Aircraft manufacturers Boeing and Embraer still have the details of purchase of the Brazilian company by the North American. Under the preliminary agreement announced in July, Boeing will pay $ 3.8 billion for 80% of the commercial aviation area of Embraer. The Brazilian company will hold executive aviation and defense activities.
Contrary to the agreement, the Metal Workers' Union of São José dos Campos (SP), the headquarters of Embraer, wants another and controversial exit: the relocation of the company –privatized in the nineties. According to Herbert Claros, director of the entity, this would be the best alternative for the future of the company.
"Other large companies in the industry are state owned, such as Russia and China, which would give Embraer a further guarantee of sustainability," he said.
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For the union, the government could buy Embraer back by paying the same $ 3.8 billion offered by Boeing. However, he could not say where the money would come from, as the government tries to reduce expenditure to keep the public accounts in balance.
We defend that Brazil thinks like a power, not a colony. We must believe in our potential.
Herbert Claros, of the Metalworkers' Union of São José dos Campos
Is this a feasible solution in practice and legally possible? the Privacy policy heard experts. This is what they say:
Statelessness would drive away investments, says expert
A final stabilization of Embraer would entail very high financial costs, in addition to generating a loss of credibility in the market, according to Mario Nogueira, a partner of NHM Advogados and a specialist in mergers and acquisitions. For him, the measure can lead to companies stop investing in Brazil for fear of being nationalized at any time.
Investors would see the country as an unstable place and everyone would stay behind. It would take a long time to regain confidence in the country.
Mario Nogueira, from NHM Advogados
Moreover, a nationalization would require the government to reimburse the shareholders. According to Nogueira, the government would obscure the company without financial compensation. "It would be a robbery, the state has to pay for what is being taken," he said.
Can the next president choose Embraer?
The nationalization of Embraer would be a difficult task, even for a leftist president who eventually won the elections in October, according to Fabio Falkenburger, an infrastructure partner at Machado Meyer Advogados and an aviation specialist. Ciro Gomes, from the PDT and the PT economist Márcio Pochman have already opposed the Embraer-Boeing agreement.
Falkenburger said that the president would have to prove a very large public interest – such as defending Brazilian sovereignty, for example – to nationalize the company. Moreover, the theme should go through Congress, which would require a great effort to get support.
In an economic environment like Brazil today, I find it very difficult [estatizar]. It is something that does not fit in with the democratic and free-economic regime in which we live.
Fabio Falkenburger, from the Machado Meyer Advogados office
The popular vote would be fairer, says the trade union
Another suggestion from the union is to hold a popular plebiscite to decide on the sale of Embraer to Boeing. According to Claros, this would be a fairer way to decide on the subject. "The people must represent the Union," he said.
The Brazilian government has a "golden share" – a special class of action that gives right of veto in important decisions, such as the sale of company control – at Embraer. That is why the sale to Boeing requires the approval of the Union.
However, this possibility would also be difficult to implement due to time and costs. According to Nogueira, from NHM Advogados, it would take at least a year for the population to have an opinion on the sale of Embraer.
"It would be a sort of election campaign, there would have to be debates with opinions against and for, radio and TV propaganda, distribution of electronic ballot boxes, it is a very complicated and expensive thing to do," he said.
For Falkenburger, of Machado Meyer, there is no point in holding a plebiscite for a technical decision, such as the sale of a company. "It is a huge cost for a decision that the citizen can not decide for himself," he said.
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