November 7th, 2008

Embraer Day

Industrial Operations Overview

Artur CoutinhoExecutive Vice President

Industrial Operations

Agenda

• Embraer Products

• Industrial Operation Overview

• January 2007 Scenario

• Industrial Operation Plan

• 2008 Results and Production Readiness

Embraer Products

Under Development

ERJ 145

EMBRAER 170 EMBRAER 175 EMBRAER 190 EMBRAER 195

Executive

AviationLegacy 450/500Legacy 600 Phenom 100 Phenom 300 Lineage 1000

Defense

EMB-314 AEW

Comercial

Aviation

F5 BR up grade E190 PR

Under Development

• Embraer Products

• Industrial Operation Overview

• January 2007 Scenario

• Industrial Operation Plan

• 2008 Results and Production Readiness

Agenda

Embraer - Global Business

• Operations in Brazil, United States, Europe and Asia

BrazilSão José dos Campos

Eugênio de Melo Gavião Peixoto

BotucatuTaubaté

FranceVillepinte

Le Bourget

SingaporeSingapore

USANashville

Fort Lauderdale

ChinaBeijingHarbin

Portugal Alverca

Embraer Industrial Units - Brazil

Brazil

Eugênio de Melo - EGM

BOT

GPX

SJK São Paulo

EGMSão Paulo State

ELEB

São José dos Campos - SJK

TTE

Gavião Peixoto - GPX ELEB Botucatu - BOT Taubaté - TTE

• Embraer Products

• Industrial Operation Overview

• January 2007 Scenario

• Industrial Operation Plan

• 2008 Results and Production Readiness

Agenda

Jan 2007 Scenario - A Big Challenge

Flight Preparation

Tubing

Labor

Outsourcing

Painting

Machining

Sub - AssyBOT

Structural and Final Assembly

Others/New ProductsChemical

Milling

Sheet Metal SJK

Harness

Suppliers

Sheet Metal BOT

Cabinetry Shop

Composite

Deliveries

Final AssemblyFuselage Equipage

Mating and Complementation

Segments Phenom100/300

Ph100/300 Wing BOT

Wing EquipagePhenom100/300

Fuselage Equipage

Final AssemblyMating and

ComplementationSegments

Legacy/145

Legacy/145Legacy/145 Wing Wing Equipage

Underbelly Tank Assembly

E170 DockFuselage Equipage

Fuselage Mating E170/175

Wing EquipageE170 Wing - SJK

Segments E170/190/Lineage

E190 DockFuselage Equipage

Fuselage Mating E190/195

Wing Equipage

E170/190

E190 Wing - GPX

Bottlenecks

Under Control

Jan 2007 - Bottlenecks Management

jan feb mar apr may jun jul aug sep oct nov dec

Overtime - Actual Overtime Planned

2007 Scenario - Overtime

VOP Overtime

• Embraer Products

• Industrial Operation Overview

• January 2007 Scenario

• Industrial Operation Plan

• 2008 Results and Production Readiness

Agenda

2006 VOP Organization

Industrial

Operation - VP

Industrial Operation Planning

Gavião Peixoto Unit

Procurement Botucatu UnitProductionProduct Quality

Logistics

CEO

Industrial Strategy

2007 VOP Organization

Industrial

Operation - VP

CEO

Logistics & Production

Control

Gavião Peixoto Unit

Supply Chain Botucatu UnitFabrication SJK/EGM

Product Quality

Final Assembly

SJK

Industrial Op. Integration

Commercial Aviation

Industrial Op. Integration

Executive Aviation

Industrial Strategy

Introduction to the ‘Lean Concept’

2006� Phenom 100/300 Final Assembly� Production ‘in line’ concept

� Standardized work

� Operator fixed at work station

� Supermarket concept

� Visual management

� Logistic� Delivery at point of use

� Production Control� Only one production order

� Outsourcing� Applied lean concept

SJK Plant

P3E Program - Lean Concept

Co

nti

nu

ou

s

Imp

rove

men

t C

ell

s

Lean

P

roje

cts

(K

aiz

en

s)

Lean Philosophy

Results

Continuous

Culture

Leadership

People

2007/2008 - Extensive Application of Lean Philosophy

Tubing

Composite

E190 Wing Assembly

Phenom Final Assembly

Supply Chain

Legacy Fuselage Mating

E170/190 Structural Assembly

Surface Treatment

Chemical Milling

Cabinetry Shop

Harness

Harness

Jun/07

May/08

18/ju

n27

/jun

5/ju

l13

/jul

23/ju

l31

/jul

6/ag

o13

/ago

21/a

go29

/ago

6/se

t17

/set

26/s

et2/

out10

/out

18/o

ut26

/out

5/nov

20/n

ov30

/nov

3/ja

n14

/jan

7/fe

v25

/fev

11/m

ar27

/mar

11/a

br24

/abr

19/m

ai5/

jun

18/ju

n

Jun/07 Jun/08

Missing Items – All Programs

Lean Implementation

Released Area: 20%

Harness

Jun/07 Jun/08

Released Area: 20%

� Parts and tools close to their point of use

� Operator's ergonomic improvements

Lean Implementation

Tubing

� Production Increase: 1,400 to 2.000 parts/day

� Released area for future expansions

Mar/08Aug/07

Lean Implementation

Released area

Pylons

E190

� Production Flow Optimization

Mar/08Aug/07

E170

Composite

Mar/08Aug/07

� Working Cell

� Operator fixed on the working place

� Production Visual Management

� Production Increase: over 60%

� Operator’s movements/day: 49

� Walking distance: 3,600 ft

Lean Implementation

Composite Structural Assembly

Aug/07 May/08

� Layout Reviewed: assembly “line” concept

� Operator’s movements drastically reduced

� Visual Management� Production Increase: 121%

Operator’s movements(feet traveled)

