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US Spying Costs Boeing Military Jet Deal With Brazil 439

Posted by timothy
from the voting-with-your-reals dept.
An anonymous reader writes with this excerpt from a Reuters report shedding light on one consequence of increasing knowledge of the extent of U.S. government spying: "Brazil awarded a $4.5 billion contract to Saab AB on Wednesday to replace its aging fleet of fighter jets, a surprise coup for the Swedish company after news of U.S. spying on Brazilians helped derail Boeing's chances for the deal. ... The timing of the announcement, after more than a decade of off-and-on negotiations, appeared to catch the companies involved by surprise. Even Juniti Saito, Brazil's top air force commander, said on Wednesday that he only heard of the decision a day earlier in a meeting with President Dilma Rousseff. Until earlier this year, Boeing's F/A-18 Super Hornet had been considered the front runner. But revelations of spying by the U.S. National Security Agency in Brazil, including personal communication by Rousseff, led Brazil to believe it could not trust a U.S. company."
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US Spying Costs Boeing Military Jet Deal With Brazil

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  • Boohoo (Score:5, Insightful)

    by Anonymous Coward on Thursday December 19, 2013 @10:28AM (#45735599)

    Seems fair. The US government does the same to Chinese companies for the same reason.

    • In once sense... But the US people will pay again for the arrogance of the government. It is about time that the people in government start to pay as well.
      • Re: (Score:3, Insightful)

        by scarboni888 (1122993)

        I don't think you understand. There are two groups of people. Those who pay. And those who don't. And those who don't aren't about to start.

        M'kay?

      • Re:Boohoo (Score:4, Insightful)

        by q.kontinuum (676242) on Thursday December 19, 2013 @11:33AM (#45736435)
        Just imagine, USA would be a democracy, and people would elect their leaders. Then it would be fair again, right?

        For some reason I have the feeling that most Americans didn't see much of a problem in the spying on other countries. From what I read in the news, the main perceived problem was not the spying, but that they didn't filter the domestic data out. Maybe decisions like this will change the perception, and consequently maybe the foreign policy as well.

        • Re:Boohoo (Score:4, Insightful)

          by cheater512 (783349) <nick@nickstallman.net> on Thursday December 19, 2013 @05:07PM (#45740131) Homepage

          Penn and Teller's Bullshit did a really nice petition basically saying that the USA is #1 at everything.

          A depressing number of people signed it instantly without hesitation.
          *THAT* is where the problem is.

    • Re:Boohoo (Score:5, Informative)

      by macpacheco (1764378) on Thursday December 19, 2013 @03:55PM (#45739339)

      The Super Hornet was never the favorite of the Brazilian Air Force.
      Unlike other serious govts in the world, here we had the favorite of the Air Force and the favorite of the president.
      It was the favorite of the Air Force because:
          - Lower cost both procurement and operational costs (I could joke there my Brazil don't have an air force, instead it has an air farce)
          - better air to air performance (let's face it, Brazil hasn't had a single bomb dropped in a military operation since WWII, what we need is air defense, the Super Hornet excels at being a bomb truck, even US Army Hornet pilots have admitted the SH leaves something to be left desired against even a much older Mig29 in a dog fight)
          - Generation 2 AESA radar with full technology transfer
          - Full technology transfer on the aircraft itself
          - Local manufacturing of most aircraft under license
          - Prospect of a partnership in future Gripen upgrades, Embraer will be the Brazilian partner on this, they have a world class track record on military and civilian aircraft sales, which dwarfs SAAB experience with exporting aircraft
          - You see, Boeing x Embraer would never be a really good partnership, Boeing is a competitor of Embraer in many markets (my forecast is Embratel will eventually produce a 737 sized aircraft, then they would become a full fledged competitor, but even the E-jets compete with 737 despite of the size difference)
          - The only advantage the SH had was it could be used on our single aircraft carrier, that stays in port the vast majority of the time

      The espionage scandal was just a good excuse to get back to basics and do the right thing.
      Buying the SH would have been a bad economic decision anyways.
      Brazil needs cheap military hardware, no F35's for us, ever. Even the SH would be too expensive in the long run (twin engine, part costs, fuel consumption)

      Realize the Brazil is operating F-5E, Mirage 2000, subsonic AMX, all aircraft that are cheap to operate.

  • Yay! (Score:4, Insightful)

    by Anonymous Coward on Thursday December 19, 2013 @10:28AM (#45735613)

    You made the correct choice, Brazil! For more than one reason.

