December 22, 2013. David Pugliese - Defence Watch
As Defence Watch readers know Brazil recently selected the Gripen fighter jet built by Saab as its new military aircraft. The contract is worth $4.5 billion.
Brazil’s air force was told of the government’s decision by President Dilma Rousseff just 24 hours before the public announcement last week.
But shortly before the announcement, Boeing was seen as the front-runner with its Super Hornet. Did the NSA spying fiasco have an impact on the deal? More from Reuters news service on that issue:
Brazilian officials said the deal, one of the most coveted emerging-market defense contracts, went to Saab because it provided the most affordable option for the new jets, as well as the best conditions for technology transfer to local partners.
The choice, Defense Minister Celso Amorim said, “took into account performance, the effective transfer of technology and costs – not just of acquisition but of maintenance.”
Until earlier this year, Boeing’s F/A-18 Super Hornet had been considered the front runner. But revelations of spying by the U.S. National Security Agency in Brazil, including personal communication by Rousseff, led Brazil to believe it could not trust a U.S. company.
“The NSA problem ruined it for the Americans,” a Brazilian government source said on condition of anonymity.
A U.S. source close to the negotiations said that whatever intelligence the spying had delivered for the American government was unlikely to outweigh the commercial cost of the revelations.
“Was that worth 4 billion dollars?” the source asked.
The lament echo’s recent complaints by Cisco Systems Inc , which said in November that a backlash against U.S. government spying contributed to lower demand for its products in China.