Last Spring, the Brazilian government god rid of mining giant Vale's CEO Roger Agnelli. The government, keen on keeping employment high, disagreed with his attempts to cut costs, including through workforce reductions. Now, Vale used to be state-owned, but it was privatized in 1997, to the dismay of many Brazilian nationalists. As with many of the privatizations that took place during Brazil's liberal turn, however, things were not quite what they looked like: the government, directly through equity ownership, or indirectly through the pension funds it controls and through its national development bank (the BNDES), kept effective control of the company.
Since January, a similar clean-up has been under way in another of Brazil's half-privatized industrial jewels. No less than eighteen of Embraer's top executives have left the company over the last six months, including its President since 2007, Maurício Botelho, the man widely credited with turning the little loss-making local aircraft producer into the third largest aeronautic company in the world. Once again, disagreements with the government about company strategy appear to have been behind the changes. Apparently, as push came to shove, the government used its various channels of ownership to get the changes it wanted.
Photo Jonathan Blair
