Page "Brazilian Armed Forces" Paragraph 98

Brazil's arms industry nearly collapsed after 1988, as a result of the termination of the Iran-Iraq War ( 1980 – 88 ), a reduction in world demand for armaments, and the decline in state support for the industry.

In early 1990, the two major manufacturers, Engesa and Avibrás, filed for bankruptcy.

By late 1994, it appeared that Brazil's arms industry would not disappear completely.

It was unlikely, however, that it would return to the robust form of the mid-1980s.

Avibrás had paid off a substantial portion of its debt and was seeking ways to convert much of its production to civilian products.

Engesa had been dismembered ; some of its companies were sold to private interests, and its ordnance-related companies were taken over by the state and integrated with Imbel.

Embraer was privatized in December 1994, and despite significant financial difficulties, it rolled out the new jet commuter plane prototype EMB-145 in 1995.