DTN News: Brazil To Choose France's Rafale Jet According To Government Source

DTN News: Brazil To Choose France's Rafale Jet According To Government Source * Lula to choose French Rafale jets for Brazil fleet * Brazil still seeking lower price for Rafale order * Air force prefers Swedish plane *Source: DTN News / Reuters By Natuza Nery (NSI News Source Info) BRASILIA, Brazil - January 12, 2010: President Luiz Inacio Lula da Silva will choose the French-made Rafale jet as Brazil's next-generation fighter plane but wants to negotiate a lower price, a cabinet member told Reuters on Monday. Lula will opt to buy 36 Rafale multi-role aircraft made by France's Dassault Aviation (AVMD.PA) despite the Brazilian Air Force's preference for the Gripen NG made by Sweden's Saab (SAABb.ST), said the minister, speaking on condition of anonymity. "The government doesn't decide under pressure from anybody, not even the Air Force. The ball is in the court of the French," said the minister, "If they reduce the price, we'll close the deal soon." The Rafale is reported to have the highest price of the three finalists in the bidding process, which includes the Boeing Co (BA.N) F-18. Last week local media reported the Air Force preferred the Gripen NG because it had a lower purchase and maintenance cost and would allow for more technology to be transferred to Brazil. Lula's government said in September it was entering final negotiations with France to acquire the Rafale. Brazil has a strategic defense agreement with France worth billions of dollars, including the local assembly of helicopters and submarines. Unlike the Rafale, which is a finished product, the Gripen NG would be developed with Brazilian participation, according to an Air Force report cited by local newspapers. The deal, which could initially be worth more than $4 billion, has sparked fierce competition among aircraft manufacturers. Latin America's largest country is seeking a generous technology transfer offer and local assembly. The deal could eventually rise to more than 100 aircraft. Lula said last year that his final decision on which planes Brazil buys would be political rather than technical. (Writing by Raymond Colitt; editing by John Wallace)

DTN News: Sweden Sweetens Offer In Bid To Win Brazil Fighter Jet Deal

DTN News: Sweden Sweetens Offer In Bid To Win Brazil Fighter Jet Deal *Source: DTN News / Int'l Media

(NSI News Source Info) BRASÍLIA, Brazil - September 19, 2009: Sweden has sweetened its bid for a lucrative contract to sell 36 fighter jets to Brazil, promising that 40 percent of the supersonic Gripen aircraft would be built in Brazil, officials said Thursday. Saab 39 Gripen Features ~ In designing the aircraft, several layouts were studied. Saab ultimately selected an unstable canard design. The canard configuration gives a high onset of pitch rate and low drag, enabling the aircraft to be faster, have longer range and carry a larger payload.The combination of delta wing and canards gives the Gripen significantly better takeoff and landing performance and flying characteristics. The totally integrated avionics make it a "programmable" aircraft. It also has a built-in electronic warfare unit, making it possible to load more ordnance onto the aircraft without losing self defence capabilities.The Gripen affords more flexibility than earlier generations of combat aircraft used by Sweden, and its operating costs are about two thirds of those for JA 37 Viggen.In the Swedish Air Force's list of requirements was the ability to operate from 800 m runways. Early on in the programme, all flights from Saab's facility in Linkeping were flown from within a 9 m x 800 m outline painted on the runway. Stopping distance was reduced by extending the relatively large air brakes; using the control surfaces to push the aircraft down, enabling the wheel brakes to apply more force and tilting the canards forwards, making them into large air brakes and further pushing the aircraft down.The Gripen uses the modern PS-05/A pulse-doppler X-band radar, developed by Ericsson and GEC-Marconi, and based on the latter's advanced Blue Vixen radar for the Sea Harrier (which inspired the Eurofighter's CAPTOR radar as well).* The offer came on top of a promise that Brazil would have full access to the technology used in the state-of-the-art military aircraft. A similar offer helped give France front-runner status in high-stakes bidding for the coveted fighter jet contract, valued at four to seven billion dollars. "The Swedish government and the SAAB motor company are 100 percent committed to making the technology transfer," Swedish State Secretary for Defense Hakan Jevrell said at a press conference, accompanied by a Saab representative. "There will be no restriction in the transfer of technology." Jevrell said that in addition to the technology, Sweden would offer Brazil "a very competitive price" for the fighter jets. The sweetener offered by Stockholm is the latest from one of three major aerospace powers -- France, Sweden and the United States -- jostling to win the coveted fighter jet contract, as Brazil seeks to modernize its air force in a bid to become Latin America's preeminent military power. French manufacturer Dassault appears to have a lock on the contract: Brazilian President Luiz Inacio Lula da Silva and French President Nicolas Sarkozy last week issued a joint statement opening Brazil's official negotiations to buy 36 of Dassault's Rafale jets without, however, ending the tender process. The Swedish offer is in line with requirements laid out by President Lula, who said he wants to secure technology transfers and build the planes in Brazil. Dassault, fielding its high-tech Rafale fighter, had been seen as the leading contender because of its guarantee to share all technology with Brazil. "The air force has the technological know-how to make the evaluation, and it will do so," he added. "But the decision is political and strategic, and it's up to the president of the republic and no one else," Lula said recently. Brazil has set a September 21 deadline for the contenders to finalize their bids.