Legacy 600 Fuselage Mating

Out/07 Mar/08

� Operator’s movements reduction

� Tool kit organized close to the assembly place

� Parts and tools close to their point of use

Leading Edge Assembly

Aug/07 May/08

� Leading and trailing edges assembly reorganization

� Operator’s movements reduction

� Parts and tools close to their point of use

2007-2008 SJK Plant – Investments

Painting Booth -Composites

Structural Assembly Building - Composites

Wing to Fuselage Mating -E170/190

Examples

New Router Machine -Composite

2007-2008 SJK Plant – Investments

Paint Booth Improvement (F210)

Shot Peening

Paint Booth Retrofit (F41)Examples

2007-2008 BOT Plant – Investments

BOT Plant Expansion

Examples

Skin Panel Fabrication

Hangar

PhenomStructural Assembly

Hangar (2nd)

Structural Assembly

Hangar Expansion

CalenderStretch Press

Examples

2007-2008 BOT Plant – Investments

� Panels Structural Assembly

Examples

Riveting Machines

Large Panels Riveting Machine

2007-2008 BOT Plant – Investments

2007-2008 Gavião Peixoto Plant – Investments

Phenom 100 & 300 Final Assembly & Completion Hangar

Phenom 100 & 300 Painting BoothCabinetry Shop Expansion

Gavião Peixoto Plant

2007-2008 Gavião Peixoto Plant – Investments

3Q/2007

1Q/2008

Phenom 100/300 Final Assembly Hangar

Total Area: 130,000 sq.ft

StorageCompletion Center

Supermarket

Final Assembly Line Phenom 100 & 300

2007-2008 Gavião Peixoto Plant – Investments

� Phenom New Painting Booth

2007-2008 Gavião Peixoto Plant – Investments

� E190 Wing and Defense Aircraft Painting Booth

2007 Deliveries

Robots

•Drilling

•Phenom 100/300 Horizontal Stabilizer

•E170 Wing

•E170/190 Fuselage Mating

• Inspection (Composite)

•Painting Preparation (Composite)

Machines (Composite)

•ATL

•Router

Logistic

•Automated Picking

System

2007-2008 Automation Projects

SJK BOT GPX

Robots

•Drilling

• Phenom 100 Wing

• Phenom 300 Wing

Machines

•Riveting

• Panels

• Large Panels

• Phenom 100&300

Nacelle

Robots

•E190 Wing Drilling

Machines

•E190 Spar Automatic

Riveting

Others

EGM

•Welding Robot

ELEB

•Shot Peening Robot

Paperless

Legacy 450/500

•Automatic Structural

Assembly Cell

•Automated Final

Assembly Line

Automation – Investments (1/3)

Wing Automatic Drilling

Phenom 100

Large Panels

Automatic Riveting

E190/195

Fuselage Mating

E170/190

Wing Automatic Drilling

E170/190

Automation – Investments (2/3)

Automatic Tubes Welding

Automatic Stripping Machine

Nacelle Riveting

Phenom 100&300

Bulkhead and Spar

Automatic Riveting Phenom 100

Automation – Investments (3/3)

Positioning

Drilling

Hinges / Drilling

Riveting Complementation Packing

Phenom 100

Start-up in 4Q/08

Phenom 300

� Phenom 100&300 Horizontal Stabilizer Assembly: Lean

Concept Automation

Centers of Excellence, Évora - Portugal

� New units to produce metallic airframe structures and composites

components and assemblies

Legacy 500

• Embraer Products

• Industrial Operation Overview

• January 2007 Scenario

• Industrial Operation Plan

• 2008 Results and Production Readiness

Agenda

Flight Preparation

Tubing

Labor

Outsourcing

Painting

Machining

Sub - AssyBOT

Structural and Final Assembly

Others/New ProductsChemical

Milling

Points of Attention

Under Control

Sheet Metal SJK

Harness

Suppliers

Sheet Metal BOT

CabinetryShop

Composite

Deliveries

Final AssemblyFuselage Equipage

Mating and Complementation

Segments Phenom100/300

Ph100/300 Wing BOT

Wing EquipagePhenom100/300

Fuselage Equipage

Final AssemblyMating and

ComplementationSegments

Legacy/145

Legacy/145Legacy/145 Wing Wing Equipage

Underbelly Tank Assembly

E170/190

E170 DockFuselage Equipage

Fuselage Mating E170/175

Wing EquipageE170 Wing - SJK

Segments E170/190/Lineage

E190 DockFuselage Equipage

Fuselage Mating E190/195

Wing EquipageE190 Wing - GPX

4Q/2008 Scenario - Bottlenecks

jan mar may jul sep nov jan mar mai jul set nov

Overtime - Actual Overtime - Planned

2007-2008 Scenario - Overtime

VOP Overtime

2007 2008

2008 VOP Organization

Industrial

Operation - VP

CEO

Logistics & Production

Control

Gavião Peixoto Unit

Supply Chain Botucatu UnitFabrication SJK/EGM

Product Quality

Final Assembly

SJK

Industrial Strategy

4552 48

0

10

20

30

40

50

60

70

80

90

100

1st Q 2nd Q 3rd Q

2008 Deliveries

Total Planned Deliveries: 195-200 A/C

Phenom 100 Planned Deliveries: 10-15 A/C

A/C

Phenom 100 – Production Readiness

� Status in Oct 29th

Phenom 100/300 Final Assembly Hangar

A/C in final assembly line: 11

Thank You!

Ready to go!