Boeing looks to win sale in Brazil
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. Should Brazil buy the jet from Boeing, it will create opportunities for suppliers beyond defense, he said.
"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.
Brazil's tender for the fighter jet is the fourth-biggest foreign bid 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 a contract, which analysts say could be worth as much as $4.5 billion, as early as next month.
Competitors
Chicago-based Boeing is competing in Brazil with Saab AB, the Swedish maker of the Gripen warplane, and Paris-based Dassault Aviation SA, which is pitching the Rafale.
Saab is prepared to shift as much as 50 percent of future Gripen production to the South American country, Bob Kemp, marketing chief for the $50 million plane, said.
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.
Under the tender guidelines, the selected jetfighter supplier is required to transfer technology to Brazil equal to the full purchase price of the planes.
"Our main goal is technology access," Brazil's Defense Minister Nelson Jobim said.
Boeing rose 0.25 percent, to $39.40 at 1:19 p.m. in New York Stock Exchange composite trading. The shares have dropped 53 percent 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.