Further problems have hit Boeing’s intended purchase of a controlling 80 percent stake in the commercial aircraft arm of Brazilian planemaker Embraer with the intervention of leftist lawmakers who have brought a lawsuit aimed at halting Boeing in its tracks.
Filed by four congressmen representing the left-wing Workers Party, the lawsuit is seeking an injunction to freeze talks between Embraer and Boeing. While Embraer is a private company, the Brazilian government holds special stock that affords it right of veto over major business decisions.
The deal proposed by Boeing does not include Embraer’s defense and executive jets business, but there is considerable concern that without the commercial jets’ arm, company viability is under threat.
Earlier this month a Brazilian labor judge rejected a proposal to ensure that all jobs at Embraer would be preserved if Boeing’s acquisition is successful. That injunction request was filed by Brazil’s labor prosecutors who specialize in potential violations of the strict labor laws. Subsequent to the injunction’s rejection the group has announced plans for a civil lawsuit against the government.
In view of the ongoing problems, Embraer anticipates that in the event Boeing are successful with the acquisition, it is unlikely to happen until the end of next year, leaving it particularly vulnerable in light of the recent Bombardier CSeries and Airbus tie up, resulting in the new A220 family.
