Boeing's hopes of sealing a $4.5 billion deal with the government of Brazil crashed, Wednesday, as the country's air force opted to source 36 fighter jets to upgrade its fleet from Swedish rival Saab. Boeing was the favorite to get the deal but its chances nose-dived on news that the intelligence agencies of the United States had intercepting email messages of Brazilian President Dilma Rousseff and that of her staff.
The decision was disclosed by Defense Minister Celso Amorim and Air Force Chief of Staff General Juniti Saito during a press conference. The deal is worth $4.5 billion with the contract to be finalized by 2015 and delivery of the new Gripen NG jet fighters expected to be completed by 2020. The new planes will replace the ageing Mirage fighters of the Brazilian air force that will be declared out of service this week.
"...took into account performance, the effective transfer of technology and costs, not only of acquisition, but also of maintenance. The decision was based on these three factors," said Amorim in a statement.
During a press conference Amorim repeatedly cited technology sharing and cost as the primary reasons that the contract was awarded to the Swedish firm, while not denying nor confirming that the NSA spying had influenced the government's decision.
"The NSA problem ruined it for the Americans," an anonymous source working for the Brazilian government told Reuters.
This statement was supported by the declaration of Welber Barral who worked as trade secretary between 2007 and 2011.
"Boeing only didn't win the deal because of the lack of trust created by the spying incident. Had the decision been last year, Boeing would have won," Barral said in a phone interview with Bloomberg Businessweek. In the same report, Boeing emailed a statement to the publication that it will work with Brazil's air force to find out why it lost the bid.
The announcement of the deal resulted in Saab's shares jumping up by as much as 30 percent to 174.3 kronor, its highest since 1998. Boeing's shares slid by 0.13 percent. France's Dassault Aviation was also among the frontrunners to win the deal. Its shares slumped by 0.4 percent.
