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June 14, 2024
Boeing sued in Brazil for talent poaching
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Defending the Brazilian State’s interest, two class entities filed a lawsuit against Boeing: the Brazilian Association of Defense and Security Material Industries (ABIMDE) and the Association of Aerospace Industries of Brazil (AIAB). Boeing is being sued in Brazil for talent poaching.

These entities are the authors of a public civil action that aims to make Boeing interrupt its “systematic capture and hiring of engineers from companies that are part of the country’s Industrial Defense Base.” The co-option of highly qualified Brazilian professionals places the survival of Brazilian companies at risk. Moreover, this also threatens national sovereignty. One of the foundations of the Brazilian Federal Constitution is provided for in article 1, item I. Employing public civil action, ABIMDE and AIAB intend to stop Boeing from co-opting highly qualified engineers from strategic companies for Brazil.

The impact is already significant: ten of the most important strategic companies in the defense sector have already had engineers co-opted by Boeing. Some lost about 70% of the team in specific and essential areas for the business“, explained Roberto Gallo, president of Abimde.

This is a strategic issue for Brazil and national sovereignty, representing the State’s autonomy over its political, social, military, and economic organization. Any threat to the companies that make up the Defense Industrial Base (BID) puts this balance at risk since BID comprises state-owned or private companies that constantly update technologies for the Navy, Air Force, and Army. These firms guarantee Brazil’s defense industry innovation and development. Being under national control, these human resources safeguard the autonomy of the Armed Forces and, therefore, of the Brazilian State.

Highly qualified engineers are co-opted.
The professionals co-opted by Boeing are mainly in aerospace. These highly qualified engineers are trained in public institutions (such as ITA, UFMG, and UFSCar) with over ten years of experience. These professionals participate in projects in the Defense and Security area or hold knowledge essential for national sovereignty. And, precisely because of this, they have access to information and classified data on the country’s strategic projects.

According to the lawsuit, all the most relevant Aerospace and Defense Brazilian companies recently lost engineers in this process. Among them, Embraer, Akaer, Avibras, AEL Sistemas, Safran, and Mac Jee.

When looking at Embraer, the situation is more critical. Boeing had access to proprietary information for over two years (2018 to 2020). Boeing and Embraer negotiated a partnership to create a joint venture during that period. Days before definitively closing the agreement, including a $ 4.2 billion payment to Embraer, Boeing unilaterally terminated it.

The AIAB advocates free competition and a free market. But such principles are not absolute. They must be subject to constitutional imperatives such as national sovereignty, as outlined in Article 170 of Brazil’s Constitution. What is at stake, therefore, is something much greater than any individual or collective interests“, said Julio Shidara, AIAB’s President. He also noted that the lawsuit intends to stop such systematic hiring, which leaves a trail of predatory actions in the country’s BID companies until alternatives have been discussed that guarantee Brazil’s national sovereignty’s preservation. “In decades, BID has never faced a situation like the one we are now experiencing. Our current capacity was not built overnight. It took decades of national collective effort and massive public and private investments. We cannot allow an accelerated degradation to occur, and it is happening as the facts have shown“, concludes Shidara.

What is the Defense Industrial Base (BID)
The BID encompasses the diverse ecosystem of private and state-owned companies developed to secure Brazil’s independence in the ??Defense area. It is made up of more than 1,000 companies. Including, for example, satellite and military use equipment manufacturers and systems developers. The aerospace segment stands out in the group, with Embraer as the industry’s largest aerospace company, with hundreds of domestic companies orbiting around as part of its supply chain.

These companies have a significant impact on the economy. According to the Ministry of Defense, Brazil’s domestic defense industry represents approximately 285,000 direct jobs and 850,000 indirect jobs and generates over R$ 200 billion in the domestic economy, accounting for around 4% of the National Gross Domestic Product. Weakening this sector negatively impacts Brazil’s national economy. The 3rd Federal Court of São José dos Campos is handling the public civil action proceedings.

author avatar
Addison Schonland
Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.

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