Accessibility links

Breaking News

Brazil Makes High Profile Investment in US


The Brazilian aircraft manufacturer, Embraer, is set to build a factory in the southern U.S. state of Florida to make executive jets. The move by the world's fourth-largest aircraft manufacturer comes as the U.S. economy is in a downturn and continues to lose manufacturing jobs. However, Embraer executives say they have confidence in the future of the US economy and its aviation industry. Steve Mort reports for VOA.

Workers at Embraer's main manufacturing plant - about two hours outside of the southern Brazilian city of Sao Paolo - build planes for airlines including US Airways, Northwest, and Jet Blue.

Embraer is the world leader in sales of small commercial jets of up to 120 seats.

At a gathering in Florida recently, Florida Governor Charlie Crist announced Embraer will now invest an estimated $50 million, building its first factory in the United States. "They've got courage. You know, in order to be a leader you've got to have courage," Crist said.

Courage may explain Embraer's decision to open a US plant at a moment when the American economy faces tough times with millions of manufacturing jobs lost since 2000 - 46,000 in April alone.

Embraer's President and CEO Frederico Curado says he views the investment as a bet on America's future, "We do not see the current crisis in the United States as a long term one," he said. "We do believe in the recovery of the US economy. I see many companies leaving the US. We just think the opposite - we think this is the right moment to invest in the US and be ready when the crisis is over."

Embraer, which will reportedly get millions of dollars in grants and tax breaks to move to Florida, will initially assemble executive jets at its new American plant.

The company says 60 percent of its private aircraft sales come from the United States, even as Americans tighten their belts amid rising fuel prices and the sluggish economy.

US aircraft makers report growing demand abroad -- in countries such as China and India. Overseas orders for General Dynamics' Gulfstream jets surpassed sales in North America for the first time last year.

But Curado anticipates continued strong demand for his company's jets within the US market. "We have our largest consumer market here and we also have our largest supplier base in the United States. So it's a natural step for us to come closer to our customers," he said.

The new 14,000 square-meter plant will employ workers in fields ranging from flight testing to aircraft-interior design.

But despite the fanfare, the boost to the US aerospace industry and manufacturing from Embraer's investment could be minimal.

The company is expected to create 200 jobs in Florida by 2011 -- a fraction of the thousands of aerospace jobs expected to be lost in the state when the US space agency, NASA, ends its space shuttle flights in 2010.

However, Embraer's CEO calls the new manufacturing facility a "positive development" for strengthening economic ties with the United States in which last year bilateral trade between the two nations totaled $50 billion.