VZCZCXRO3655
RR RUEHRG
DE RUEHBR #0041/01 0091949
ZNY CCCCC ZZH
R 091949Z JAN 09
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC 3280
RUEKJCS/SECDEF WASHDC
INFO RUEHRG/AMCONSUL RECIFE 8907
RUEHRI/AMCONSUL RIO DE JANEIRO 7090
RUEHSO/AMCONSUL SAO PAULO 3332
RHEHNSC/NSC WASHDC
RUEKJCS/JOINT STAFF WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RHMFISS/CDR USSOUTHCOM MIAMI FL

C O N F I D E N T I A L SECTION 01 OF 03 BRASILIA 000041 
 
SIPDIS 
 
STATE FOR WHA AND PM, DEFENSE FOR DEPSECDEF, USDP, USD AT&L 
 
E.O. 12958: DECL: 01/08/2019 
TAGS: PREL ETTC MARR BR
SUBJECT: THE FX2 COMPETITION -- THE GLIDEPATH TO SUCCESS 
 
REF: A. 08 BRASILIA 1589 
     ¶B. 08 BRASILIA 1373 AND PREVIOUS 
     ¶C. BRASILIA 34 
 
Classified By: Ambassador Clifford Sobel.  Reason 1.5 (D) 
 
¶1.  (C)  SUMMARY.  The Boeing F18 Super Hornet has had 
success in establishing itself as a strong candidate to be 
Brazil's next generation fighter but still faces strong 
political opposition.  To succeed, the USG and Boeing will 
need a coordinated strategy aimed at highlighting the Super 
Hornet's advantages, correcting misinformation and building 
confidence in the USG's support for the purchase.  Ideally, 
this will involve ongoing outreach from the USG at high 
levels to the key Brazilian decision makers. See Paragraph 9 
for specific recommendations.  END SUMMARY. 
 
¶2.  (C)  As reported in ref a, the Boeing F18 Super Hornet 
has become a serious option in Brazil's fighter competition, 
and is acknowledged by contacts in the Brazilian Air Force as 
offering the best plane for a competitive price.  Although 
these factors will continue to weigh in Boeing's favor, the 
Super Hornet cannot at this point be considered the favorite 
in the competition.  There continues to be a strong 
preconception among many in policy circles that a purchase 
from France would be in Brazil's best interest, a view 
strengthened by the recent, well-publicized visit of 
President Sarkozy to Rio.  Even though Sarkozy did not add 
any new substance to the "strategic partnership" (deals to 
sell helicopters and submarines were already well-known), the 
optic of the Presidential visit has worked in Dassault's 
favor. 
 
¶3.  (SBU)  In the last week, there has been new focus in the 
Brazilian press on the fighter purchase, including some 
positive statements from Boeing officials and accurate 
reporting that the Rafale's high price and limited 
capabilities have caused it to lose every foreign sale for 
which it has thus far competed.  French representatives have 
tried to spin the Rafale's dismal performance in the global 
market to be the result USG political pressure rather than 
the aircraft's shortcomings.  The continuing challenge for 
Boeing in press reporting is the ongoing assumption that 
there is a risk to choosing the Super Hornet that the USG 
will exercise some sort of "veto" over the sale at a later 
date. 
 
ELEMENTS OF A SUCCESSFUL BID 
---------------------------- 
¶4.  (C)  As noted in reftels, the FX2 decision will not be 
based on the capabilities of the aircraft selected and will 
only be marginally influenced by the price.  Brazilian 
decision makers will be looking at the offers of the 
competitors to determine which will benefit Brazil, 
particularly Brazilian defense industry.  Boeing, with its 
worldwide business and access to commercial aircraft 
production will have an attractive offer, but faces a 
challenge.  Both Dassault and Saab are offering essentially 
new planes, not yet in production.  They are therefore able 
to offer Brazil whatever role it wants in the fabrication of 
the planes, not just the final assembly that Boeing will 
offer. 
 
¶5.  (C)  Ref b highlighted the critical importance of 
technology transfer.  With current efforts in Washington to 
approve technology sharing to the fullest extent possible, we 
expect Boeing will have a strong offer by the Feb. 2 deadline 
to respond to the Request for Proposal (RFP). It will be 
vital, before the final response goes forward, to ensure that 
it meets all Brazilian requirements.  As noted in ref b, it 
will be critical for the Boeing offer to keep open the 
possibility of integrating Brazilian made weapons on the F18 
at some point.  Given the huge emphasis the new National 
Defense Strategy places on support to Brazilian industry, 
excluding any opportunity for indigenous products to be used 
would be a major blow to Boeing's chances. 
 
