Brazil's Embraer to furlough 15,000 workers ahead of Boeing deal
Reuters
Published Oct 10, 2019 06:35PM ET
Brazil's Embraer to furlough 15,000 workers ahead of Boeing deal
SAO PAULO (Reuters) - Brazilian planemaker Embraer SA (SA:EMBR3) will furlough almost 15,000 workers in January, the company said, ahead of a partial takeover by Boeing Co (N:BA), a deal that still needs regulatory approval.
Salaries will be paid as normal during the furlough, which will last between Jan. 6 and Jan. 20, according to the company, as well as the metalworkers union representing several thousand of Embraer's workers.
Boeing has agreed to buy 80% of Embraer's commercial plane division for $4.75 billion, a deal approved by shareholders and the Brazilian government but which is undergoing an intensive regulatory investigation in Europe.
"The objective [of the furlough] is to implement the internal segregation of the commercial aviation business," Embraer said in a statement.
It is unlikely that the deal will have received regulatory approval by Jan. 20 as European authorities have set a Feb. 20 deadline to issue their decision on the deal. The company said that workers will return to their normal functions at Embraer, without any Boeing involvement, until the deal is approved.
Embraer said this month that it expects the deal to close in early 2020, in the wake of the additional regulatory scrutiny. Previously, Embraer had said the deal would close by the end of 2019.
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Written By: Reuters
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