Boeing says warplane sale hits US-Brazil turbulence

By on Tuesday, October 15th, 2013

Boeing’s bid to win a major Brazilian warplane contract is facing headwinds from US-Brazil tensions over alleged US spying, a top Boeing official said in Washington Friday.

Allegations that the United States spied on the communications of Brazil’s president, Dilma Rousseff, led her last month to cancel an October 23 state visit to Washington, putting the US company’s bid in a holding pattern, said Donna Hrinak, head of Boeing Brazil.

“We expected that the visit would send a signal that Brazil and the US were interested in the kind of strategic partnership that could make possible a decision in support of our proposal,” Hrinak said during a seminar on the Brazilian economy.

“The postponement of the visit means that any progress about the issue was also postponed,” said the former US ambassador to Brazil.

Brazil has been negotiating for years to buy 36 fighter jets. Boeing’s F/A-18 Super Hornet is competing for the $5 billion deal against the Rafale made by French firm Dassault and the Gripen NG made by Saab of Sweden.

Initially, the government of Luiz Inacio Lula da Silva had indicated it was ready to sign a deal with Dassault, but when Rousseff took office in 2010 she appeared to scratch the military aircraft order from her list of national priorities.

In the past two years, the Brazilian government has hinted that it prefers Boeing’s Super Hornet, especially after the US aerospace and defense giant agreed to transfer the aircraft’s basic technology.

But Brazil is interested in getting access to development and construction technology, including software programs and navigation and radar details, holding up a deal.

Government sources in Brasilia have signaled that Rousseff wants to make the decision by the end of this year.

Hrinak said Friday that she understood the reasons why Rousseff postponed her state visit to Washington after press reports that the US National Security Agency had spied on online and other communications of Rousseff. The allegations stem from documents leaked by fugitive former US intelligence contractor Edward Snowden.

“No matter how justified is Brazil’s indignation with the NSA episode, people won’t forget the benefits that a partnership of this kind can provide,” the Boeing official said.

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