Avibras Aeroespacial, considered the main manufacturer in Brazil of heavy defense systems, filed for judicial recovery last Friday (18) and also announced the dismissal of 420 employees, out of a total of 1,500.
The process was filed at the Jacareí forum, in Vale do Paraíba, where the company’s main facilities are located.
The total value of the reorganization is around R$570 million, and this is the third time that Avibras has had to go to court for cash problems: it filed for bankruptcy in 1990 and, in 2008, entered into judicial reorganization that lasted about two years.
According to the lawyer responsible for the recovery request, Nelson Marcondes, from the Marcondes Machado office, the financial crisis was caused by the drop in the number of contracts during the pandemic.
Founded in the 1960s by a group of engineers from ITA (Instituto Tecnológico de Aeronáutica), including João Verdi Leite, the company grew in the aerospace sector, participating in research programs and developing products for this segment.
Currently, the flagship is the Astros-2 rocket launch system and its latest version, Astros-2020. But it also sells other products, such as armored vehicles.
The company also has the Brazilian Army as a customer, but as its main business is the sale of products to other countries, Avibras was left without buyers during the health crisis.
“There was a mismatch between the company’s revenue and expenses. It expected to sign new contracts, but this was prevented by the pandemic. All countries changed their budgets, decreasing from the defense area to the health area”, says Marcondes.
In addition, international travel was suspended, which hindered the company both in carrying out product tests and in winning over new customers.
According to the documentation sent by the company in the recovery request, in the years 2020 and 2021, net revenues – which until then had been growing – fell significantly. “Revenues increased by more than 50% between 2018 and 2019, to, in the following two years, fall to practically a third of the level of 2018.”
“The high investments made in 2020 and 2021 generated high additional costs for the operation to be maintained on an ongoing basis”, says the petition.
In the document, the company, however, says it believes that the defense market is reacting and that its customers have increased their operations, “restarting projects that they had interrupted for the last two years, reverting to requests for new proposals and even signing of new contracts, even if at a speed still below expectations”.
The expectation is for a resumption of higher value contracts later this year and throughout 2023.
According to the Metalworkers Union of São José dos Campos e Região, the more than 400 employees were fired without prior negotiation with the entity. The company says the negotiations took place directly with the dismissed employees.
Union leaders filed an extrajudicial notification to the company, demanding a meeting with Avibras’ management and the immediate suspension of all layoffs.
According to the union, it is necessary to repudiate the company’s attitude, since there are mechanisms to avoid mass dismissals.
“One way out would be to adopt the lay-off, as has already occurred in other factories in the region, such as General Motors, Caoa Chery and TI Automotive, or to open a PDV (Voluntary Dismissal Plan).”
“Since the company says it is going into judicial recovery, our union will carry out a campaign for the nationalization of Avibras. We cannot see a company that manufactures war equipment, strategic for the country, saying that it is in this situation”, says the president. of the union, Weller Gonçalves.
The union will hold an assembly next Monday (21), at 7:30 am, and should schedule a mobilization for the next week, in an attempt to reverse the layoffs.
Avibras’ lawyer says that throughout the pandemic, even by determination of the controlling shareholder, the company tried to keep the employment of 1,500 employees, which drained cash resources. “When the recovery became inevitable, they had to fire them. It’s a shame, even because they are highly qualified employees.”
The Justice must analyze the request for judicial recovery in about ten days. After that, the company has up to 60 days to present its recovery plan.
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