
Saab wins Brazil jets deal after NSA spying sours Boeing bid - joshfraser
http://www.reuters.com/article/2013/12/18/brazil-jets-idUSL2N0JX17W20131218
======
_djo_
Claiming that the NSA scandal is the primary reason for the Saab win is an
overly US-centric view.

While there's evidence that Boeing's chances were hurt by the NSA revelations,
it's not true that Boeing was a clear favourite. Both Saab and Dassault had
presented strong bids and were considered serious contenders, particularly as
both offered much higher industrial participation and technology sharing than
Boeing and as such had the support of Brazil's aviation industry. That cannot
be underestimated, and it's why Boeing was at a disadvantage even before the
NSA story broke.

The Saab Gripen met Brazil's FX-2 requirements, it has a lower operating cost
than the Rafale or Super Hornet, Saab has agreed to transfer a massive amount
of technology and Sweden has committed to investigate a quid pro quo
acquisition of Brazilian KC-390 tanker transports. Boeing could not match all
that.

~~~
rosser
_Claiming that the NSA scandal is the primary reason for the Saab win is an
overly US-centric view._

From TFA: "Until earlier this year, Boeing's F/A-18 Super Hornet had been
considered the front runner... "The NSA problem ruined it for the Americans,"
a Brazilian government source said on condition of anonymity."

Does it remain a "US-centric view" when _Brazil_ is the party saying, "Because
NSA"?

~~~
tedunangst
Not exactly, but consider that Brazil gains leverage simply by saying Boeing
was in the running, even if they weren't. e.g., Brazil wants the NSA gone, but
they don't have any means to apply the necessary pressure. Point at an already
failed Boeing deal, and tada, now you have a pressure point.

Or possibly Brazil had promised to go with Boeing, but recently decided Saab
was a better deal. Backing out would cost them whatever political capital is
traded in smoky rooms. Now they can point to the NSA and save face.

International relations are complicated.

~~~
growupkids
It's always surprising to me when people believe anonymous government sources,
when the statement is in that governments interest. Government personnel are
paid to act and speak in their governments interest, which includes lying,
exaggerating, provoking, etc., and in my experience when that source is
anonymous and when the statement is advantageous to that governments interests
it's probably not true, or not the whole truth. It lets that government
publicly disavow knowledge of the potentially inflammatory statement (we don't
want to hurt US relations!), while simultaneously telling the opposite story
with deniability (we want our citizens to think well gladly hurt US
relations!).

For all we know this "leak" is being used to legitimize something else
entirely, perhaps the Brazilian military is unhappy withy the decision and
this story exists to deflect criticisms from domestic sources: we picked the
unpopular aircraft because the NSA would use Boeings aircraft to spy on us. Or
we want to send a message, etc.

Welcome to world politics, where the truth is rarely what people say it is.

~~~
gabriel34
Indeed, the Brazilian military had openly declared the Saab Gripen as their
favorite after months of technical studies and tests.

On the other hand, the NSA spying on Brazil's president and on some large
companies (sign of a commercial use of NSA's resources, not just defense as is
otherwise claimed) may have contributed to the souring of some relations used
to lobby for Boeing, therefore weakening it's position and enabling Saab to
break the deadlock.

------
msantos
The French bid was turned down by the President herself after major set backs
in the current France-Brazil partnership building a nuclear submarine for the
Brazilian Navy.

Not mentioned here is the fact that old conspiracy theories surrounding the
explosion that destroyed the Alcantara launch pad and killed the cream of the
crop of the Brazilian space program, have recently been resurrected and it's
believed plausible by some members of the Brazilian government although not
widely publicized. Some blame the French for possible sabotaging it.

Over the years the Brazilian secret service (ABIN), have arrested several
French spies around Alcantara - the latest case was that a French spy posing
as kitesurf instructor. Other cases include water buoys found at sea near the
Air Base loaded with electronics, also blamed on the French.

