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Embraer To Develop Military Cargo Planes

Brazilian plane maker Embraer will develop a new fleet of military cargo planes for the nation's air force, the defense minister said Tuesday.

RIO DE JANEIRO (AP) -- Brazilian plane maker Embraer will develop a new fleet of military cargo planes for the nation's air force, the defense minister said Tuesday.

Defense Minister Nelson Jobim confirmed the deal during a news conference at the opening of the Latin America Aerospace and Defense show.

The company will build a fleet of KC-390 military cargo planes that will have the capacity to carry up to 19 tons, said a representative of Empresa Brasileiras de Aeronautica SA who spoke on condition of anonymity because he was not authorized to discuss the deal.

Jobim did not offer any details, saying more information would be released at a formal deal-signing later in the day.

The formerly state-owned plane maker has long sought a deal with Brazil's air force to replace the military's aging fleet of Lockheed Martin-made C-130 Hercules planes.

Embraer officials hope the deal with Brazil's air force will pave the way for the company to ink similar contracts with other militaries around the world.

Last month, Brazilian President Luiz Inacio Lula da Silva said the government would take measures to help Embraer, the world's fourth-largest plane maker, boost sales.

In February, Embraer laid off 20 percent of its work force, or about 4,200 employees, after a 30 percent drop in sales, mostly of midsize and executive jets.

The company said last month that profits plunged 44 percent in the fourth quarter of 2008 after it lost $120.6 million on currency bets.

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