The Embraer E-Jet series of a narrow-body, twin-engine jets are used in standard commercial routes and for regional service. The E175 seats 78 to 88 passengers, while the larger E190 and E195 jets seat 100 to 124 passengers.

Labor Interests Challenge Boeing-Embraer Venture

April 3, 2018
Brazilian labor stirring opposition to government consent to combining commercial aircraft interests

The Boeing Co. and Embraer S.A. have been silent for several weeks on the progress of negotiations toward their proposed partnership, though the prospective venture is in the news again due to apparent Brazilian labor opposition. Union leaders there have accused Brazilian government officials with negotiating secretly to sell a stake in the Embraer commercial aircraft business, against the interest of workers.

“We ask President Temer not to sell Embraer,” Herbert Claros da Silva, a labor union leader testified in a Brazilian Senate human rights committee hearing on the proposed sale. Brazilian leaders and Embraer officials did not appear at the hearing.

Neither Embraer nor Boeing has commented on the opposition.

Embraer is a formerly state-owned aircraft designer and builder, now privately controlled. However, the government retains a “golden share” in the business, giving it authority over the sale of the controlling interest.

In January, Boeing proposed establishing a joint-venture with Embraer to operate that company’s commercial aircraft business. Embraer’s defense aircraft division would not be involved in the new venture, and reportedly the government’s golden share would be preserved in the joint-venture ownership.

Embraer is the world’s third-largest aircraft designer and builder. Boeing’s interest in the joint venture is to expand its position in the industry’s midsized and regional jet (70-130 seats) sector. Not coincidentally, it was for that market segment that Bombardier Inc. recently introduced its CSeries aircraft series.

Boeing challenged a sale of the CSeries aircraft as unfair trade practice, and Bombardier subsequently sold a half interest in the CSeries program to Airbus S.A.

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