EDIT: added a few sources (sorry portuguese only)

[http://www1.folha.uol.com.br/fsp/poder/137424-suspeita-de-
sa...](http://www1.folha.uol.com.br/fsp/poder/137424-suspeita-de-sabotagem-
fez-brasil-investigar-franceses-em-alcantara.shtml)

[http://www.metro.org.br/jose_alves/os-cacas-militares-e-
as-b...](http://www.metro.org.br/jose_alves/os-cacas-militares-e-as-boias-de-
alcantara)

[http://jornalpequeno.com.br/2013/11/22/governo-confirma-
cont...](http://jornalpequeno.com.br/2013/11/22/governo-confirma-
contraespionagem-em-alcantara-para-apurar-sabotagem/)

[http://www.planobrazil.com/dez-anos-depois-explosao-de-
fogue...](http://www.planobrazil.com/dez-anos-depois-explosao-de-foguete-
ainda-trava-setor-espacial-brasileiro/)

[http://en.wikipedia.org/wiki/Brazilian_rocket_explosion](http://en.wikipedia.org/wiki/Brazilian_rocket_explosion)

~~~
rbanffy
> old conspiracy theories surrounding the explosion that destroyed the
> Alcantara launch pad

I have to point out the VLS launcher has a seriously weird all-solid-fuel
design. I am not a rocket scientist, but, as an engineer, I have to wonder
what the hell those rocket scientists knew no other spacefaring country did
since nobody launches satellites on all-solid-fuel rockets. They cannot be
controlled after lit (the VLS used all-solid-fuel-with-oxidizer and not solid-
fuel-with-liquid-oxidizer).

When you are doing something nobody else is doing it the same way you are (in
special the people who have been successfully doing it for decades) it's time
for you to question your own wisdom.

~~~
tanzam75
> _I have to point out the VLS launcher has a seriously weird all-solid-fuel
> design. I am not a rocket scientist, but, as an engineer, I have to wonder
> what the hell those rocket scientists knew no other spacefaring country did
> since nobody launches satellites on all-solid-fuel rockets._

Sure they do.

For example, NASA's LADEE mission was launched to the moon in September 2013
on a Minotaur V: a five-stage all-solid rocket.

Last month, India just launched a Mars orbiter using the PSLV: a 4-stage
rocket with only the second and fourth stages being liquid. The first stage
was solid, and had 6 solid rocket boosters. Thus, it launched entirely on
solids.

And of course, there are lots of liquid-fueled rockets with solid boosters on
liquid-fueled rockets. The French Ariane 5, for example, has one liquid core
stage plus two solids. The solids produce 92% of thrust at liftoff. Solids are
great at producing thrust.

The American Titan IIIc rocket took this configuration to its ultimate
conclusion. It was launched solely on the solid rocket boosters. The liquid-
fueled core stage did not even ignite until a couple of minutes into the
mission, i.e., although it was at the bottom of the stack, it actually served
as a second stage.

If you're talking about spacefaring nations that avoid solids, you're really
only talking about the Russians, Chinese, and Ukrainians. They only use solids
on military missions, and stick with liquids on civilian missions. They get
the necessary thrust by clustering lots of engines together.

The Chinese moon rover, for example, was launched on a Long March 3B with a
total of 8 engines ignited at lift-off -- 4 liquid-fueled engines in the core
stage, plus 4 liquid rocket boosters. Yes, that's right, even their strap-on
boosters are liquid-fueled.

~~~
rbanffy
Thanks for pointing that out. Still, all-solid doesn't look like a very
popular choice.

------
dmix
Boeing builds spy satellites for the US gov and their "Boeing Defense, Space &
Security" division is deeply embedded in the intelligence community.

[http://www.nytimes.com/2007/11/11/washington/11satellite.htm...](http://www.nytimes.com/2007/11/11/washington/11satellite.html)

[http://ctovision.com/2010/09/new-boeing-intelligence-
collabo...](http://ctovision.com/2010/09/new-boeing-intelligence-
collaboration-center/)

------
TallGuyShort
I can't help but get the feeling, especially from the way things are cited in
the article, that the NSA spying was not the cause of Boeing's bid souring,
but rather that the decision was used as an opportunity to put some pressure
on the NSA. Good on them either way. The economic impact is just one of the
ways this program hurts Americans as well as foreign nationals.

