Embraer has become the target of a protectionist campaign in the United States, whose goal is to prevent it from winning an Air Force contract worth nearly $1 billion.
The Brazilian company is participating in an Air Force competition to supply 20 airplanes (the quantity could reach 55) to be used in Afghanistan and the US. The Embraer Super Tucano is competing with the American AT-6 from Hawker Beechcraft, which joined forces with Lockheed Martin for the competition.
The protectionist offensive is occurring at three levels: legislators from Kansas, where Hawker is based, requested the opening of an investigation by the International Trade Commission (ITC) to determine whether Embraer is receiving subsidies from the Brazilian government, which would be illegal.
At the same time, defenders of Hawker launched a public relations campaign pressuring the Department of Defense to give the contract to an American company, because a win by Embraer would eliminate 1400 American jobs during a recession and would “outsource the national security of the US, leaving it in the hands of a foreign company.”
Finally, Hawker is preparing to attack Embraer on its most vulnerable flank. “It is impossible that a company being investigated for corruption continues to participate in the competition: we will request that Congress establish a commission of inquiry regarding the contract,” Todd Tiahrt, who was a Kansas representative for 15 years and is now a consultant to Hawker, told Folha.
Embraer is the target of an investigation by the Securities and Exchange Commission over possible violations of the Foreign Anticorruption Act.
Embraer only sent a statement.
“This investigation (by the SEC) is just an investigation, and any conclusions about its potential outcome are premature,” wrote Jackson Schneider, Vice President of Institutional Relations for Embraer. Sought out several times, Hawker did not comment.
The result of the bidding was scheduled for June. It was postponed until September, and now is expected to come out by January.
The ITC, a branch of the US government, is investigating the competitiveness of the American jet aircraft industry and the “government policies and programs affecting funding and research of aircraft” from Brazil, China, Europe and Canada. ITC officials have already been to Brazil to gather information about Embraer.
In the case that the report shows that Embraer receives subsidies, Beechcraft can pressure the USTR to open a WTO complaint.