The International Rafale forum

Boeing Ready to Buy F-18 Parts in Brazil to Win Sale (Update1)

By Andre Soliani and Joshua Goodman

July 10 (Bloomberg) -- Boeing Co. is prepared to have Brazilian companies supply a “big portion” of components for its Super Hornet jetfighter, creating as many as 5,000 local jobs, to sell 36 of the warplanes to the Latin American nation.

Jim Albaugh, the head of Boeing’s defense unit, said agreements have been signed with 27 Brazilian companies that are capable of producing parts for the F/A-18, including Empresa Brasilieira de Aeronautica SA, the world’s fourth-largest airplane maker. The pledge comes as Boeing maneuvers against competitors Dassault Aviation SA and Saab AB to win the sale.

“A big portion of the F-18 will be built here,” Albaugh, 58, said today in an interview in Brasilia. “For every dollar that goes toward that airplane, that money will come back to Brazil as manufacturing, software, avionics, and electronics.”

Boeing, the second-biggest defense contractor in the U.S., is counting on foreign military sales to make up for an expected slowdown in orders from the Pentagon. At the same time, Brazil, Latin America’s biggest economy, is beefing up its military after years of neglect and seeking to rebuild its arms industry. Through the 1980s, Brazil was the world’s 11th biggest weapon exporter.

Foreign Bids

Brazil’s tender for the fighter jet is the fourth-biggest foreign bid Chicago-based Boeing is competing for this year, Albaugh said. Defense sales provide about half of Boeing’s revenue. Brazilian President Luiz Inacio Lula da Silva is expected to award the contract, which analysts say could be worth as much as $4.5 billion, as early as next month.

Competition is stiff. Saab AB, the Swedish maker of the Gripen warplane, is prepared to shift as much as 50 percent of future Gripen production to Brazil, Bob Kemp, marketing chief for the $50 million plane, said July 7.

The other contender is Paris-based Dassault Aviation SA, which is pitching the Rafale. Dassault’s Mirage 2000 is currently Brazil’s most-advanced warplane. French officials have “clearly stated their openness” to cooperate with Brazil in the technology field, Yves Robins, vice-president corporate communication of Dassault Aviation, said in an interview this week.

Under the tender guidelines, the company that wins the contract is required to transfer technology to Brazil equal to the full purchase price of the planes.

‘Technology Access’

“Our main goal is technology access,” Brazil’s Defense Minister Nelson Jobim said yesterday.

That favors Boeing’s competitors who are less burdened by U.S. restrictions on arms exports, said Richard Aboulafia, vice president at Teal Group, a Fairfax, Virginia-based consultancy. U.S. rules may include demands for on-site inspections and approval of any sales to third parties over the plane’s 40-year flying life, he said.

“Certainly it’s a process that you have to go through with the United States and it can be a process that takes time,” Albaugh said. “But ultimately our customers get what they need, get what they want.”

To replace its aging fleet, Brazil may order total of 120 fighter jets. India plans to order 126 warplanes, while Denmark may buy as much as 42 and Greece 40, Albaugh said.

The sale is Dassault’s to lose, said Alexandre Barros, head of Early Warning, a Brasilia-based political risk firm. The French have been Brazil’s top arms supplier since 1978, when President Jimmy Carter banned U.S. arms sales to Latin America, fearing an arms race among the reigning military juntas. The policy was reversed in 1997.

‘No Qualms’

“The French have no qualms about transferring a lot of technology,” said Barros.

French President Nicolas Sarkozy has lobbied for the deal, which would be the Rafale’s first international sale after failed bids in Morocco, South Korea and Singapore. During a visit last December, he signed contracts worth 8 billion euros ($11 billion) to build 50 Super Cougar helicopters and five submarines.

Lula invited Sarkozy as Brazil’s guest of honor at its independence day Sept. 7. After meeting him in Paris this week, Lula said he hopes to sign new defense accords at that time.

The F/A-18’s biggest advantage against the Dassault is a longer track-record, especially in environments like coastal Brazil, said Aboulafia.

Economies of Scale

Currently the F/A-18 is being produced at a rate of 43 per year, compared to 13 per year for the Rafale and 5 for the Gripen, so Boeing is able to win on cost per unit, Aboulafia said.

The Gripen is the weakest of the three candidates, says Michel Merluzeau, an aviation analyst at G2 Solution in Kirkland, Washington. Deliveries and production for the single- engine plane are falling, making its survival dependent on more financing. Sweden’s annual defense spending of $5.5 billion is less than 1 percent the $623 billion U.S. market, he said.

Boeing rose 0.8 percent to $39.65 in New York Stock Exchange composite trading. The stock has dropped by more than half since Feb. 28, 2008, the day before the company lost a $35 billion U.S. tanker competition to a group including rival European Aeronautic, Defence & Space Co. The stock has also been hurt by delays to the company’s newest commercial aircraft, the 787 Dreamliner.

To contact the reporter on this story: Andre Soliani in Brasilia at asoliani@bloomberg.netJoshua Goodman in Rio de Janeiro jgoodman19@bloomberg.net
Last Updated: July 10, 2009 16:49 EDT

France and Brazil hope to conclude defense agreements [07/07/09 - 14:31 - Reuters] Gonzalo Fuentes Click here PARIS (Reuters) -



France and Brazil emitted the hope to be able to conclude soon from new agreements in the field of l' industry of defense.