    • by mellon (7048)

      Yes, it's fortunate that they've gone with a country that doesn't spy on its friends. Säpo would never do anything like that. :)

      Anyway, this is more grist for the "NSA bad behavior is bad for business" argument. Sucks for the Boeing employees who miss out on this work, but it's an entirely understandable outcome.

  • About time (Score:5, Insightful)

    by toutankh (1544253) on Thursday December 19, 2013 @10:30AM (#45735637)

    It's about time something like that happened. Now if only all European countries showed the same level of responsibility, maybe the USA would learn to treat their "friends" better.

  • Plus, if I were them, I'd be worried that the USA would insert a backdoor in the avionics that allows the plane to be remote controlled by the USA.

    • by jeffmeden (135043)

      Plus, if I were them, I'd be worried that the USA would insert a backdoor in the avionics that allows the plane to be remote controlled by the USA.

      If they are procuring them with the hope of surviving any sort of even brief conflict with the US, they will be sadly disappointed no matter who they buy their jets from. A more troubling backdoor would be a listening post on each jet that scoops up data on to a drive in a secret compartment, which can then be downloaded by a CIA/NSA agent pretending to be a Boeing service tech.

      • by hawguy (1600213)

        Plus, if I were them, I'd be worried that the USA would insert a backdoor in the avionics that allows the plane to be remote controlled by the USA.

        If they are procuring them with the hope of surviving any sort of even brief conflict with the US, they will be sadly disappointed no matter who they buy their jets from. A more troubling backdoor would be a listening post on each jet that scoops up data on to a drive in a secret compartment, which can then be downloaded by a CIA/NSA agent pretending to be a Boeing service tech.

        I wouldn't expect them to get into a direct conflict with the USA, but if they were in a conflict that the USA didn't want them to be in, or if they were interfering in a covert USA operation, the USA could ground their jets or enforce a "no fly" zone purely in software.

      • by BobMcD (601576)

        "Motti: Any attack made by the Rebels against this station would be a useless gesture, no matter what technical data they've obtained. This station is now the ultimate power in the universe! I suggest we use it.

        Vader: Don't be too proud of this technological terror you've constructed. The ability to destroy a planet is insignificant next to the power of the Force."

        Sometimes it's more about resisting than conquest.

        • by hawguy (1600213)

          "Motti: Any attack made by the Rebels against this station would be a useless gesture, no matter what technical data they've obtained. This station is now the ultimate power in the universe! I suggest we use it.

          Vader: Don't be too proud of this technological terror you've constructed. The ability to destroy a planet is insignificant next to the power of the Force."

          Sometimes it's more about resisting than conquest.

          And the power of religion?

          • Not necessarily. The same could be said for the power of experience, leadership, morale, training or logistical support. The US military is neither Jedi nor Sith but they are pretty well led, trained and supported. Having the biggest guns does nothing to help you when you pull the trigger and it goes 'click' because you're out of bullets, didn't maintain it or forgot to flip the safety.
          • How many divisions has the pope?
    • Re:Remote control? (Score:5, Interesting)

      by Ogi_UnixNut (916982) on Thursday December 19, 2013 @11:01AM (#45736017) Homepage

      If that is their worry, then buying any NATO countries produce would not help them. AFAIK The SAAB Gripens use American engines, avionics and components. Apart from the airframe and the final country of assembly (and some local parts), they are not really making much a difference as far trust of the hardware goes.

      If that was the real worry, then you'd have to buy someone elses (probably Russian), but they went out of the race a while ago.

      • by Arker (91948)

        I was thinking along similar lines. The Gripen is a great aircraft, it compares very well to the competition, but we know Swedish Intelligence has been positively prostrate in terms of simply giving the NSA whatever they want and not even demanding anything in return, so I would not have any more faith in it not being compromised than I would the F18s (IIRC) they were thinking about buying from Boeing instead.

        I think this is mostly a symbolic gesture though, and it may be effective in that sense. It signals

      • Re:Remote control? (Score:5, Interesting)

        by gl4ss (559668) on Thursday December 19, 2013 @11:22AM (#45736287) Homepage Journal

        they have source to the avionics, the radar etc.

        it is normal procedure to buy it so that you as the buyer have the source, at least finland does even for the hornets(the smaller non-super) and there has been domestic modifications to the fw. certainly the swedes do for the components they buy from usa and code sharing has been a part of their negotiation tactics.

        and last time I checked, Sweden wasn't a NATO country and has no intention of being one either. norway is and that's how norway was pressured into buying f35's and not gripens(the leaked cables reveal all about it)... the 3rd country in the race was france and they are a nato country.