DTN News: Brazil Sets Deadline For New Bids In Fighter Competition

DTN News: Brazil Sets Deadline For New Bids In Fighter Competition

*Source: DTN News / Int'l Media (NSI News Source Info) BRASÍLIA, Brazil - September 15, 2009: The French company Dassault has until September 21 to formalize to the Brazilian Air Force a new business proposal for the Rafale fighter that is compatible with the parameters specified by French President Nicolas Sarkozy. (Image: Rafale fighter jet)

This deadline also applies to the other two competitors, Boeing (F-18) and Saab (Gripen NG), who may wish to match the French proposals.

It is the expectation of the Brazilian air force to complete the technical review process by the end of October, so that the information can be delivered to the Minister of Defense who will then pass it on to the President, who will carry out policy and strategic analysis, and take the final decision.

"Now we have to evaluate the proposals. The commitments that President Sarkozy made will have to be confirmed by Dassault's own offer," Defense Minister Nelson Jobim said last Thursday [Sept. 10—Ed.]. "The important thing is that there has been a political decision of the President to expand the strategic alliance with France. ... for this policy decision to come into effect, it depends on Dassault and also the other [bidders], because there needs to be a comparative evaluation," the minister said.

Jobim said that the evaluation process is following its normal course, and rejected criticism of those who claim that the government rushed to announce a preference for the Rafale, with conditions discussed with the French government. "The ones who rushed were the ones who jumped to a conclusion that was never stated [by the government], and that is why the President had to confirm that ‘we are going back’ to negotiations.”

During the news conference by Presidents Lula and Sarkozy, on September 7, on the insistence of journalists who wanted to know whether the negotiations with Dassault’s would be cancelled, the President said, "Our colleagues worked until almost two in the morning. I even had time for a meeting with the Defense Minister to discuss in depth the discussions they had. Clearly, this means nothing more and nothing less than was stated in the [joint] communiqué, i.e. that we decided to start negotiations for the purchase of the Rafale.”

