Embraer to adjust production after Boeing deal fails to take off

The company said it is taking measures to preserve liquidity

Boeing backed out from a planned deal to buy 80 per cent of Embraer's commercial plane making business. AFP

Brazil-based planemaker Embraer said that after a $4.2 billion (Dh15.4bn) deal with Boeing fell apart over the weekend, it is working on adjusting production levels and capital expenditures, as well as working to preserve cash.

The company added in a statement that it finished 2019 with a "solid cash position" and had no "significant debt in the next two years."

"We are taking additional measures to preserve our liquidity and maintain our solid finances during these turbulent times," the company added.

Other measures include adjustments to inventory, an extension of payment cycles, reduction of expenses and seeking financing, Embraer said.

The deal between Embraer and Boeing was announced almost two years ago and the companies were in the closing stages before it fell apart. Boeing was to take 80 per cent of Embraer's commercial aviation division, which makes planes of up to 150 seats.

Boeing and Embraer had already received antitrust approvals from all necessary governments except for the European Union, and Embraer had spent millions carving out the business segment that Boeing would take over.

Embraer, the world's third-biggest planemaker, saw the deal as necessary for its long-term survival as the Boeing-Airbus duopoly has strengthened.