      • by Extremus (1043274)

        There have been recent rumours about Brazil again considering the russian PAK-FA project.

      • Saying "I don't trust US-Based stuff" could be technical, but its more likely a means to punish the US... "making sure the chickens come home to roost"

        Punishing the US which is about the ONLY THING that has any hope of real change - if big US corporations start losing deals because of the shenanigans form the NSA, they'll start throwing their weight around and the politicians will listen.

  • by rossdee (243626) on Thursday December 19, 2013 @10:33AM (#45735671)

    Maybe the Saab is a better deal anyway, their latest plane is a newer design, and more agile.

    • Re: (Score:2, Interesting)

      by CapeDoryBob (204240)

      Read the NY Times article. The SAAB is much cheaper to operate. Looking at it, I think of it as an updated Northrop F5.

      • by Brandano (1192819)
        Almost. I would place it roughly in the category of the F20 Tigershark, but with modernized avionics and greater weapon load and flexibility. It doesn't have a long range, but that only really becomes a problem when you are concerned with attack missions rather than defending your country.
    • by wcrowe (94389)

      That's a good point. I remember building a model of the YF-17 (the forerunner of the F-18) when I was in junior high... in 1975... almost 40 years ago. However much lipstick you put on the pig, you can't get around the fact that it is a pretty old design.

      • The Superhornet is largely a new airplane. It is only related to the original Hornet in name and shape.

    • by Savage-Rabbit (308260) on Thursday December 19, 2013 @10:51AM (#45735895)

      ... and easier to maintain as well. The Saab Gripen is an awesome aircraft and a good choice. On the other hand the Gripens do still have lots of US parts in them so it's not as if US companies don't stand to gain, they'll just gain less. Theoretically the USA can even veto the sale because of the US parts in the Gripen if they want to be really petty about this and piss the Brazilians off even more. The most delicious part of this development (from the point of view of Airbus, EADS, Sukhoi, Dassault et al) is that Boeing, a long time beneficiary of US government sponsored industrial espionage, has been hosted by it's own petard for a change.

  • Aircraft facts (Score:5, Informative)

    by Anonymous Coward on Thursday December 19, 2013 @10:54AM (#45735927)

    Just for info : they have decided for the better plane.
    The JAS SuperGrippen (Grippen NG) has a much larger ferry and combat range (twice as much as the F/A18), is a lot faster (Mach 2.2, even faster than the F35), more agile AND cheaper both in initial costs and per flight hour. It's comparable to the Eurofighter. Except that the JAS 39 NG has the much better radar.
    It has a bit lower weapon payload, though (5.3 metric ton (JAS39) vs 6 metric ton (F/A18)). But for the cost of one american plane, you can buy two JAS39 and thus have air superiority.

    • Re:Aircraft facts (Score:4, Interesting)

      by Optimal Cynic (2886377) on Thursday December 19, 2013 @11:11AM (#45736145)

      It's comparable to the Eurofighter. Except that the JAS 39 NG has the much better radar.

      It's in no way comparable to the Eurofighter. The JAS aircraft actually works, it's not a political football, it's not a vast waste of scarce defence money and it is fit for purpose. The Eurofighter fits none of those criteria.

    • Just for info : they have decided for the better plane.

      You forget the Rafale which is by far superior to the Gripen.

      See Switzerland: they also have chosen the Gripen for political and price reason, even if it doesn't meet the military requirements!

      End of page 2 [newsnetz.ch]:

      The Gripen has been rated unsatisfactory in the accomplishment for Air-to-Air and Strike missions.
      The Gripen obtained the 3rd rank in the evaluation of the effectiveness.
      Based on flight test results, the Rafale is the candidate which fulfil all Swiss Air Force requirements and ended with the best score recommended as new fighter for the Swiss Air Force.

      • by Shinobi (19308) on Thursday December 19, 2013 @11:40AM (#45736549)

        Ah yes, that report, written by Dassault themselves, even in the face of Gripen curbstomping Rafale in red flag excercises, and Gripen proving that it was better at strike missions in Libya.

        Basically, Dassault has such a foothold in the Swiss Air Force that they can write the requirements and testing specs to favour Dassault. It's like trying to sell Gripen or Typhoon to the US or Russian Air Forces.....

        • by advid.net (595837)

          [...], and Gripen proving that it was better at strike missions in Libya.

          Err... no.

          In Libya the Gripen has only been used for recognition, not for strike.

          Why ? Political choice, so they do not risk to kill civilians, and here [expressen.se] Carl Bildt said the Gripen was not suitable for strike (which is BS, but an excuse for not to strike).