DTN News: Brazil President Has Last Word On Fighter Says Foreign Minister Celso Amorim

DTN News: Brazil President Has Last Word On Fighter Says Foreign Minister Celso Amorim *Source: DTN News / Int'l Media (NSI News Source Info) RIO DE JANEIRO, Brazil - September 13, 2009: President Luiz Inacio Lula da Silva will have the final say on who will sell billions of dollars in fighter jets to Brazil to modernize its air force, Foreign Minister Celso Amorim said September 11. Saab, in its own statement on September 10, underlined that it, too, would give "key technology" if Brazil chose its Gripen NG fighter. "President Lula has the last word; of course, he will take into account the position of the National Defense Committee," Amorim told international journalists in Rio. "Let me reiterate: there was an evaluation of various proposals, and Brazil made the decision to start negotiations with France. Its proposal was the most favorable," he added. Rival bidders trying to sell fighter jets to Brazil have made a final push for the multi-billion-dollar contract, which had looked all but sewn up by France's Dassault. Sweden's Saab and the United States, backing defense contractor Boeing in the race, both emphasized they would transfer important technology to meet Brazil's requirement that it not only acquire new jets but also the knowhow to build them. But a Brazilian official speaking to AFP on condition of anonymity said French President Nicolas Sarkozy wrote to Lula promising "unrestricted access to technology" in the Dassault offer and a competitive price. That letter was "instrumental" in Lula's announcement on Monday that he was opening negotiations to buy 36 Rafale fighter jets from Dassault, the official said. A French official said the deal was worth up to seven billion dollars. Lula's announcement prompted the U.S. government, through a statement on its embassy Web site in Brazil, to say it had approved the transfer to Brazil of "all necessary technology" related to its F/A-18 Super Hornet aircraft. Saab, in its own statement on September 10, underlined that it, too, would give "key technology" if Brazil chose its Gripen NG fighter. But the Brazilian official said those offers were "unlikely to change the situation because it's not clear what is 'necessary technology' when another competitor guarantees 'unrestricted technology.'"

DTN News: Boeing Sweetens Bid To Brazil To Win Jet Fighter Race

DTN News: Boeing Sweetens Bid To Brazil To Win Jet Fighter Race *Source: DTN News / Bloomberg By Joshua Goodman (NSI News Source Info) SEATTLE, USA - September 13, 2009: Boeing Co., sweetening its bid to beat Dassault Aviation SA and win an order for 36 jet fighters from Brazil’s air force, offered to assemble most of the proposed contract’s F/A-18 Super Hornets in the country. 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

DTN News: France Says Brazil Jet Deal Worth 4.5 to 5.0 Billion Euros

DTN News: France Says Brazil Jet Deal Worth 4.5 to 5.0 Billion Euros *Brazil to assemble French fighters, could sell to Latin America ~ Foreign Minister Celso Amorim *Source: DTN News / Reuters (NSI News Source Info) BRASILIA, Brazil - September 8, 2009: The Rafale contract between France and Brazil would be worth 4.5 to 5.0 billion euros (3.9 to 4.4 billion pounds) and delivery would begin in 2013, a source in French President Nicolas Sarkozy's office said on Monday. The building of the French planes would gradually be transferred to Brazil, the source said. (Image: Dassault Rafale is a French twin-engined delta-wing highly agile multi-role 4.5th-generation jet fighter aircraft) In exchange, France has agreed to buy around a dozen KC-390 military cargo planes, made by Brazil's Embraer . That contract is worth around 500 million euros, the source said. Brazil would assemble Rafale fighter jets under an imminent deal with France, and could sell them to other Latin American nations, Foreign Minister Celso Amorim said Monday. His comments came after Brazilian President Luiz Inacio Lula da Silva and visiting French President Nicolas Sarkozy announced that Brazil had started talks to acquire 36 Rafale combat planes in a deal worth billions of dollars.

