One has to wonder if the liberal reforms initiated by the Brazilian president Fernando Collor de Mello, elected in late 1989, liberal reforms which included the potential privatisation of government-run companies like Embraer, played a (minor?) role in the decision to drop the CBA-123. The economy of Brazil was indeed in dire straits at the time and the hyperinflation which hit in early 1990 dit not help.
Embraer itself was in deep financial trouble. As the government refused to allow that firm to raise money through debt for equity swaps, its president, an engineer, Ozilio Carlos da Silva, resigned, in December 1990. His successor, Joao Rodrigues da Cunha, an economist, resigned in July 1991, possibly because the government did not deliver on the expected date a promised and sizeable rescue package. By then, the government may well have decided that Embraer would have to be privatised.
In order to make the firm attractive, its core would have to be preserved, which meant that unpromising projects would face the ax.
In that regard, one has to wonder if the change in leadership personnel which took place in July 1991 also played a (minor?) role in the decision to drop the CBA-123. Incidentally, that change in leadership included
- the return at the helm of Ozires Silva, an engineer and the founder of Embraer, who had not been involved in the development of the CBA-123, and
- the arrival as commercial director of the Frenchman Michel Cury, who was seemingly the director general of the French subsidiary of Embraer, Embraer Aviation International, until July 1991.
Incidentally, Cury was the flight engineer present during the first flight, in October 1968, of the aircraft which would become known as the EMB-110 Bandeirante, an aircraft whose design team was headed by Silva.