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A future process of re-nationalization of Embraer (PL 2.195/2020) was presented by Senator Jaques Wagner (PT-BA to the Senate to guide the participation of the National Bank for Economic and Social Development (BNDES) after Boeing terminated a $4.2 billion contract with the Brazilian manufacturer.
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Embraer has already initiated arbitration procedures against Boeing seeking compensation due to the termination of the American company’s contract on Saturday (25) – which claimed that the Brazilian company failed to comply with obligations of the sale process.
According to the Vice President of Brazil, the allegations made by the American company to end the deal were “false”.
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In the senator’s view, “Embraer generates 17,000 direct jobs and 5,000 outsourced jobs, and is the third-largest exporter in the country. The crisis we are going through has exposed the importance of articulating state and market efforts to ensure the country’s development, including in technology. The liberal recipe of reducing the state and privatizations increases external dependence, with implications for economic activity,” the parliamentarian justified.
He adds that the Brazilian manufacturer Embraer holds technology in the development and production of military, commercial, agricultural, and executive aircraft, as well as aerospace parts, satellites, and equipment for border monitoring. Therefore, he considers its “delivery” (sale to a foreign competitor) as “a risk to sovereignty” and technological development.
Privatization of Embraer
The privatization of Embraer in 1994 granted the federal government a “golden share,” through which the company’s strategic decisions, such as partnerships with foreign companies, would require government approval.
Both Embraer and Boeing are facing difficulties, exacerbated by the impact of the coronavirus. The U.S. government is studying financial assistance for Boeing.
Embraer’s shares on the São Paulo Stock Exchange have already fallen nearly 60% in 2020, while rating agencies have stripped the Brazilian company of its “investment grade”.
In an official statement on Monday, Embraer assured that it is “not facing liquidity problems”.
by – Senate Agency
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