tuesday, 31 july of 2018


Embraer will defend itself against legal challenge to Boeing talks

Embraer said on Monday it will defend itself against a lawsuit brought by leftist lawmakers aimed at halting a bid by Boeing Co to take over most of the Brazilian planemaker´s commercial jet unit, the latest legal headache for the proposed tie-up.

The lawsuit, filed by four congressmen for the left-wing Workers Party against the federal government and Embraer, seeks an injunction to freeze talks between the two planemakers, the Brazilian company said.

While Embraer is a private company, the government holds a special stock that grants it veto power over major business decisions.

The lawsuit is just the latest headache for a deal that has drawn fire from critics worried about its impact on Brazilian jobs and those concerned about Embraer´s financial viability without the lucrative commercial jet unit.

The proposed deal with Boeing would not include Embraer´s defense and executive jets business, where the Brazilian government would maintain veto power.

A Brazilian labor judge this month rejected a call to make the proposed acquisition dependent on a pledge to preserve all local jobs at the company.

That injunction request was filed by Brazil´s labor prosecutors, a special group that investigates potential violations of the country´s strict labor laws. They responded to the judge´s rejection by announcing plans for a civil lawsuit against the government.

Embraer executives said earlier this month they do not expect to finalize the deal until late next year, forcing Embraer to compete single-handedly against the European and Canadian rivals.

(Published by The New York Times, Jul 30, 2018)

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