Metalworkers' Union defends veto on sale of Embraer for Boeing
The slice acquired by Boeing is the most profitable part of Embraer.
The Metalworkers' Union of São José dos Campos (São Paulo, Brazil) is carrying out an extensive campaign against the sale of Embraer, a Brazilian aircraft manufacturer, to Boeing, a US company, With the announcement of an agreement between the two companies, released on July 5, the union charges the Brazilian Federal Government and the National Congress with a veto over the operation that endangers national sovereignty as well as thousands of jobs in Brazil's aeronautics industry.
The joint venture between Embraer and Boeing is no ordinary business. The Brazilian company is the third largest exporter in Brazil. It is second only to mining giant Vale and oil company Petrobras. It is the only sector of intense technology that has a surplus in the Brazilian trade balance.
Embraer is now living the best moment in its financial history. Last year, the company's net income was R $ 795.8 million, 35.9% higher than the previous year.
The firm order backlog also proves the good momentum of the company. Up to December 31, 2017, Embraer had a total of 435 aircraft ordered, worth US $ 18.3 billion. To get an idea of the size of the bad business, the company is being sold for $ 3.8 billion, a fifth of the sum of the order backlog.
The slice acquired by Boeing is the most profitable part of Embraer. The executive and military aviation sectors will be left to Brazil, which can hardly survive without the profits generated by commercial aviation.
The union is against the sale of Embraer because it is seriously concerned about the company's future. The joint venture agreement does not guarantee the arrival of new aircraft development and assembly projects for Brazil. Offering such a guarantee would go against the logic of the company's performance in the global market and would be an affront to the protectionist industrial policy of the US government.
This combination will not bring benefits to Brazil and endangers 25,000 direct and indirect jobs, only in the region of São José dos Campos, the company's headquarters. Since the sales plans were released at the end of last year, layoffs do not stop happening at Embraer. Although the Union does not have access to official figures, it is estimated that this year some 300 employees have already been laid off.
Boeing has no plants outside the United States, has a history of shutting down factories after merging with other companies and, in the last five years, it laid off 36,000 workers.
The Federal Government and the National Congress are the ones who are in a position to defend the interests of Brazil. The president is able to block the transaction, using the special share of the type Golden Share, which gives him power to veto certain decisions relating to Embraer.
The company was privatized in 1994 and even though it still receives public money through financing, tax incentives and contracts. The Metalworkers Union defends its re-nationalization under workers' control.
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