In October 2008, it was reported the Super Hornet was selected as one of three finalists in Brazil's fighter competition. Brazil has put forward an initial requirement for 36 planes, with a potential total purchase of 120.
The planemaker wants to manufacture the first 12 planes in the U.S. and transfer equipment and tools to assembly lines to Brazil so Sao Jose dos Campos-based Empresa Brasileira Aeronautica SA could assemble the remainder, said Mike Coggins, who is overseeing the sale for Boeing.
“If Brazil chooses to exercise this option, we’re on board, and the U.S. government has been on board since February, when they granted us full authority and approval,” Coggins said in a phone interview from Brasilia. “We do recognize it is important to Brazil that these jets are final-assembled here.”
Boeing wants to prevent France’s Dassault from winning work that analysts estimate could be valued at as much as 5 billion euros ($7.29 billion). The Chicago-based company made its offer last week, before French President Nicolas Sarkozy traveled to Brazil, pitching Dassault’s Rafale jet with a promise to build some locally as well as buy 10 Embraer military transport aircraft.
Boeing, Dassault and a third finalist, Sweden’s Saab AB, are being allowed to amend their bids delivered in June, Coggins said. Brazil’s air force will make its recommendation this month, Coggins said.
‘Heating Up’
Defense Minister Nelson Jobim told reporters today that the competition was “heating up” and that it was up to Dassault to present an acceptable final offer so President Luiz Inacio Lula da Silva’s “political decision” to strengthen ties with France could be fulfilled.
Lula, after being asked yesterday by reporters about a U.S. government statement that the transfer of “all necessary technology” to Brazil had been approved, joked that “pretty soon I’ll get these fighter jets for free.”
During Sarkozy’s visit, France promised to grant Brazil exclusive rights to sell the Rafale in Latin America. Coggins called the offer a “marketing ploy” since few other regional buyers can afford the plane or have committed to other suppliers.
“We feel that Brazil’s goals of national autonomy and industrial development are best served by a 30-year partnership with the largest aerospace company in world,” he said, adding that no competitor could match its track record for on-time and on-budget delivery.
Order Expansion
Under Boeing’s offer, Embraer would perform both the final assembly on the remaining 24 jets and “do the same work should the number of jets grow,” Coggins said. Brazil has said it may expand the order to 120 warplanes to replace its aging fleet, which is primarily supplied by the French.
Michel Merluzeau, an aviation analyst at Seattle-based market research firm G2 Solutions, said the sale was Dassault’s to lose. If successful, it would be Dassault’s first international sale after failed bids in Morocco, South Korea and Singapore. The competition in Brazil is being closely watched by India, where both Boeing and Dassault are competing to win an order for 126 warplanes.
“Boeing’s offer is interesting, but it falls short of Brazil’s requirement for a more competitive package that goes beyond just the aircraft,” Merluzeau said.
To contact the reporter on this story: Joshua Goodman in Rio de Janeiro jgoodman19@bloomberg.net
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