~~~
rbanffy
The F/A-18 had the higher cost of all three final options. Also, the lack of a
full technology transfer program (only the Gripen NG proposal had it,
including local production) and the possibility of backdoors in any of the
multitude of unauditable software systems that fly the planes sealed its fate.

The Rafale was closer, but the high cost of maintenance did it.

------
mkuhn
Switzerland made a comparable decision this year selecting the Gripen [1]
which beat the Rafale, and Eurofighter (Boeing retracted the bid for the Super
Hornet).

The decision happened long before the NSA revelations and I think that shows
that the Gripen has things that speak for it on its own.

[1] [http://www.defenseindustrydaily.com/switzerland-replacing-
it...](http://www.defenseindustrydaily.com/switzerland-replacing-
its-f-5s-04624/)

------
hcarvalhoalves
I'm Brazilian. Here's my opinion:

The reason they mention it was the NSA is because the government wants to
capitalize on the anti-american commotion (and it's working).

The _real_ reason is that Boeing is a competitor to Embraer, so transfer of
technology would be limited. Boeing simply had a worse, more expensive offer.

~~~
oscargrouch
I wouldnt say "anti-american" but "anti-NSA"..

And its pretty deserved, and im saying that also as a brazilian, cause: would
you trust in the software, hardware and firmware of those after all we know
about the NSA revelations? worse yet , if you think you dont have access to
the source code, or to modify any part of it, as a pure blackbox..

Would you trust your country safety and security to something that its very
likely to be a trojan horse(somehow), after all we know now?

How can you trust your defense to something or somebody you cant trust at all?

(and lets not forget that Embraer was on the NSA espionage files too)

So, this is not "anti-american", but a pretty wise decision.. forgeting all
the politics involved in the case.. Its pretty rational

~~~
hcarvalhoalves
First, the Boeing offer wasn't even top 5 anymore. The only companies still on
the bid were Dassault and Saab (favored by the military). Then, out of the
blue, they come and announce... "we finally settled on Saab instead of Boeing
_because of NSA_ "... Give me a break.

Dilma is crazy to boost the government's image, internal and worldwide, making
our country look like a bastion of freedom and democracy, when we both know
it's none of that (unless you work for the government).

I agree with everything said about NSA, but we can't be naive to the fact this
is going to be used as a PWMD (Political Weapon of Mass Destruction) to
justify _anything_ from now on.

~~~
buzaga41
They're just passing the political bill for the USA to pay, of course it
wasn't the reason for the deal, things aren't that simple. But politics is
everywhere, the USA is always trying to get it's way, has used spying to cut
deals, spies on everyone, etc... I'm all for all countries everywhere playing
this card every time they can, why not?

------
sleepyK
The Gripen is simply the most cost effective choice of aircraft.... It already
uses a lot of American technology, so backdoors probably exist, but it is a
newer design than the old airframe of the FA-18, and it's easier to service
than the Rafale. The IAF had conducted multiple tests during their MMRCA
competition, and Rafale, Typhoon and Gripen came out as a equally matched,
with some saying that the Typhoon was an inferior plane. In the end, Rafale
won the Indian competition because of intense lobbying by the French, with
their Premier paying a visit to India to clench the deal.

Saab was very open for transfer of technology at that time, and I imagine it
still is, which would be one of the biggest factors in their favour. There
have also been some rumors about the less than stellar performance of the
Rafale in recent conflict situations which I'm sure also contributed to the
deal.

~~~
shin_lao
I agree with everything you said, but a minor correction: the Rafale has not
been exported yet, India has yet to acquire it.

