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Brazil’s Embraer awarded $355 million U.S. Air Force contract

By Channtal Fleischfresser | January 2, 2012, 4:27 PM PST

In a major victory for Brazil-U.S. commercial relations, Brazil’s Embraer won a contract to build counterinsurgency aircraft for the U.S. Air Force. Beating out U.S.-based Hawker Beechcraft, Embraer will provide America with 20 A-29 Super Tucano light attack aircraft, as well as support services for missions, as part of the $355 million deal.

The aircraft will be built in Florida, together with U.S. tech company Sierra Nevada. The project is slated to use more than 70 U.S.-based suppliers and create 1,200 American jobs.

While Embraer planes already enjoy a significant presence in the U.S. commercial market, this deal bolsters its credentials in the defense sector, which now makes up roughly 15 percent of its revenue.

Politically, the deal is a success for Brazilian President Dilma Rousseff, who has been trying to strengthen US-Brazilian relations following a recent rift over Iran’s nuclear program. Some Latin American countries already use Embraer’s Super Tucano in their air forces, but this deal with the U.S. Air Force could ease the company’s dealings with other governments as well.

The deal also appears to have assuaged fears regarding allegations of corruption in the Brazilian company.

But not everyone is happy. Hawker Beechcraft, partially owned by Goldman Sachs, filed suit with the Court of Federal Claims, saying that it had been excluded from the bidding for the contract.

Photo: Embraer

via [Financial Times]

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About Channtal Fleischfresser

Channtal Fleischfresser is a contributing editor for SmartPlanet.

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It's 2012

Hawker was originally a British company. Aviation Week is reporting that Hawker Beechcraft is in financial trouble & will be split up. The civil aviation Beechcraft part will go to a Chinese company (oh, the horror) & the defense Hawker part to the highest bidder, foreign or domestic. The lawsuit is about getting the highest possible price for Hawker.
American vs foreign ownership hasn't been a simple question for years, whether for munitions or anything else.

Posted by hoodedswan

3rd Jan

Just
In

Technical Superiority p5

Now for those of you who still think that the government's decision of awarding the contract to a foreign company will be taking much needed jobs from American workers, here's some food for thought. About 70% of all components in the aircraft (be them hydraulic actuators, avionics, sensors or antennas) are American made, it's powered by the same Pratt & Whitney (Canada) engine as the AT-6, and it will be assembled in Jacksonville, Florida by skilled American workers. Still think we're getting a bad deal?

Edited by windobsession

Updated - 9th Jan

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It sounds good in theory...

...considering it will create 1200 US jobs and use 70 US-based suppliers. However, it is still a Brazilian company. How many US jobs and US-based suppliers would have been used if Hawker Beechcraft had been given the contract?

Why are we not giving preference to American-based businesses, especially when it comes to our military contracts? When even our military is outsourcing our nation's defense, we have serious problems here at home. Not that this is really anything all that new. The level of complacency in America is astounding.

Posted by SkyWlf77@...

2nd Jan

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A problem with a theory

Devil's advocate time, because I do agree with you. The problem with your theory is that there is a possibility that the best bidder is actually the foreign company. And by that I mean having the best possible product. If we were to keep the contract with US companies, and it gives us an inferior product, I think that would be a travesty. Don't we want the best equipment for our soldiers, no matter who produces it?

Next idea has to do with the political environment right now. Some politicians will probably go with a bidder that will "create" more jobs instead of just supplying work to already existing jobs, no matter how ridiculous that may be. And that goes directly towards the level of complacency you mention. It really is pathetic.

Posted by 321.ABC

Updated - 9th Jan

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Brazil

...and the level of governmental complacency and negligence is staggering! Who, in their right mind, would let these same people be responsible for our health care? The same nuts in government can harass a guitar company with the false allegation of using endangered wood from India, but don???t even inform companies in America of the bidding for the Air Force contract.

Posted by LenzE

3rd Jan

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People seem to forget...

... that the Super Tucano is based on a war-winning US design. The Tucano itself was designed by US engineers and rejected by US manufacturers, to be purchased and built by Embraer more than 30 years ago.

If you ask me, I'm glad to see a P-51 descendant return to the US Air Force.

Posted by vulpine@...

3rd Jan

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It's 2012

Posted by hoodedswan

3rd Jan

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A Win

With globalization, keeping US jobs and suppliers in business is a win in my books.

Posted by dcr100@...

8th Jan

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Technical Superiority p1

What the press has been remiss in mentioning (and what Hawker Beechcraft executives have been keen on omitting) is that the Super Tucano's technical superiority over the AT-6 was demonstrated in a stand-off held by the USAF in January 2011. During this event, the AT-6 repeatedly failed to meet specific mission and performance requirements, while the Super Tucano essentially made it all look easy. The result of the LAS competition was only announced recently, but, from a technical standpoint, the winner has been known for a while.

Posted by windobsession

9th Jan

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Technical Superiority p2

There is a fairly good reason for all of this. Hawker Beechcraft claims that it has spent north of $100 M trying to meet the aircraft requirements set by the USAF. Why? Because the AT-6 is a modification of the T-6 Texan II, which in turn is based on the Pilatus PC-9 of Switzerland, both training aircraft. It wasn't designed as a light attack airplane from the get-go, meaning that it was never intended to fire weapons from pylons under its wings or land on semi-prepared runways.

Posted by windobsession

9th Jan

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Technical Superiority p3

You can try to modify it all you want, but it's like taking a Honda Civic, jacking up the suspension, sticking on some mud tires and calling it an off-roader. Sure, it'll get over some rougher obstacles, but it still ain't no Wildcat.

The Super Tucano, on the other hand, was born for the job. It was designed (by Brazilian engineers, not American ones, btw) with similar mission requirements as those set for the LAS program in mind. That means that it can, for example, fire missiles from under its wings without becoming unbalanced, and land/take-off from short semi-prepared runways (something the AT-6 didn't even attempt to try in the stand-off), among others.

Posted by windobsession

9th Jan

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Technical Superiority p4

Furthermore, the Super Tucano is a battle-proven machine that could start being manufactured immediately. The AT-6 is still in a prototype phase and won't be ready for series production for another couple of years.

Posted by windobsession

9th Jan

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Technical Superiority p5

Posted by windobsession

Updated - 9th Jan

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