Presidents Nicolas Sarkozy and Luis Inacio Lula da Silva met with l' Elysium before the visit that the Brazilian Minister for Defense, Nelson Jobim, will make in France of the 10 at July 14 to prepare the signature of several agreements.

" We need to reinforce the free-Brazilian ratios in l' industry of the défense" , the Brazilian president at the time d' said; a joint press conference. " We hope to conclude certain agreements in September (7) at the time of the next visit from Nicolas Sarkozy, in so much qu' special guest for the festival of l' indépendance" , it has says.

Last December, France signed with Brazil for six billion d' military euros of contracts, relating in particular to the delivery of four submarines and 50 helicopters. " One gave a progress report on the military strategic co-operation, of the planes, the helicopters, of under-marins" , explained Nicolas Sarkozy. "we already signed many things, we will sign others".

I proposed in Brazil that we develop a true military aviation whole with transfers of technologie."

Collaboration between Brazil and its neighbor in north, the French Guiana, was evoked during this working lunch. " We are ready to open our space centre of Kourou in Guyana to make a place with the engineers brésiliens" there; , said the French president.

The construction of the bridge on l' Oyapock, river acting as natural border, should be completed in October 2010, " enfin" , according to Nicolas Sarkozy. The project, which must make it possible to connect the d' cities; Oiapoque in Brazil and of Saint-Georges of l' Oyapock in Guyana, had been launched in 1997. Collaboration between Guyana and Brazil also has as a subject l' environment, according to the French president.

"We will cooperate in Amazonia to ensure the biodiversity and sustainable development. We will set up a Brazilian center of the biodiversity and français" ,it has says. Clement Guillou, published by Yves Clarisse

Dassault May Build Rafales in Brazil to Win Sale, Valor Reports

July 21 (Bloomberg) -- Dassault Aviation SA is prepared to build 36 Rafale warplanes in Brazil in a bid to be chosen over Boeing Co. and Saab AB for a $2 billion order, Valor Economico said, citing the Paris-based company’s representative in Brazil.

Dassault has signed contracts with Empresa Brasilieira de Aeronautica SA, the world’s fourth-largest planemaker, and 37 other companies to shift production of the Rafale to Brazil, Jean-Marc Merialdo said, according to the Sao Paulo-based newspaper. Dassault has a 0.9 percent stake in Embraer, Valor said.

As part of a long-term defense agreement with Brazil, the French government has also authorized Dassault to transfer all of the Rafale’s technology to Brazil, including the source codes for the fighter jet, the newspaper said, citing Merialdo.

Brazil’s military is expected to decide the winner of the so-called FX-2 program later this year.

Brasil confirma que vai comprar 36 caças da França para a Força Aérea


BRASÍLIA - A presidência da República divulgou uma

nota conjunto com o governo francês confirmando que o Brasil vai comprar o caça os caças franceses Rafale para a Força Aérea Brasileira (FAB) a um custo total estimado em R$ 3,8 bilhões. A decisão teria sido tomada durante uma reunião do presidente Luiz Inácio da Silva com o presidente francês Nicolas Sarkozy no Palácio da Alvorada. Segundo a nota, o país vai adiquirir 36 aviões de combate. O anúncio significa que foi encerrado o processo de seleção feito pela FAB, o chamado programa FX-2. Perderam a disputa o caça sueco Gripen e o americano F18.

Na reunião, Lula formalizou ainda o um acordo no valor de 6,1 bilhões de euros que prevê a compra de quatro submarinos convencionais e uma frota de helicópteros para Força Aérea Brasileira. Além disso, está prevista também a transferência de tecnologia para a construção, pela Marinha, de submarino movido a energia nuclear.

O acordo de cooperação militar que os presidentes da França e do Brasil formalizaram nesta segunda dá início ao ambicioso programa de reaparelhamento das Forças Armadas. Até 2020, o Brasil terá a maior e mais poderosa força naval da América Latina, equipada com submarinos, fragatas, navios leves, corvetas - um volume estimado em 35 unidades - além de mísseis de longo alcance, torpedos, aviões e helicópteros de tecnologia avançada.

Sarkozy, que chegou ao Brasil na noite do domingo, assistiu nesta segunda-feira ao desfile de 7 de Setembro na Esplanada dos Ministérios, em Brasília, como convidado de honra. Lula chegou ao desfile no Rolls Royce presidencial, acompanhado da primeira-dama, dona Marisa, depois de passar em revista as tropas. Em seguida, o presidente seguiu para a tribuna de honra, localizada nas imediações do Ministério da Defesa, para a cerimônia militar. Cerca de 3,6 mil pessoas participaram do desfile.

O desfile em Brasília foi marcado ainda por um protesto. Um grupo de 100 estudantes da Universidade de Brasília conseguiu invadir a pista reservada ao desfile militar. Carregando faixas contra o presidente do Senado José Sarney, eles entraram em choque com a Polícia Militar. Um dos estudantes foi agarrado pelo pescoço pela PM. Os estudantes estavam próximos ao palanque de autoridades onde estavam os presidentes Lula e Nicolas Sarkozy.

"Lula eu vim aqui só para te ver. Fora Sarney", gritavam os estudantes.

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