------
flexie
Maybe Saab won because they had a better offer. And maybe Boing usually wins
these deals because they have the backing of large intelligence agencies. Who
knows.

~~~
jeltz
Could be. A popular theory is that in Norway Saab lost due to diplomatic
pressure from the US.

"In the fall of 08, we invited a number of USG officials to visit Oslo to make
the public case on why the F-35 is an excellent choice, and the private case
on why the choice of aircraft will have an impact on the bilateral
relationship (see refs A,B)."

[https://www.wikileaks.org/plusd/cables/08OSLO670_a.html](https://www.wikileaks.org/plusd/cables/08OSLO670_a.html)

------
doctorstupid
The U.S. has played dirty against the Saab Gripen before. See the Norwegian
section of
[http://en.wikipedia.org/wiki/Saab_Gripen#Failed_bids](http://en.wikipedia.org/wiki/Saab_Gripen#Failed_bids)

~~~
AmVess
Not to mention also killing off Canada's Avro jet company.

~~~
r-s
I was actually taught about Avro in Canada in grade 5. Would have been about
1998 or so. I Some very interesting stories about the company, and hundreds of
conspiracy theories as well. Very interesting company to say the least.

------
tn13
I don't see how NSA scandal should affect this deal. You dont snap such major
deals because you want to insult someone. That is childish. However if Brazil
believed that US manufactures might help NSA in planting backdoors, malware
into their equipment they could have simply stated it more publicly and done
even greater damage to American companies.

The weapon manufacturers + US government nexus has changed world politics over
last 50 years. In case of India and Pakistan, US has provided fuel to the
conflict just to make more profit from this. Sooner or later the developed
world is going to see through the US policy of benefiting from conflict. China
is already self dependent in heavy arms manufacturing, India is slow but
reaching there. In probably next 20 years, US monopoly on defense equipment
will end.

~~~
mcosta
I'm pretty confident in 20 years those countries will be 15 years behind USA
weapons.

~~~
atmosx
Really? Back in 1999 I could not have imagined that although in 2008 Georgia
would invade S. Ossetia with the blessings of the USA, will get slapped by the
Russian army that way and the USA will just ... do nothing about it.

Nor that in 2013 an NSA employee will be in Russia embarrassing the USA like
this, without the USA doing nothing.

It's not that Obama is _good_ and G. W. Bush is _bad_. It's more that the
times are A changin'.

------
ascendantlogic
Good, this clearly isn't going to change because of moral reasons. The only
way the US government is going to change direction on this is if it hurts them
where they really care, which is "their" pocketbooks. "Their" in quotes
because really it's the pocketbooks of the companies that give them millions
to re-elect them.

------
adamnemecek
A while back I came across this wiki article which is relevant

[http://en.wikipedia.org/wiki/ECHELON#Examples_of_industrial_...](http://en.wikipedia.org/wiki/ECHELON#Examples_of_industrial_espionage)

~~~
joering2
Thanks i had no idea.

Long story short: while totally denying its existance the pact of USA, UK and
many other countires spent billions of dollars to built sattelite-
communication interceptinig facilities... while 99% of world's traffic moved
into fiber optic undersea cables by 2006.

------
internalaudit
The lavabit case warns against using proprietary American software or services
that use it or simply cloud services located in the USA. We know that the NSA
will issue a gag order and demand that the software or service provider
installs backdoors without telling his foreign clients. If US-based technology
companies want to be considered as potential candidates, they will have to
surrender the entire source code for the software and the full design
specifications for the hardware, and pay for non-American experts to fully
inspect it. Otherwise, no foreign company in their right mind will buy their
gear any longer. The NSA-inspired breach of trust pretty much signifies the
beginning of the end for US-originated technology exports to the rest of the
world.

------
downandout
I consider this to be a good thing. Boeing is going to run to their lobbyists
screaming bloody murder. The lobbyists will then ensure that the right palms
are greased, the right fundraisers are held, and the right golf invitations
are issued. Suddenly, there will be movement on the issue at the highest
levels of government.

It is sad that this is how it works, and that it takes evidence of a large
corporation losing money to be the catalyst for change. But at least it will
work in our favor for once.