¶6.  (C)  It will be as important as approving the tech 
transfer itself to overcome the assumption that the USG can 
step in at a later date to restrict the transfer.  While we 
can explain that we stopped transfer of F16s to Venezuela 
because of setbacks in democratic governance and interference 
in the security of neighboring states -- circumstances 
 
BRASILIA 00000041  002 OF 003 
 
 
unthinkable in the Brazilian context -- the Brazilians tend 
to take the fact that we stopped the transfer as evidence 
that the United States is an unreliable supplier.  To combat 
this assumption will require ongoing high level USG 
assurances, both directly to the Brazilian leadership and 
publicly, that we can foresee no circumstance in which we 
would restrict the transfer of fighters to Brazil.  As the 
State Department is perceived by Brazilians as the most 
likely source of a potential veto, it will be critical for 
high level Department involvement in this effort. 
 
¶7.  (C)  In ref b, post reported on the Brazilian Air Force's 
likely requirements for financing of the new fighters.  With 
the USG's long experience in Foreign Military sales, it 
should be possible to work out a set of financing 
arrangements that would offer an advantage over the 
competition, especially since Boeing believes its aircraft 
will have the lowest life cycle costs. 
 
KEY PLAYERS 
----------- 
¶8.  (C)  The strongest supporters of the Super Hornet are 
likely to be the military leadership, in particular Brazilian 
Air Force chief Brig. Junito Saito, who we believe perceive 
the Boeing offer as the best deal on the best aircraft and 
see the United States military as the better choice of a 
partner going forward.  We may also be able to garner support 
from Brazilian industry, including Embraer, if Boeing can 
offer strong prospects for longer-term cooperation and mutual 
profit.  While the initial review of the proposals will be 
done by the Air Force, final decisions will be made at higher 
levels of the Brazilian government.  The final decision will 
be made by President Lula, who is likely to take a more 
pragmatic view of which offer would most benefit Brazil, but 
will also be swayed by arguments regarding how the purchase 
will affect Brazil's standing as an independent global power. 
 In making a recommendation to Lula, Defense Minister Jobim 
will play the key role at the policy level.  While Jobim has 
a good relationship with the USG, he has been a strong public 
supporter of the strategic partnership with France.  Foreign 
Minister Amorim and Minister for Strategic Planning Roberto 
Mangabeira Unger will also have a say; both see a purchase 
from the U.S. as leading to an undesirable "dependency." 
Finally, presidential advisors, including Civilian Household 
Minister Dilma Rousseff and Foreign Policy Advisor Marco 
Aurelio Garcia, will likely serve as sounding boards for Lula 
as he makes a decision. 
 
RECOMMENDATIONS 
--------------- 
¶9.  (C)  As we look to the next three to four months as the 
key period in which the fighter competition may be won, there 
are several opportunities for the USG to maximize our chances: 
 
--  The key step for the USG over the next month will be to 
get the question of technology transfer right.  While the 
Brazilians will not get the keys to the proverbial candy 
store, there should be enough sweeteners in Boeing's offer to 
make the case that the Super Hornet includes the best tech. 
The offer must also address the key points raised in ref b 
(source codes, weapons integration, etc.). 
 
--  Once the RFP response is in, we should be prepared to 
raise the FX2 at every high level contact with Brazil.  There 
has been a perception that USG support is weak that needs to 
be countered.  The most effective way of doing so would be to 
have President Obama make a strong statement advocating the 
Super Hornet to President Lula at the earliest opportunity. 
The President Elect's outstanding popularity with Brazilians, 
the personal affinity that Lula has publicly expressed, and 
the high expectations for relations with the new U.S. 
Administration will ensure that his advocacy will have an 
impact. 
 
--  We should follow up the RFP response submission with 
visits from appropriate officials to reassure the Brazilian 
government of USG support for Boeing's proposal.  Ideally, 
this would begin with an interagency team (State, OSD, DTSA, 
SOUTHCOM) visit in February at Assistant Secretary level to 
try to put to rest the notion that there could be a USG veto. 
 Visits should include a public diplomacy component. 
 
--  Government to government efforts should be supplemented 
 
BRASILIA 00000041  003 OF 003 
 
 
by improved outreach to highlight the advantages of the Super 
Hornet and counter misinformation campaigns from the other 
competitors that the USG will not be a reliable partner. 
 
--  Washington agencies should be prepared to receive BRAF 
finance representatives in February to discus likely 
Brazilian requirements. 
SOBEL