DTN News: Brazil, France Making Progress In Rafale Fighter Jet Talks Says Brazilian President Luiz Inacio Lula da Silva

DTN News: Brazil, France Making Progress In Rafale Fighter Jet Talks Says Brazilian President Luiz Inacio Lula da Silva

*Source: DTN News / Int'l Media (NSI News Source Info) PARIS, France - September 7, 2009: Brazil is making progress in talks with France on the possible purchase of Rafale fighter jets, Brazilian President Luiz Inacio Lula da Silva said on Sunday, hours ahead of a visit by French President Nicolas Sarkozy. (Image: Dassault Rafale is a French twin-engined delta-wing highly agile multi-role 4.5th-generation jet fighter aircraft) Lula said discussions were very advanced, but he stopped short of saying that a decision would be announced during Sarkozy's visit. "Discussions with President Sarkozy are progressing rapidly. We are on the right path and we have a relationship of trust," Lula said in an interview with three French media, TV5 Monde, RFI radio and Le Monde newspaper. Brazil plans to buy 36 fighter jets to partially renew its air force. The contract is worth somewhere in the region of 4 billion euros ($5.7 billion), French sources have said. The providers being considered are the French Rafale, which is made by Dassault Aviation, the American F18 made by Boeing and the Gripen, built by Sweden's Saab. The stakes are high for France, which has been trying to export the Rafale for years without success. "Everyone knows that one of Brazil's requirements is technology transfer. We cannot buy a fighter jet if we don't have the technology," Lula said during his interview with the French media. He previously had said that in terms of technology transfer, the French were well placed. However, Lula would not be drawn into saying whether Sarkozy could expect to clinch a deal during his time in Brazil. "I don't know. It's a very sensitive subject. An agreement on such a scale involves lots of money, technology transfer, other competitors. All I can say is that we are at a crucial moment in the conversation with France," he said. The Rafale, a project initiated in 1988, has been operational in the French air force since 2006. However, it has yet to find any foreign buyers, much to Sarkozy's frustration. The French leader is in talks with the United Arab Emirates over the possible sale of 60 of the planes. During a visit to Brazil in December last year, Sarkozy signed defence contracts with Lula worth billions of euros. These included the sale of four conventional submarines and 50 military transport helicopters.

DTN News: Brazil Slams U.S. Bases In Colombia

DTN News: Brazil Slams U.S. Bases In Colombia *Source: DTN News / Int'l Media (NSI News Source Info) BRASILIA, Brazil - September 1, 2009: The imminent use of seven bases in Colombia by the U.S. military is "a serious problem" that has to be discussed further by South America's leaders, Brazilian President Luiz Inacio Lula da Silva said Aug 31. The President of Colombia Alvaro Uribe (L) listens to his Brazilian counterpart Luiz Ignacio Lula Da Silva during the family picture of the Union of South American Nations (UNASUR) presidential summit in San Carlos de Bariloche, Rio Negro, Argentina on August 28, 2009. South American presidents attacked Friday plans for US bases in Colombia at a summit in Argentina, voicing their fears of renewed interference by Washington in their region.'It's about mobility to make war,' said Venezuelan President Hugo Chavez, the fiercest opponent of the plan, as he brandished a document he said was a US air force strategy document setting out that aim. "The treaty between Colombia and the United States needs to have a legal guarantee allowing any other country that feels threatened to go before international forums," Lula said in his weekly radio broadcast. The controversial bases deal, details of which first came to light in Colombia's press mid-July, was the subject of a stormy summit between South American presidents on Aug. 28. That meeting heard fears by Venezuela and other countries that the expanded U.S. military presence in Colombia - ostensibly to fight drug traffickers - could be used against neighboring nations, several of which have leftist anti-U.S. governments. It issued a statement warning "foreign military forces" against threatening the national sovereignty of other countries, without mentioning the U.S. or Venezuela by name. It also agreed South America would examine the issue further in future meetings. Lula said he wanted the region's fledgling defense council to study the "real border situation of all the countries" and another council on fighting drug trafficking to examine ways the region can tackle the issue itself with U.S. involvement. "We need to take on the responsibility of looking after our noses, looking after our territory, looking after our borders," he said.

