Defense chief at Brazil's Embraer to step down next year

Reuters

By Brad Haynes

SAO PAULO, Dec 5 (Reuters) - The head of defense forBrazilian planemaker Embraer SA will leave thecompany at the beginning of next year, the company said onThursday, after restructuring the division and raisingcompliance standards amid a bribery investigation.

Luiz Carlos Aguiar will step down after 10 years at Embraer,passing the reins at the defense division to Jackson Schneider,currently the head of human resources and institutionalrelations at Embraer, the company said. Reuters reportedAguiar's departure plans earlier in the day, citing a sourcewith direct knowledge of the matter.

Aguiar took over Embraer's defense unit at the beginning of2011, more than a year after a $92 million deal with the armedforces of the Dominican Republic that triggered a corruptioninvestigation by U.S. and Brazilian authorities.

The investigation, which the U.S. Department of Justice andthe U.S. Securities and Exchange Commission launched under theForeign Corrupt Practices Act in 2010, has expanded to involveother countries and prompted internal scrutiny of Embraer'ssales practices.

Brazilian prosecutors have also begun a criminal probe ofthe executives involved. Aguiar has not been questioned in theinvestigation, said the source, who declined to be named giventhe sensitivity of the matter.

In a statement, Embraer said Aguiar's departure will beeffective Feb. 28, 2014. Between Jan. 1 and that day, theexecutive will work with Schneider on a transition, thestatement added.

Schneider joined Embraer from Mercedes Benz in 2011 after acareer that started in public service. He has been president ofnational automakers' association Anfavea and a member of thefinance ministry's taxpayer council.

He will take over the defense unit, Embraer'sfastest-growing division, as the government is set to become aneven bigger client for the world's No.3 commercial plane maker.

Next year, Brazil's Air Force is expected to sign a firmorder for the first of Embraer's KC-390 military cargo jetsafter investing $2 billion on development of a transport planeto take on Lockheed Martin's Hercules airlifter.

In a separate move also announced in the statement, ErnestJoseph Edwards, senior vice president in charge of Embraer'sexecutive aviation, will leave his position on Dec. 31. Thecompany named Marco Tulio Pellegrini to replace Edwards, thestatement added.

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