          About Dassault writing the report, I'm interested in anything backing this idea (fact,quotes,...). To me it doesn't look like so.

          • by Shinobi (19308) on Thursday December 19, 2013 @01:38PM (#45737871)

            The official mission was recon, but their RoE didn't preclude strikes, if there was a pressing need.

            2 times, 39's simultaneously engaged and destroyed multiple ground targets, and at least 3 other times they provided the target data to Rafale's(Too bad 39's have to run with reduced datalink capacity to interface with NATO planes, including the Rafale)

            As for Dassault involvement, they are issuing bearer bonds to Swiss politicians, Dassault "consultants" are working as personal advisors to at least 3 defense ministry officials, and are also suspects in the brewing indian bribery scandal regarding the Rafale procurement. Keep in mind, SAAB and the Swedish government have sidestepped BAE for the Swiss procurement, because BAE is too corrupt, and Dassault has an operational record just as dirty as that of BAE, Boeing and Lockheed-Martin, with the belgian scandal being just one of them.

            When general Gygax made a revised statement of operational capacity after 2010, when Gripen NG showed off the planned abilities, there was an immediate lobbying blitz and further bearer bonds thrown in the direction of parliament and defense ministry.

            In fact, Dassault are still pushing the 2006-2008 evaluations to the swiss parliament, completely ignoring the post-2010 evaluations. They even willfully broke the rules of the tender by attempting to renegotiate after the bidding timeframe was closed.

  • by heson (915298) on Thursday December 19, 2013 @10:58AM (#45735963) Journal
    NSA has been good to US companies in the past, sometimes it fails. http://en.wikipedia.org/wiki/ECHELON#Examples_of_industrial_espionage [wikipedia.org]
  • by tekrat (242117) on Thursday December 19, 2013 @11:01AM (#45736007) Homepage Journal

    The USA will eventually find itself alone, and without allies. And it's not just the spying, it's the drone attacks on soil with countries we are not at war with. Recently we blew up a wedding party in Yemen, killing over 13 which I'm sure included women and children. But oh no, we're not evil. We're the good guys. Uh huh.

    Little by little, we are making enemies of the world, and until we change our ways, less and les of the world is going to want to do business with us because we have shown we're not trustworthy.

    And to the poster who blames a 4.5 billion dollar loss on the economy to Ed Snowden, screw you. All Snowden did was CONFIRM what everyone knew already, but just couldn't prove. He will be shown to be a hero, this decade's Cindy Sheehan.

    We are in the wrong, but people who wrap themselves in the flag are unwilling to admit it. And until we learn to act a little more humble, we're going to see more of this. We're making the typical over-exaggerated gestures of a failed empire. And as things get worse here, we're trying to take the rest of the world down with us.

  • I remember my first comment about this sort of thing on here so long ago. I said it would affect US business and many people said it was impossible that US industries and technologies were too entrenched. Amazing. I almost wish I was wrong. But we can add one more large business to the list of businesses lobbying to stop the NSA. I hope they act quickly enough.

  • by Anonymous Coward on Thursday December 19, 2013 @11:03AM (#45736033)

    This is not just a response to the NSA leaks. Everyone spies, we all know that.

    The problem is American exceptionalism. No, not because we think that (every nation does), but because we can't shut up about it. The image we project is of spoiled kids, arrogant and rotten to the core. We shove our defensiveness in everyone's faces, and that makes America a very bad salesperson. We are the tight-ass at Macy's who thinks his feces doesn't stink, and won't even pay you any attention because you have the wrong shoes. No on wants to deal with that.

    This isn't about who has the best warplanes. This is diplomacy. This is business. This is about saving face and national egos. It's about time we learned a little finesse in this area. It's something the Chinese do exceptionally well.

  • by Sir_Eptishous (873977) on Thursday December 19, 2013 @11:12AM (#45736157) Homepage

    "The NSA problem ruined it for the Americans," a Brazilian government source said on condition of anonymity.

    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.

    "Was that worth 4 billion dollars?" the source asked.

  • Political theater (Score:3, Informative)

    by argStyopa (232550) on Thursday December 19, 2013 @11:21AM (#45736275) Journal

    The fact that the military didn't even know about this snap-decision (after TEN YEARS of "on again, off again" negotiations) shows that Dilma Rousseff is simply stomping her little feet angrily at the US. The US/Brazil relationship has always been touchy - Brazil is hypersensitive, and the US *was* overbearing and arrogant.

