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Seattle, Washington - Boeing has announced that it terminated joint-venture talks with Embraer. The negotiations for the acquisition of the Brazilian planemaker's commercial jet division were started in 2018.

“It is deeply disappointing. But we have reached a point where continued negotiation within the framework of the [merger transaction agreement] is not going to resolve the outstanding issues,”

said Marc Allen, president of the Embraer Partnership and Group Operations, in a Boeing news release.

The deal was meant to help Boeing grow even stronger in commercial aerospace to better compete with European rival Airbus. Airbus, for its part, has already taken a stake in what’s now called the A220 passenger-plane program of Canada’s Bombardier.

The collapse of the Boeing-Embraer deal comes as the aerospace industry is in crisis because of the coronavirus. Thousands of jets around the world are grounded as air travel demand has dried up in the pandemic and shelter-in-place orders that aim to stop it from spreading. The crisis has put airlines on a shaky financial footing that’s destroying demand for new jets and accelerating retirements of older planes.

Boeing announced the terms of the deal in July 2018, which would have given Boeing control of Embraer’s commercial aerospace arm, which makes passenger planes that are smaller than Boeing’s. Much has changed for Boeing since the talks were first disclosed in late 2017. Two of its 737 MAX planes, its best-seller, crashed, one in Indonesia in October 2018 and another in Ethiopia in 2019, killing all 346 people on both flights.

The 737 MAX has been grounded since March 2019 and cancellations are piling up, promising a painful year for the Chicago-based company. Boeing is expected to provide more detail about the deal and further plans to cut costs when it reports first-quarter results before the market opens on Wednesday.
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