------
darkbot
Just so you know, FRA and NSA are best buddies. FRA is the Swedish equivalent
to NSA. [http://www.svt.se/ug/fra-part-of-top-secret-hacker-
project](http://www.svt.se/ug/fra-part-of-top-secret-hacker-project)

------
neves
Mirian Leitão is anti-governist and one of the main economical commenters of
Brazilian media. She says that it was the NSA that kept Boing off the deal:
[http://oglobo.globo.com/economia/miriam/posts/2013/12/18/com...](http://oglobo.globo.com/economia/miriam/posts/2013/12/18/compra-
de-cacas-preco-afastou-franceses-espionagem-afastou-boeing-518571.asp)

~~~
a3n
"kept Boing ..."

It's Boeing, with an 'e'.

Mnemonic: "Boeing planes don't go boing." :)

------
comatose_kid
In b-school, we talk a lot about political risk - mainly in terms of emerging
economies. The US government's actions are resulting in events that will
heighten investor perceptions of political risk here too.

------
ddade
Whatever Brazil loses in capability, Rouseff gets back in her relations with
her neighbors. I guarantee there's isn't a head of state in South America that
hasn't sent her an 'ataboy. Brazil even further establishes itself as the
country that matters in South America. That's worth 36 planes that will never
fire a shot in anger anyway...

~~~
_djo_
The Gripen NG does not appear to be any less capable than the Super Hornet,
with the exception of being single-engined as opposed to dual-engined.

------
Havoc
Well this is interesting. Everyone including the Americans are up in arms
about the NSA thing....right up until it gets blamed for a lost bid. Some
weird psychological bias at work here though I can't quite put my finger on
it.

------
jusben1369
Sounds like Brazil went with the low price leader (French comments were
interesting) and didn't miss a chance to stick it in the eye of the US with a
couple of anonymous quotes. If you follow the other logic it's pretty
depressing "Yes, you had the better technology and were the preferred choice
but we went with an inferior product because of spying and no that wouldn't
make us feel really stupid if we get into a war with a neighbor who outguns us
in the skies because they have better product at least we stuck it to the US
in 2013!"

~~~
jeltz
A third possible explanation could be (I do not know enough about US-Brazilian
relations to know if it is plausible):

Before we thought you were an ally we could trust, so we were going to buy
your overpriced jets to strengthen the friendship. Now that you have showed
your true face we are going to go with the lowest bidder instead.

Saab has lost several bids due to countries buying worse planes from the US
for diplomatic purposes.

------
senthilnayagam
India snubbed America in 2011 by not giving the 11 billion $ fighter jet deal,
even though Obama lobbied for it.

Bad US behavior does impact their business . Expect similar action for the
Indian Diplomat arrest case

------
Mikeb85
While it's a good opportunity to take a political jab at the US, the F-18 was
never a contender.

Both the Rafale and Gripen are much better choices. The Gripen especially,
it's probably the best performing plane per dollar in the world - and has a
lot of advantages besides sheer performance...

------
facorreia
In other news: "Army officials claim that their ammunition stocks are going to
last for just one hour of war"

[http://www.brazildefence.com/army-officials-claim-that-
their...](http://www.brazildefence.com/army-officials-claim-that-their-
ammunition-stocks-are-going-to-last-for-just-one-hour-of-war-133/)

[http://www.brazzilmag.com/home/113-august-2012/12921-one-
hou...](http://www.brazzilmag.com/home/113-august-2012/12921-one-hour-of-war-
thats-all-brazil-has-ammunition-for.html)

------
msantos
As the article clearly says, this was an off-and-on deal rolling for years.

"Fan fact" the Brazilian government has been seating on this project to renew
the aging Air Force's fleet since 1994.

And in 2001/2002 the contenters were (in no specific order):

    
    
        - Sukhoi Su-35
        - Eurofighter Typhoon
        - General Dynamics/Lockheed Martin F-16
        - Mikoyan MiG-29
        - Saab JAS 39 Gripen
        - McDonnell Douglas/Boeing F/A-18 Super Hornet
        - Dassault Rafale

------
caprad
> 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.

This to me is the most interesting quote. Although vague, you just have to
wonder how much of this spy data goes to companies? Anyone can understand that
the US has an interest in maintaining the importance of their own corporations
around the world.

------
GigabyteCoin
This is sickening. I live in Canada, and this directly affects a friend's
family of mine considerably.

Both my friend and his father are full time factory workers at a company
called "Goodrich". They machine landing gear primarily for Boeing jets.

This means less available-overtime at the very least (which many of the
workers rely on), and possibly lost wage increases in the future. Who knows.

