A Pentagon contract turns into a global dogfight
Who will build 20 air-support planes is pitting Beechcraft against Brazil's Embraer in a bitter war of words.
Should the U.S. award defense contracts to non-U.S. companies? That question has both geopolitical and economic implications, especially in a world where globalization and multinational companies are becoming the norm. Usually the shoe is on the other foot, with U.S. defense companies selling their guns, aircraft, tanks and other armaments to friendly nations around the world.
But a dispute between Beechcraft, known as Hawker Beechcraft until it emerged from bankruptcy last month, and one of its competitors -- which has an overseas partner -- is sparking some new debate on the issue.
Late last week, Beechcraft announced it was formally filing a protest with the federal Government Accountability Office regarding the U.S. Air Force's recent awarding of a contract to build its Light Air Support (LAS) aircraft to Brazil's Embraer (ERJ) and its American partner, Sierra Nevada, based in Sparks, Nev.
Beechcraft, which is based in Wichita, Kan., is pitting its AT-6 aircraft -- an attack version of its T-6 trainer -- against the Embraer/Sierra Nevada A-29 Super Tucano.
The initial contract would purchase 20 planes for use by Afghanistan's military and is reportedly worth $427 million. But the Wichita Business Journal says the LAS contract could eventually be worth $950 million.
Beechcraft CEO Bill Boisture said his company was "very perplexed" by the decision, which would reportedly jeopardize about 1,400 jobs in Kansas and other states.
"Our belief that we have the best aircraft was confirmed by the Air Force rating our aircraft 'exceptional,'" he said in a press statement, "and the fact that we are the lower cost solution was confirmed by the USAF's public award announcement."
Boisture also noted a 2012 Air Force investigation found "evidence of bias" toward Embraer and Sierra Nevada, which prompted a do-over of the competition for the LAS contract.
"We simply don’t understand how the Air Force can justify spending over 40% more -- over $125 million more -- for what we consider to be less capable aircraft," Boisture added. "The Air Force needs to make the right decision for the nation and our future allies."
Sierra Nevada and Embraer returned fire in a joint press statement saying that their A-29 Super Tucano will be built in Jacksonville, Fla., and that the LAS award will support more than 1,400 jobs. The release said Embraer will create high-tech jobs at the Jacksonville facility, "adding to the 1,200 people Embraer currently employs in the United States, and new jobs at (Sierra Nevada) will add to its U.S. workforce of 2,500 people."
"The A-29 Super Tucano is the right choice for the mission, the warfighter, the U.S. taxpayer, the American workers and our partner nations," the statement added, while calling the Beechcraft protest "unfortunate."
According to Sierra Nevada's website for the A-29, Embraer was founded by the Brazilian government in the 1960s and privatized in 1994. More than half of its stock trades on the New York Stock Exchange. Embraer currently vies with Canada's Bombardier (BDRBF) for the title of world's third-largest commercial aircraft maker, after Boeing (BA) and Europe's Airbus (EADSY).
According to the Financial Times, Embraer hopes its Tucano LAS contract will pave the way for "its more ambitious KC-390 project," a jet-engine transport Embraer is reportedly developing with cooperation from Boeing.
Sounds as if MUCH of this work will be done in the U.S. ??
Yes we have sold Military Weapondry throughout the World built here, some had their factories too.
There is always kick backs, when dealing in this Malaise..
Many of those retired military, become "Consultants" or Lobbyist for the Biz...Conflict anyone??
They are getting "huge pensions" from the Pentagon also..Indirectly maybe?
Yes Afghanistan, is very Rich in many Resources....One of the Main reasons it became a Viet-Nam for the Russians, it broke their Armies....And we supplied many weapons to their Enemy to defeat them.
Cold War anyone.?
Not mentioned was the fact that tanks costs over $900,000,bombs costs over $1 million
each,choppers cost $17 million each.The far right always says we can afford this but
schools,SS,medicare, well,we can`t afford that.
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[BRIEFING.COM] The stock market finished an upbeat week on a mixed note. The S&P 500 added just over a point, holding its weekly gain at 1.0% while the Nasdaq lost 0.4%.
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