Illustrator Dennis Balogh

Frederico Fleury Curado

What are the most pressing business 
challenges — and opportunities — for 2011 and beyond?

It’s the global economy,” says Frederico Fleury Curado, president and CEO of Embraer - Empresa Brasileira de Aeronautica SA (ERJ), the world’s third largest airframe maker by revenues. “I see the financial markets, international trade and employment still years from complete restoration.”

Curado, 48, says Embraer is positioning itself to meet the challenges and seize opportunities in a weak economy by emphasizing business fundamentals: “We’re investing in technology and new products; investing in, motivating and partnering with our people; seeking productivity and excellence in every single process of our operation; genuinely focusing on customer needs; generating returns to shareholders; and effectively being a good corporate 
citizen,” he says.

Part of being a good corporate citizen involves protecting the environment, a task that Curado says can no longer be pushed to the distant future. “It will require massive investments and changes in behavior, which will not be easy to achieve,” he says. “But 
with radical changes come opportunities for innovative, proactive ideas and solutions.”

To stimulate innovation, the company determinedly held on to its $350 million R&D budget during the recession, even though its customers in the global aviation field were hit particularly hard. The payoff, explains Curado, has been the introduction of seven new airplane models during the past six years. “During the recent crisis, we did not postpone a single program,” says the CEO. “Our business is long term.”

“During the recent 
crisis, we did not postpone 
a single program. Our 
business is long term.”

Curado worries about when and how government will withdraw its support around the globe and what the collateral effects will be: “Inflation, large deficits and the danger of continued recession, to mention a few.” He raises concern over the failure of the Doha Development Round of world trade talks and fears that the dire situation that many economies are still facing could spark undesirable waves of protectionism.

Still, he disagrees with those who claim that the recent global crisis proved the fundamentals of capitalism wrong. Taking a historical perspective, he points to “how undeniably the human condition has improved over the 250 years since the Industrial Revolution.” Running a prosperous and responsible business, he says, “is part of the solution, not the problem.”

In fact, he says, emerging markets will play a big role in the recovery. He adds that the years ahead will see an increase of “emerging multinationals,” world-class companies 
such as Embraer that leverage their positions as home-market stars into global leadership. Indeed, the company has come a long way since it was founded as a government entity in 1969 and privatized in 1994. In 2009, says Curado, 82 percent of Embraer’s $5.4 billion in revenues came from outside Latin America.

“Brazil,” says Curado, “will be at the leading edge of this trend” toward multinational corporate leadership. He doesn’t whitewash the issues that foreign companies have to deal with when doing business in South America’s largest economy. “Creativity, flexibility and openness are just some of the characteristics of our strong culture,” says Curado. “Pride and stubbornness as well, 
I am afraid.”

Foreign investors who adapt to Brazil’s culture “will enjoy nice tailwinds,” insists Embraer’s CEO, noting that the country’s Banco Central do Brasil projects a healthy 5.8 percent growth rate for 2010. “Brazil’s domestic market is indeed strong, as tens of millions of people leave the lower income levels of our society and enter the middle class, generating a material demand for just about everything, from food, textiles and shoes to houses, manufactured goods and services. It is one of the most promising markets in the next decade.” — Sharon Kahn