~~~
sleepyK
I sympathize with you, but Boeing never had a chance if one goes purely by
cost: benefit comparisons.

The only way they could have won this is if they lobbied enough for the
Brazilians to look past the significant shortcomings of the Boeing aircraft.
And I think even then their lack of cooperation when it comes to transfer of
technology and offsets would have sabotaged the deal.

Brazil already has a very reliable civilian aircraft maker in Embraer, and
they are looking to bootstrap them into defense through transfer of
technology. Boeing never would have done that.

~~~
internalaudit
Distrust is a very strong motivation to reject a bid. If Boeing had won the
bid, the NSA would have armed themselves with a FISA court order, mandating
Boeing to install malware in the fighter jets, along with a gag order
forbidden Boeing to tell Brazil. Due to their massive internal audit problem,
the one or the other rogue NSA contractor would end up selling off a copy of
the specifications describing the backdoor to crime syndicates, who would then
be able to blackmail the Brazilian government. To cut a long story short, it
has now become impossible to buy any American technology product which
contains proprietary software or hardware. It must now all be open source and
open design and then reviewed by non-American experts at the expense of the
American company trying to sell its gear.

------
sebcat
Sweden sent five JAS39C Gripen to Libya as a part of Operation Unified
Protector in 2011. I was told that they performed well in the surveilance role
with their "spaningskapsel" (surveilance capsule?), providing intel to the
coalition. If anyone has any insight in how well Gripen as a platform
performed during that op, please share.

------
gverri
As I remember the F/A-18 was always considered a front runner for political
reasons (pressure). It caused a lot of commotion among those who really
understand about aeronautics.

And it's clear that the last choice was a political one also.

------
yononabike
perhaps Brazil is just growing into its own. The BRIC countries are all
maturing, and perhaps, with that comes a more independent - non US dependent -
stance.

------
drewblay
Didn't Saab go under? Or was that just their automotive division?

~~~
kalleboo
Only automotive, which was a separate company under GM stewardship. Same as
how Volvo Cars (under Ford) went bust, but Volvo Trucks is still going well.

------
brosco45
The end of US tech dominance is at hand.

------
atmosx
off-topic:

I am thrilled to read incredible insightful comments in posts like this. HN
intrinsic value is incredible.

------
bananacurve
This is fodder for wankers. Delude yourself if you like, but it only
strengthens America.

------
wil421
That's fine as long as we keep Lockheed planes to ourselves. Nothing beats the
F22.

~~~
gaius
This is the plane that asphyxiates it's pilots remember...

[http://www.cbsnews.com/news/air-force-confirms-air-supply-
pr...](http://www.cbsnews.com/news/air-force-confirms-air-supply-problems-
for-f-22-jets/)

~~~
msantos
"Fun fact" two of the worst accidents with the Saab JAS-39 Gripen were blamed
on software faults.

Sources: [http://en.wikipedia.org/wiki/Saab_JAS_39_Gripen#cite_ref-
FOO...](http://en.wikipedia.org/wiki/Saab_JAS_39_Gripen#cite_ref-
FOOTNOTEEden2004389_228-0)

[http://www.flightglobal.com/FlightPDFArchive/1989/1989%20-%2...](http://www.flightglobal.com/FlightPDFArchive/1989/1989%20-%200734.PDF)

~~~
drrotmos
Yeah, Pilot Induced Oscillation. It was actually the same pilot too. Not to
blame him though, of course.

Looking at the statistics though, the Gripen has been in very few accidents
compared to other fighter jets.

