Brazil’s Embraer Enters Partnership with U.S.’s Boeing

By Lise Alves, Senior Contributing Reporter

RIO DE JANEIRO, BRAZIL – After months of discussions and negotiations, Brazil’s Embraer and U.S.’s Boeing announced on Thursday morning (July 5th) that they signed a memorandum of understanding to establish a strategic partnership between the companies to accelerate growth in global aerospace markets.

According to the document the U.S. aircraft manufacturer will have eighty percent of the new joint venture while the Brazilian manufacturer will hold the remaining twenty percent of the stake.

“The agreement with Boeing will create the most important strategic partnership in the aerospace industry, strengthening both companies’ leadership in the global market,” said Paulo Cesar de Souza e Silva, Embraer Chief Executive Officer and President.

According to Souza e Silva the deal is expected to create ‘a virtuous cycle for the Brazilian aerospace industry, increasing its sales potential, production, creating jobs and income’.

On Wednesday, Brazilian Air Force commander, Nivaldo Luiz Rossato, told representatives of the Committee on Foreign Relations and National Defense that Embraer should analyze partnership proposals with other companies, since it needs resources to develop its projects.

During the Congressional hearing, Defense Minister, Joaquim Silva and Luna, said that the budget has been insufficient for the necessary investments in various sectors of Brazil’s air and space industry. Some congressional representatives, however, continue to be weary of effects of a foreign partnership on the country’s sovereignty and intellectual property rights.

“It’s a crime against our sovereignty,” said representative Carlos Zarattini of the Workers’ Party (PT). “We are delivering to foreigners the aeronautical development done by engineers here,” he argued.

“Boeing said it intends to renew its engineering staff with Brazilian professionals. So the Brazilian engineers will be transferred to the United States? And who will ensure that the production of the aircraft will not be transferred in two or three years from now?” concluded Zarattini.

Asked by lawmakers about the effect of the sale of part of Embraer to Boeing, Rossato said that the negotiations preserve the Brazilian company’s sovereignty in the area of national defense.