Brazilian Court Allows Boeing to Continue Hiring Local Engineers

Boeing has won a legal battle in Brazil, which clears the way for its local subsidiary to continue hiring engineers. A federal court rejected a lawsuit from two aerospace industry associations that sought to impose limits on the US planemaker’s recruitment practices.

Industry groups allege Boeing has recruited hundreds of experienced engineers from Brazilian firms, including Embraer, even before opening its engineering and technology center in Sao Jose dos Campos in 2023. The hiring push followed the collapse of Boeing’s bid to acquire Embraer’s commercial aviation division.

Industry Groups Sought To Restrict Boeing’s Engineer Recruitment

The lawsuit was filed by the Brazilian Association of Defense and Security Material Industries (Abimde) and the Brazilian Aerospace Industries Association (AIAB), which argued that the US manufacturing giant’s hiring practices were draining the country’s limited pool of highly qualified aerospace professionals. They sought to restrict the company from employing more than 6% of engineers from any single Brazilian firm each year, and proposed a fine of roughly $1 million for every hire exceeding that threshold.

Judge Renato Barth Pires noted that Boeing had adopted what he described as “an aggressive hiring policy” and that the rapid loss of key personnel can disrupt development programs and create prolonged vacancies, as reported by the Air Data News. However, he determined that the recruitment did not violate Brazilian law and could not be restricted through judicial intervention. Piers said:

“The hiring of engineers by Boeing, including those who completed the professional master’s degree offered through the Embraer/ITA partnership, although certainly frustrating, is not unlawful, nor does it authorize judicial intervention to prevent or limit such hiring.”

Court Rules Boeing’s Recruitment Does Not Breach Brazilian Law

Industry groups claim Boeing recruited nearly 500 engineers from Brazilian companies even before opening its Sao Jose dos Campos engineering center in October 2023. Many of those hires reportedly came from Embraer, which has a long-standing partnership with the Aeronautics Institute of Technology (ITA) to train aerospace professionals.

The professionals in question are highly experienced and often educated at public institutions such as ITA, UFMG, and UFSCar. Many were involved in defense and security projects or held knowledge considered vital to national sovereignty, including access to classified information on strategic programs. As reported by Air Insight, virtually all of Brazil’s major aerospace and defense companies lost engineers to Boeing in this process, including Embraer, Akaer, Avibras, AEL Sistemas, Safran, and Mac Jee.

At the time, Roberto Gallo, President of Abimde, said, “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.” The associations also argued that the scale of these losses poses a national security concern by undermining the capacity of Brazil’s Defense Industrial Base.

However, in his ruling, Judge Pires said that he found no proven harm to national defense or security, and described the allegations as a “merely potential risk.” He also noted that Brazil’s free enterprise system allows professionals to seek roles offering better pay and opportunities, and that restrictions on such movement should be applied “with great caution.” Abimde and AIAB have said they are considering whether to appeal.

Boeing’s Hiring Drive Followed Collapse Of Embraer Acquisition Deal

The legal dispute traces back to Boeing’s earlier efforts to expand its presence in Brazil. In 2018, the US manufacturer announced plans to acquire Embraer’s commercial aviation division in a $4.2 billion deal that would have given it a strong foothold in the regional jet market while allowing Embraer to leverage Boeing’s global reach.

However, in April 2020, the deal collapsed. At the time, Boeing was grappling with the financial and operational fallout from the global grounding of the 737 MAX, which had already strained the company’s balance sheet and disrupted production. The manufacturer decided not to proceed with the acquisition, citing these pressures alongside a deteriorating market outlook during the early months of the COVID-19 pandemic.

Stock Code

BA

Business Type

Planemaker

Date Founded

July 15, 1916

CEO

Kelly Ortberg

Months later, it established a Brazilian subsidiary and, in 2023, opened its engineering and technology center in São José dos Campos. Soon after, the manufacturer ramped up recruitment across Brazil’s aerospace sector and brought in engineers from multiple firms.