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First, on December 22, we here Brazil’s President will not consider “transfer ownership”.  The next day, Brazil’s Workers Party called any deal between Embraer and Boeing “an aggression against national sovereignty.”

But despite the nationalistic knee-jerk reaction, the reality is dawning in Brazil.  Absent a deal with Boeing, Embraer will not compete as well against the combination of Airbus and Bombardier.  Boeing knows this, which is why it started the conversation.  One can imagine the scenario Boeing is painting in Brasilia.  They do not need to be as effusive in San Jose dos Campos because the management at Embraer can see right away how the market will shift.

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