DTN News: Colombia TODAY August 17, 2009 ~ Colombia-US Base Accord Reached

DTN News: Colombia TODAY August 17, 2009 ~ Colombia-US Base Accord Reached *Source: DTN News / Int'l Media (NSI News Source Info) BOGOTA, Colombia - August 17, 2009: Colombia says it has completed talks with Washington on allowing US troops to use seven of its military bases. Under the deal, the US military will be able to operate on Colombian soil to tackle drug-trafficking and terrorism. The United States maintains a complex web of military facilities and functions in Latin America and the Caribbean, what the U.S. Southern Command (known as SouthCom) calls its "theater architecture." U.S. military facilities represent tangible commitments to an ineffective supply-side drug war and to underlying policy priorities, including ensuring access to strategic resources, especially oil. Much of this web is being woven through Plan Colombia, a massive, primarily military program to eradicate coca plants and to combat armed groups (mostly leftist guerrillas of the Revolutionary Armed Forces of Colombia). In the last five years, new U.S. bases and military access agreements have proliferated in Latin America, constituting a decentralization of the U.S. military presence in the region. This decentralization is Washington's way of maintaining a broad military foothold while accommodating regional leaders' reluctance to host large U.S. military bases or complexes. A number of South American countries have condemned the plan and Argentina has said the bases are "not helpful". Venezuelan President Hugo Chavez has expressed fears the move would amount to preparation for an invasion of his country by US forces. Colombia's foreign ministry said that Bogota had agreed the text of the deal with the US. "This agreement reaffirms the commitment of both parties in the fight against drug-trafficking and terrorism," the ministry said in a statement. The deal will now be reviewed in both countries before being signed. 'Climate of unease' Last week, Colombian President Alvaro Uribe visited several of his South American neighbours to try to calm fears over the proposed deal with Washington. On Monday, South American leaders at a regional summit had reiterated concerns over the deal. Mr Chavez warned that "the winds of war were beginning to blow" across the region. The Brazilian president, Luiz Inacio Lula da Silva, called for a meeting between US President Barack Obama and the region's leaders, saying the "climate of unease disturbs me". Washington wants to use Colombia as a regional hub for operations to counter drug-trafficking and terrorism. The US has been forced to look for a new base for such operations after Ecuador refused to renew the lease on its Manta base, which the US military was using.

DTN News: Brazil, Chile, Spain Question US Bases In Colombia

DTN News: Brazil, Chile, Spain Question US Bases In Colombia

*Analysis: The most ironic is the US anti-Venezuela (or Chavez) bias. They recently went as far as criticizing Venezuela for not doing enough to intercept Colombian-produced cocaine. But Colombia, which produces nearly 100% of the the drug, is not criticized one bit.

www.washingtonpost.com/wp-dyn/content/article/2009/07/18/AR2009071801785.html

Chavez, claims rightfully that the US is the biggest importer of cocaine, and that the main anti-drug war should be within the US borders. But the US cannot use its armed forces inside the US for what is essentially a criminal activity, so prefers to take the fight overseas.These US bases, if opened, will create conflict with countries such as Venezuela and Bolivia....By A Taxpayer

*Source: DTN News / Int'l Media (NSI News Source Info) SAO PAULO, Brazil - August 2, 2009: Brazil, Chile and Spain on Thursday challenged the United States' decision to use and expand military bases in Colombia, saying they feared the move could heighten simmering tensions in Latin America.

Presidents Luiz Inacio Lula da Silva of Brazil and Michelle Bachelet of Chile said in Sao Paulo they would put the issue before an August 10 meeting of a nascent South American Defense Council in Ecuador.Spain's foreign minister, Miguel Angel Moratinos, and his Brazilian counterpart, Celso Amorim, simultaneously told reporters in Brasilia that they would demand explanations from Washington over the bases.

The Colombian government's announcement July 15 that three of its military air bases were to be used by the United States as part of joint anti-drug operations has ignited concerns and anger among Colombia's neighbors.

Venezuela and its ally Ecuador have warned the move could aggravate already deep tensions with Colombia.

