Presented by José Serrador Neto - Director, External Relations and Foreign Trade Policy of Embraer, during the XIV Brazil-Japan Joint Economic Committee Meeting, that took place in the city of Salvador, in Brazil, during august 9th and 10th of 2011.

1. Embraer: Innovation and Technology
XIV Japan Brazil Joint Economic Committee Meeting
Salvador, August 9-10, 2011
José Serrador Neto
Director, External Relations and Foreign Trade Policy

2. Aviation Challenges…
Climate Change Peak Oil
Safety
Financial Crisis
Security
ATC Congestion
Passenger Factors

3. … and the Technology Solutions
New Aircraft Concept
 New Engines Efficient Energy Management
 New configurations  New sources
 Active drag reduction systems  Integrated management
 Advanced materials  Electrical systems with high-reliability
… . …
Safe operation
Aircraft Life-Cycle Management  Improved onboard weather
 Highly-integrated, multi-disciplinary
systems and tools
product  Human-machine integration
 Lean Development and Manufacture
…
 Low operational cost through health
management system
 Green Life Cycle (manufacture,
operation, maintenance and disposal)
… . Secure Aircraft
 Protection against short range
missile attack
Operation in High-density  Detection of abnormal trajectory
Comfort and Onboard Features Environment to engage automatic control
 Fast boarding patterns  Pilot workload management &  Biometry Systems
 New systems and installations Single Pilot …
 New displays  Advance integration with ATC
… .  4D Trajectories
…

4. Aerospace Industry Fundamentals
SUCCESSFUL
BUSINESS
High Tech & Qualified Global Cash Flexibility
Innovation People Presence Intensiveness
Customer Satisfaction
Base of our entrepreneurial action

5. Innovation @
Embraer

6. 4 Dimensions of Innovation @ Embraer
Product Innovation Processes Innovation
Phenom™ 100
Oval Lite®
Seat
Manufacturing Capacity
Integrated Product Teams
Commercial Customer (Functions Integration) rt
Support pp
o 160
Product Su gt Narrowbody Aircraft
ics er sM
ut s om er
Core Team Development na em st
ro st r tn
Ae Sy Cu Pa
Program ....
Management 120
Right-sizing
Partners
Fuselage I EMBRAER 170/190
Management 80
Natural Growth
Wing
Quality 30-70 Seat
T’ Props 37 -50 Seat
Design Build Teams 40
(Physical integration)
ERJ 135/140/145
Empennage
....
0
Organizational & People 0 500 1,000
Stage Length (nm)
1,500 2,000
Innovation Innovation in Marketing
With the Backbone of Technological Development

7. Dimension (1): Product Innovation *(1/2)
Main design drivers Commercial
for Light Jets Phenom 300 aviation experience
• A TRUE “clean sheet” design
• Designed for high
• Premium comfort utilization
• Outstanding climb and speed • High availability
while maintaining short field
performance • Low operating cost
• Systems with next generation
technologies that enable
efficiency

8. Dimension (1): Product Innovation (2/2)
Double Bubble E-Jets
 Spacious cabin
 Four abreast seating:
 No middle seat
 Easy access to bins & seats
 Fast boarding & deplaning
 Large headroom
 Superior ground service access
and baggage handling
 EMBRAER 170/190 Cabin is
Superior to any Mainline
Standards
8
FC 14/Nov/02

9. Dimension (2): Process and supply chain (1/2)
S T OMMI C but t on
A C
G CU 1 S A C O A D b ut t n
T M U o
Raw material Segments Equipment Avionics
Parts manufacturing
Minor segments
assembly
Major Segments
assembly
Final assembly
Fuselage matching and
equipment installation Painting

10. Dimension (2): Process and supply chain (2/2)
“Dock” layout - 2008 Assembly Line – 2009 Assembly Line – 2011
Process Innovation
Performance indicators May/2008 July/2009 Sep/2009 June/2010 Mar/11 Out/11
Number of positions 100% 50% 50% 33% 33% 33%
Cycle time (days) 100% 67% 56% 44% 44% 39%
Work in process (US$mi) 100% 50% 45% 42% 32% 32% 3P Kaizen
Number of non-conformity
per a/c
100% 22% 5% 0% 0% 0%
Example
Over time (% of work
hours)
100% 15% 15% 2% 0% 0%

