A future Embraer renationalization process (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 breaking a US$4,2 billion contract with the Brazilian manufacturer.

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Embraer has already triggered arbitration proceedings against Boeing in search of compensation due to the termination of the North American's contract on Saturday (25) - which alleged that the Brazilian company failed to comply with the obligations of the sale process.

According to the vice president of Brazil, the US company's claims to end the deal were "false".

In the senator's understanding, “Embraer generates 17 direct jobs and 5 outsourced jobs, and is the third largest exporter in the country. The crisis we are going through has highlighted the importance of articulating State and market in efforts for the country to develop, including in technology. The liberal prescription, of reduction of the State and privatizations, increases the external dependence, with implications in the economic activity”, justified the parliamentarian.

He adds that the Brazilian manufacturer Embraer has 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, it considers its “delivery” (sale to a foreign competitor) as “a risk to sovereignty” and technological development.

Embraer Privatization

The privatization of Embraer in 1994 granted the federal government a “golden share”, whereby the company's strategic decisions, such as partnership processes with foreign companies, would need government approval to take place.

Both Embraer and Boeing are experiencing difficulties, exacerbated by the impact of the coronavirus. The US government is studying a financial bailout for Boeing.

Embraer's shares on the São Paulo Stock Exchange have already fallen by almost 60% in 2020, while risk rating agencies have taken the Brazilian company's "investment grade" down.

In an official statement on Monday, Embraer guaranteed “not to suffer liquidity problems”.

por- The Senate Agency