The two almost went to war last year against Colombia over a raid its army made into Ecuador to destroy a Revolutionary Armed Forces of Colombia (FARC) rebel camp.

Venezuelan's fiercely anti-US president, Hugo Chavez, said he viewed the bases as a sign a "Yankee military force" was preparing to invade his country from Colombia.

Chavez this week signed deals with Russia reinforcing military ties that have already seen him acquire new tanks, combat helicopters and fighter jets.

He also on Tuesday froze diplomatic links to Colombia over allegations from Bogota that weapons Venezuela bought from Sweden in the 1980s ended up in the hands of the FARC.

Ecuador has cut off links to Colombia since its March 2008 cross-border raid.

In Brasilia, Moratinos said: "We are going to be in contact with Colombia and the United States so they can explain, tell us the reasons for this opening of the bases."

He said that while the use of the bases was a bilateral issue between the United States and Colombia, he hoped the deal "will not create more tensions and, above all, avoid a militarization of Latin America."

Brazil's Lula told a media conference in Sao Paulo that "I'm not happy with the idea of another US base in Colombia," he said, but added that he was not going to criticize Colombian President Alvaro Uribe over the matter.

He said the South American Defense Council could be asked to look at the broader issue of border sovereignty in light of the US base announcement.

Bachelet said she, too, respected Colombia's sovereign decisions but noted that "there are countries that are unsettled by this situation."

A broader Union of South American nations gathering in Ecuador which is to include the defense council meeting "will be an opportune time to see... how to come up with a solution permitting all countries to calmly accept this type of decision," she said.

