removed the threat of trade tensions, which had escalated under former U.S. President Donald Trump.
The STB last week approved the voting trust for Canadian Pacific’s proposed acquisition. Canadian National has offered an identical arrangement.
(Reporting by Sanjana Shivdas in Bengaluru; Editing by Shailesh Kuber, Aurora Ellis and Richard Chang)
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