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Brazil jets deal open again for contenders

Boeing to cut 1,100 jobs in C-17 program
New York (AFP) Jan 20, 2011 - US aerospace giant Boeing said Thursday it will cut about 1,100 jobs over the next two years as it slows production of its C-17 military transport aircraft. Boeing said it would deliver 13 C-17s in 2011, one less than the prior year, as it moves to a new annual production rate of 10. "Boeing will reduce the production program's work force by approximately 1,100 jobs through the end of 2012," the Chicago-based firm said in statement. The transition to the new production rate was announced in February 2010. The long-haul military cargo C-17, which is in its 18th year of service, can carry large equipment, supplies and troops directly to small airfields, the company says.

"The fleet continues to operate at an accelerated rate due to the recent troop surge in Afghanistan," Boeing said. "It achieved two million total flight hours in December, less than five years after it passed the one-million-flight-hour mark." The US Air Force is the biggest customer, taking 206 of the 226 C-17s delivered worldwide. Boeing's foreign military customers include Britain, Canada, Australia, United Arab Emirates and Qatar, as well as the NATO-led Strategic Airlift Capability consortium. The C-17 has also supported humanitarian and disaster-relief missions, such as providing relief to Haiti in the aftermath of a devastating hurricane a year ago. Boeing said the move to a slower production rate "will be completed this summer" and lead to the elimination of the second shift at the C-17 final assembly facility in Long Beach, California.

About 900 of the planned 1,100 job cuts were expected to be made at the Long Beach plant. The remainder of the reductions will occur in Arizona, Georgia and Missouri. "Reducing the number of C-17s we deliver every year -- and doing that with a smaller work force -- will allow us to keep the production line open beyond 2012, protect jobs, and give potential customers more time to finalize their airlift requirements," Bob Ciesla, C-17 program manager, said in the statement. Boeing said it was working to capture additional international orders for the C-17, and that India and Kuwait were expected to be the next customers. The Defense Department's proposed fiscal 2011 budget funds the shutdown of the C-17 program. Boeing shares were down 1.69 percent at $70.52 in midday New York trade.
by Staff Writers
Rio De Janeiro (UPI) Jan 19, 2011
Brazil's decision to postpone an early deal for a multibillion-dollar purchase of fighter jets for its air force reopens the Latin American country's market to competitors who were up against France's Rafale as the leading favorite.

Boeing and Sweden's Saab campaigned vigorously for their versions of advanced fighter jets joining Brazil's defense refurbishment program but early reports suggested a sales trip by French President Nicolas Sarkozy swayed Brazilian government and military opinion.

Sarkozy's claims of a deal in the pipeline were contested by Brazilian government officials. Former President Luiz Inacio Lula da Silva, who initiated the fighter jet purchase program, backtracked on comments that appeared to favor the French -- mainly on the basis of their willingness to offer a large component of technology transfers as part of a deal.

President Dilma Rousseff, who assumed office Jan. 1, remained silent on the issue for the better part of her first two weeks in office. Now her aides say the president has pushed the purchase aside and ordered a further examination of various options for Brazil.

Brazilian military strategists have interpreted the deal as a step toward developing the country's defense manufacturing capacity. Of the three potential suppliers, France offered the most expansive technology transfer deal but Brazilian aides say that isn't enough.

There are deeper concerns about the financing of the purchase and how much to borrow for an initial purchase of an initial 36 jets -- to be followed up with additions to the inventory.

Lula told reporters just before he left office that it didn't make sense for Brazil to be saddled with a debt that could take years to be repaid. He told interviewers on the government-run TV Brasil channel he "could do a deal with France, but I'm not going to."

Although there are still no clear favorites Rousseff has hinted at a shift in Brazil's foreign policy that may include a more proactive and warmer approach to the United States, analysts said.

Arrayed against Dassault's Rafale fighter jets are the Boeing Co.'s F-18 jets and Saab's Gripen NG fighter aircraft.

Military aides to the government are wary of entering a deal where Brazil's foreign policy, which favors ties with Iran and support to a Palestinian state in pre-1967 territories, lead to problems in the lines of supplies.

Critics of previous military deals with U.S. suppliers frequently cite problems experienced by Brazil and other Latin American states after defense deals that went sour over political and diplomatic disputes.

Brazil is developing a range of defense manufacturing capabilities and is already a serious competitor for U.S. and European manufacturers in executive jet, small passenger and transport aircraft markets.

Last week Rousseff queried U.S. senators visiting Brazil on issues of technology transfer that could improve Boeing's offer. Government sources interpreted the meeting as a prompt to U.S. manufacturers to try harder to satisfy Brazilian expectations on technology transfers.

The deal is likely to be worth $4 billion-$10 billion in the start-up stage. Once a supplier is in place, more orders are likely to increase the value of a total rolling contract.

The Boeing Co. says its F/A-18 Super Hornet is a combat-proven strike fighter with built-in versatility. It offers a suite of integrated and networked systems with enhanced interoperability.

Rafale has yet to sell outside France.

Saab's Gripen NG is an improvement on its JAS 39 Gripen and uses General Electric's F414G engine, itself a development of the engine deployed in Boeing's F/A-18E/F Super Hornet.

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Turbulence ahead for Indian fighter jet: analysts
New Delhi (AFP) Jan 20, 2011
India's homegrown fighter jet, the Tejas, has finally been cleared for operations but analysts say any celebration of India's entry into an elite club of military hardware producers is premature. Initial operational approval for the Tejas Light Combat Aircraft (LCA) has taken 26 years - the result of endless developmental delays, technological hiccups and massive cost overruns. First co ... read more

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