DTN News: Saab May Make Gripen Jet fighter In Brazil To Help Win Order

DTN News: Saab May Make Gripen Jet fighter In Brazil To Help Win Order *Source: DTN News / Bloomberg (NSI News Source Info) STOCKHOLM, Sweden - July 8, 2009: Saab AB, the Swedish maker of the Gripen jet fighter, is ready to make Brazil the manufacturing center for the aircraft to increase its chances of winning a $1.8 billion order and safeguard the model’s future. On the 11 June the first single-seat Gripen C destined for the South African Air Force flew for the first time. Flown by Saab test pilot Richard Ljungberg the aircraft took off from Saab's facility at Linköping in Sweden at 13.00 and touched down safely back at Linköping at 14.03 in the afternoon. The Swedish Chief Prosecutor Christer van der Kwast decided on 16 June to close the preliminary investigation into Saab concerning alleged illegal methods in connection with the sale of Gripen. Gripen participated in a multinational exercise conducted over northern Sweden between the 8th and 16th June. Air Forces from ten nations participated in the NATO-led operation Loyal Arrow to train methods for quick reaction and the ability to participate in international efforts. The Annual Report on offset performance for 2008 has been approved by the Czech Ministry of Defence. The report concluded that the Gripen industrial co-operation programme in the Czech Republic generated CZK 4.94 billion in export value for the country. On 2 June, Saab attended a conference on Swedish- Brazilian Industrial co-operation being held in São Paulo, together with the Brazilian Industry association, FIESP, and the Swedish Trade Council. Saab is prepared to shift as much as 50 percent of future Gripen production to the South American country, where the main competition to provide 36 warplanes is from Boeing Co.’s F/A-18, Bob Kemp, marketing chief for the $50 million plane, said in an interview. Final assembly work has already been offered to Empresa Brasileira de Aeronautica SA, or Embraer, he said. Saab is betting on the Brazilian order to rescue the flagship Gripen as the production backlog shrinks. Winning the contract, which may be awarded as early as next month, is crucial to establishing the model as the warplane of choice in markets not already dominated by Boeing and Lockheed Martin Corp., which is grabbing market share with its F-35. “Maybe in the future Brazil will become the leading exporter of the next-generation Gripen,” Kemp said yesterday by telephone from Linkoeping, Sweden, where Saab is based. “This fits perfectly with their strategic ambitions. We are looking at six or seven major defense companies that have the potential of offering equipment for our aircraft.” Saab fell 0.9 percent to 57.25 kronor in Stockholm trading. The stock has declined 20 percent this year, giving the company a market value of 6.42 billion kronor ($812 million). Recommendation Brazil’s defense ministry said that final bids for the contract were submitted last month from Boeing, Saab and France’s Dassault Aviation SA, which is pitching the Rafale. The air force will make a recommendation to Defense Minister Nelson Jobim in early August, with the final decision in the hands of President Luiz Inacio Lula da Silva. Saab may be able to fend off Boeing because it can transfer more technology to Brazil than the Chicago-based company, Kemp said, adding that the Gripen costs about 20 percent less than the more-sophisticated F/A-18 and is better matched to Brazil’s need for a low-maintenance fighter able to operate in small numbers from widely dispersed airfields. Spare parts and maintenance may also cost one-third less, he said. While Brazil’s initial requirement is to replace a batch of aging Mirage jets made by Paris-based Dassault, the country may need as many as 120 planes, Kemp said, each with a life of as many as 40 years. ‘Weak at Home’ “In terms of value for money the Gripen is a superb aircraft, but Saab is at a terrible disadvantage in not having a strong home market,” said Richard Aboulafia, vice president at Teal Group, a Fairfax, Virginia-based consultancy. While the model has so far won 250 orders, 204 of them are from Sweden, where some planes have been leased out as the government reins in defense spending. The future of the 1,320 mile-per-hour plane will be determined by purchases in Brazil, India and Switzerland within the next 18 months, Aboulafia said. Saab may need to provide more inducements because it can’t match the offset work that Boeing can offer in fields such as civil aerospace, he said. Brazil would be granted a full 50-50 partnership on development, production and marketing of the Gripen for export, the executive said, including the manufacture of high-value communications, display and avionics systems. Saab has so far won only two export contracts for the Gripen, with South Africa buying 26 planes and Thailand taking six. Deliveries will run out in 2012 and output is down to 10 to 12 aircraft a year from about 15 previously, with suppliers including Volvo Aero, maker of the Gripen’s RM12 engine, already winding down production. Broad Collaboration Saab’s plan to develop an enhanced “next generation” Gripen means it can offer Brazil collaboration from the design stage on, unlike Boeing and Dassault, Kemp said. The size and status of the Brazilian aerospace industry makes a partnership feasible, he added. Embraer is the world’s fourth-biggest planemaker after Boeing, Airbus SAS and Bombardier Inc. “I think there’s no question in the minds of Brazilians that Boeing’s product is the best and competitively priced,” Mike Coggins, senior manager for business development at Boeing’s defense unit, said by telephone from St. Louis. It makes no financial sense to co-produce locally the 36 planes Brazil is seeking, although a larger order in the future may provide the necessary scale, he said. As part of its offsetting technology transfer package, Boeing will allow Brazilian companies to help develop future upgrades, he added. Export Candidates Argentina, Ecuador and Mexico represent possible export opportunities within Brazil’s immediate sphere of influence, Saab’s Kemp said, with aircraft replacement orders anticipated within the next five years. The Gripen upgrade plan may work against Saab because Sweden hasn’t ordered the plane and that will make the model “tough to sell,” according to Teal’s Aboulafia. Saab’s pitch to Brazil comes as the company focuses its marketing on nonaligned countries that aren’t already major customers for U.S. warplanes as the company seeks to sell at least 200 more Gripens abroad, Kemp said. Norway dealt Saab a blow in November with a contract for 48 Lockheed Martin F-35s and the Netherlands selected the U.S. plane as the best candidate to replace 85 older aircraft a month later. Denmark may make the same choice this year. All three countries are partners on the F-35 program. Among countries with no participation in the F-35, India is key, Kemp said, with a requirement for at least 126 fighter aircraft and perhaps as many as 300. Saab has proposed a deal in which it would build the first 18 planes and Bangalore-based Hindustan Aeronautics Ltd. would manufacture the rest. “Our relationship with India is good,” Kemp said. “We want to transfer technology and allow the Indians to get on with it. Basically we would become a subcontractor to HAL.” To contact the reporter on this story: Sabine Pirone in London at spirone@bloomberg.net