    Ms Rousseff is either acting or stupid. Let's be absolutely candid: Brazil is NOT a first-world country. I would imagine that *any* first-world security agency that has wanted to spy on Brazil HAS been spying on Brazil. Frankly, the only people not spying on Brazil would be anyone who doesn't give a shit about Brazil, and for Ms Rousseff (or anyone with a brain) to not recognize that is simply ignorant or in denial.

    She has public constituencies to salve, and is merely making political capital out of the always-useful-bogeyman, the US. That they decided on SAAB in such a snap decision suggests to me, in fact, that they'd qualified either vendor to their own standards, and were just waiting for the bribes/'compensations' to rise to the level that finally justified selecting one vendor or the other.

    • by Charliemopps (1157495) on Thursday December 19, 2013 @11:44AM (#45736589)

      A "First world" country is a country that was allied with either the U.S. or the U.S.S.R. during the cold world. You were "one of the 2" on one side or the other. The term "third world" came about as a way to refer to those countries unaligned in the conflict. They tended to be poor with little strategic influence and were ignored by the 2 super powers.

      Being 3rd world is not a bad thing. It just means you didn't take sides in a war that never happened and has been over for decades. Rousseff has every right to be angry with the US. What the NSA is doing is criminal. We're currently the most powerful country the world has ever known. We have a military that could kill every human being with the flip of the switch. There is not threat to our sovereignty and there's no need for this ridiculous invasion of every person on earths right to privacy.

    • Re:Political theater (Score:5, Interesting)

      by Henriok (6762) on Thursday December 19, 2013 @12:13PM (#45736937)

      The fact that the military didn't even know about this snap-decision

      The decision might seem sudden but Brasil have already chose Gripen in several occasions during the last 10 years. Those decisions have been interrupted by sudden economic downturn, and corruption, political instability and other stuff. Gripen seems to have been favored by the Brasilian military and Industry all these years though, and since all competitors are eliminated du to various reasons (technical, political, corruption, cost), there was no reason not to take the decision now.

    • The FAB (Brazilian air force) always wanted the Gripen. It was not a snap decision; it was the government finally realising it is better to be a junior partner than a minor customer.

  • by Voice of satan (1553177) on Thursday December 19, 2013 @11:34AM (#45736455)

    SAAB has made many concessions over the transfer of technology. I wonder how it will work out. Plus they propose to "make" them in Brazil. I wonder how much it will cost them since embraer has to outsource the assembly of many of their planes in Europe to be cost efficient.

    The Gripen has many parts which are originated from the USA. The volvo engine used by current Gripens is a modified general electrics one. No small part of their electronics is American too. Besides, the Gripen NG now exists only on paper. It has short range and carry little ordinance. Best contender wasn't the F18 but the Dassault Rafale. Except in the US press of course. The French were ready to make a technology tranfer the americans would have never accepted, with good reasons. The Brazilians and the French already cooperate closely on Brazil's future nuclear submarines and that was supposed to seal a military alliance between the two countries. Sarkozy had even agreed to buy some Brazilian tranports France doesn't need to sweeten the deal.

    And everyone who is even slightly interested in defense matters know the everyone which has the means spy on everyone. The Brazilian military knew this like the others Snowden or no Snowden.

    The ones who rage and are really surprised now are the French, no the US.

  • by Anonymous Coward on Thursday December 19, 2013 @11:47AM (#45736629)

    US Spying Costs Boeing a Brazilian Dollars

  • by rvw (755107) on Thursday December 19, 2013 @11:56AM (#45736747)

    Think about this - will the US build in a kill switch into those planes? They can control drones on the other side of the world, why not a fighter plane? Can we trust that those planes don't communicate with a US base and let them know where it is, what's being said and done inside?

  • Boeing Decisions (Score:5, Interesting)

    by PPH (736903) on Thursday December 19, 2013 @12:25PM (#45737073)

    This might change some of Boeing's thinking with regard to relocating their commercial operations. Back when I worked there (before McDonald Douglas took over), Boeing Commercial Aircraft was largely a stand alone enterprise. In fact, there was some talk about spinning off the military and aerospace divisions. That changed after the merger and some of the recent reorganizations have combined commercial and military aircraft engineering groups.

    But if the rest of the world perceives Boeing as being a tool of the USA's political/military complex, they might want to reconsider tainting their successful commercial jet business with that reputation. The F/A-18 deal is lost. But the company will really be up a creek if they start losing commercial sales as well.

When the weight of the paperwork equals the weight of the plane, the plane will fly. -- Donald Douglas

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