A Nervous Deal: Swedish Prime Minister defends the Gripen in Brazil

By Vianney Junior
Senior Defense & Aerospace Analyst
Chief Aircraft Evaluation Editor.

A day after the inauguration of the President of Brazil in Brasilia for the next four years term, Swedish Prime Minister Stephen Löfvens met Dilma Rousseff to discuss about what he thinks to be an important deal for both Sweden and Brazil. He believes not only on jobs that will be generated, but other development opportunities. Löfvens describes the Gripen contract, a deal worth US$ 5.4 billion, as part of a strategic partnership between Sweden and Brazil that will last for several years.

The Swedish Prime Minister also visited Embraer, the Brazilian company globally known for its commercial aircrafts, and that will be Saab's main partner for the Gripen NG (New Generation) manufacturing.

The Gripen NG defeated the American F/A-18 Super Hornet and the French Rafale in the Brazilian F-X2, a contest to select a multirole fighter to replace the aging fleet of Brazil’s Air Force. Easy to presume that such kind of deal goes much further than the initial 36 aircraft purchase. It can achieve at least 80 units more, over the coming years.

Well, even with this bright scenario, it is not always a bed of roses to SAAB.

Hush-hush

Sveriges Television’s reporter, Marie Nordstrand, was covering Löfvens’ visit to EMBRAER. According her remark, she faced a kind of secrecy atmosphere from company's side. She was not allowed to film or take any pictures during the tour and presentation in the factory.

EMBRAER also refused to let any of their managers to be interviewed. The reason was, according to the company's press officer, that the situation is still delicate. The officer tried to justify that the contract with Saab was not quite finished. This situation, however, is denied by SAAB itself.

Friendly Fire

The deal has been criticized from several sides, including Löfvens government’s partners, as the Green Party, which among other things states that it is Brazil's poorest people who will have to bear the Gripen purchase. One-fifth of the country's population lives below the poverty line and even the country’s re-elected president, Dilma Rousseff, has herself stated that Brazil needs to invest big money in schools and health care.

Export Restrictions

During the KC-390’s rollout in Gaviao Peixoto, one of the EMBRAER’s assembly facilities in Sao Paulo, the Argentinian Minister of Defense has announced the interest of his country on buying the new Gripen to be produced in Brazil. Immediately, non-Swedish suppliers of systems and engine for Saab’s fighter, made clear their “embargo” of any exportation that could threat some of their own nation’s interests. In this case, the issue was the Falklands. Brazil has figured out even before the very first aircraft has begun to be built, that it won’t be totally free to sell the Gripen NG.

Intellectual Property’s Uncertainties

Other concern around the contract in Brazil is about the level of participation of Brazilian engineers on the aircraft development. The strongest argument in favor of the Gripen, during the F-X2 campaign, was the fact that 40% of the design would be done in partnership with local professionals, in this case, Embraer’s engineers. This participation would attend Brazilian demands related to intellectual property share. However, the President and CEO of SAAB, Håkan Buskhe, has declared that the development of the Gripen NG is already finished. The Brazilian participation on the design would be restricted to the biplace version, called Gripen F.

Technical Issues

Some people have been speculating around the constant changing of the specifications of the New Gripen. They use to argument that weight increasing could compromise its operational performance. These issues could imply, for example, on maximum take-off weight, which could force fuel to be removed some times in order to allow a specific weapons configuration. A full description of Gripen’s specifications shall be taken only by the end of 2015, the year scheduled for Gripen NG prototype’s maiden flight.

Dismissing Criticism

According to Enligt Bo Torrestedt, Saab's marketing manager in Latin America, the deal with Brazil is entirely clear. Only a few details around remain to be negotiated.

When asked by Sveriges Television’s reporter, Marie Nordstrand, if there is something that could ruin this deal, Torrestedt answers that it’s hard to believe. For him, they’ve got a point of no return.

The Prime Minister Stefan Löfven has strong convictions to refuse all of the criticism. To his counterparts in Swedish Parliament he replies that countries must have the right to decide for themselves. He thinks that Sweden have confidence in Brazil as to how they want to invest their money.

For the exports concerns, he ensures that there are rules about this and there is nothing to discuss right now, at least not with the Swedish government.

About EMBRAER’s secretiveness: if it is up to non-disclosure agreements, or if there is something more? Well, we will see on next chapters.