President Barack Obama Soothes China On Multi-Billion-Dollar US Debt

President Barack Obama Soothes China On Multi-Billion-Dollar US Debt

(NSI News Source Info) Washington - March 18, 2009: President Barack Obama said Saturday that China could have "absolute confidence" in the American economy, after Beijing pointedly questioned the safety of its huge haul of US government debt. Obama took up comments by China's Premier Wen Jiabao on Friday, which represented a rare assessment by Beijing on the health of the US economy and the prospects for China's hundreds of billions of dollars in Treasury bonds. "Not just the Chinese government, but every investor can have absolute confidence in the soundness of investments in the United States," Obama said after meeting Brazilian President Luiz Inacio Lula da Silva at the White House. "There is a reason why even in the midst of this economic crisis you have seen actual increases in investment flows here in the US." "I think it is a recognition that the stability not only of our economic system but also our political system is extraordinary." Obama said that his comments were applicable to both US Treasury instruments and investments in the US private and industrial sectors. Wen told reporters in Beijing on Friday that he was concerned about China's huge stake in the US economy as it endures the worst crisis in generations. "We have lent huge amounts of money to the United States. Of course we are concerned about the safety of our assets," Wen said. "To be honest, I am a little bit worried and I would like to ... call on the United States to honor its word and remain a credible nation and ensure the safety of Chinese assets." Wen's comments caused a stir in global markets, and were the latest disturbance to the critical US-Chinese relationship early in Obama's administration. Last week, military tensions rose after the United States said Chinese boats harassed the US Navy surveillance vessel Impeccable in the South China Sea, forcing the ship to take emergency action to avoid a collision. Beijing said the vessel was on a spying mission. China also balked at US comments on the human rights situation in Tibet -- but both sides tried to smooth over the row with Foreign Minister Yang Jiechi's visit to the White House on Thursday. Beijing held 727.4 billion dollars in US Treasury bonds at the end of last year, just ahead of Japan, the holder of 626 billion dollars in bonds, according to US government data. As the largest creditor to the United States, China is "extremely interested in developments in the US economy," Wen said. Analysts say a loss of confidence in US Treasury securities could cause a dramatic drop in the dollar and force Washington to pay higher interest rates. In February, Secretary of State Hillary Clinton asked China to keep on buying US debt, saying it could help jumpstart the flagging US economy and stimulate imports of Chinese goods. "By continuing to support American Treasury instruments the Chinese are recognizing our interconnection. We are truly going to rise or fall together," Clinton said. Most of China's foreign exchange reserves, which reached 1.95 trillion dollars by the end of 2008, is believed to be held in the greenback. White House spokesman Robert Gibbs said Friday that "there's no safer investment in the world than in the United States." Obama rolled out an audacious 3.55-trillion-dollar budget proposal last month that bristles with economic reforms and spending on healthcare, climate change and education. The budget forecasts a 1.750 trillion dollar deficit in fiscal 2009, but foresees that figure falling to 1.171 trillion dollars in 2010. The Chinese reportedly are concerned about the enormous amount of borrowed money, including Obama's nearly 800-billion-dollar stimulus, being used to boost US growth. Concerns are flaring in China that the stimulus plan could hurt dollar-denominated assets, with some observers urging China to cut US Treasury holdings, the official Xinhua news agency said last month. Domestic critics have charged that, as a developing country, China should be investing at home instead of subsidizing the world's richest country, or else diversifying into other foreign assets.