11. Dimension (3) : Organizational and People Innovation (1/2)
Number of Employees… …minimum high school level
High School
21843 21550 65%
17503 16853 17149 17194
14493 15192
12227 12789
10334 11048
8302
6087 6737
4319 3849 4494
Ph.D.
2%
94
95
96
97
98
99
00
01
09
10
02
03
04
05
06
07
08
1
01
20
20
20
20
20
20
20
19
19
19
19
19
19
20
20
20
20
e/ 2
jun
Postgraduate Graduate
4% 29%
+17.000 Emplyees (+ 3100 engineers)
BRAZIL 16,002 FRANCE 257 SINGAPORE 63
USA 810 CHINA 59 PORTUGAL 3
(Not including employees in Brazil (Atech – 115 and Orbisat – 135) and JVs' employees in China (HEAI) - from 2003 on - and in Portugal (OGMA) - from 2005 on, these two sites have at the present time 213 and
1.500 employees, respectively)

12. Dimension (3) : Organizational and People Innovation (2/2)
Engineering Experience
60%
2000
Engineering Man Power %
50% 52%
40%
2007 31%
30%
33%
19%
20% 18%
18%
10% 17%
12%
0%
Level 1 Level 2 Level 3 Level 4
12

13. 25
50
75
DC9
seats
70-110
F100
100
B737 B737
MD80
Seats
B737
A320
A320
B737
125
A320 B737
B737
B737
Dimension (4): Marketing Innovation (1/2)
A320
MD80 MD80
MD80 B737
B737
150
A320
A320 B737 B737
A320
+
175
B757 B757
B757 B757 B757 B757

14. Dimension (4): Marketing Innovation (2/2)
June 2001
NYC - Mid-Manhattan
NYC - Mid-Manhattan
NYC - Wall Street
NYC - Wall Street

15. The Backbone: Technological Development Program
Aircraft Health
Management
Interiors Design & Collaborative Product
Noise & Emissions Development Advanced Aerodynamic
Comfort
Tools and Solutions
Design for Manufacturing &
Automation
Evolution through Alternative Fuels
Innovation
Energy Fly-by-Wire CNS/ATM Avionics Systems
Design for Service
Management
Airborne Software Development
Advanced Structures –
Composites / Metallic.
Multidisciplinary
Smart Material, Morphing
Design Optimization
Structures

16. Technology Development Strategy
Technology Needs
Prospective Scenarios Future Products Concepts
Geopolitics; Economy; Energy; Infra- Configuration; Features;
structure; Environment; Innovation. Performance; Technical Challenges.
Technology Outlook
Technology Trends
R&T Initiatives; Public Policies; Technology
Regulation. Development Strategy
Technology Agenda
Roadmap & Portfolio

17. Policies: Aerospace industry
U.S. – “Aerospace will be EUROPE - “Aeronautics
at the core of America’s is a key asset for the
leadership and strength in future of Europe.
the 21st century.
CANADA – “As one of Canada’s key high technology sectors, the aerospace and defense industry is an
important sector in the Canadian economy.

18. Technological Development and the role of
Governments
• Given the high risk of innovation/technology development in Aerospace,
Governments play an important role in supporting new technologies
development, mostly for pre-competitive R&D (low TRL)
• On the other hand, international competition is becoming increasingly hard
as new entrants develop new aircraft. Several countries being supported not
for pre-competitive R&D but in Launch Aid.
• Launch Aid distorts competition and, besides the fact that it is not WTO
compliant, triggers a subsidy rush bringing to the market products that
otherwise would not be launched.
• As the OECD Export Finance Agreement, Embraer advocates a “level
playing field” in Government assistance for aircraft development providing
that, competition is governed by market rules and not Government support.