Freedom Line Blog

Americans might expect the U.S. government to demonstrate greater concern about who supplies resources and equipment to our men and women in uniform.  This week, however, the Obama Administration announced its decision to award a much-disputed, high-stakes Air Force light air support (LAS) contract to a Brazilian company over one based in Kansas.

The LAS contract could be worth over $950 million, so we’re irrationally sending nearly a billion American taxpayer dollars to Brazil despite the weak state of our manufacturing sector and economy more broadly.  But this is about more than the initial 20 aircraft, or the money associated with building them.  Americans should also be troubled that Embraer receives tremendous subsidies from the Brazilian government, which has been very vocal in its opposition to the War on Terror and American interests while siding with Iran and Venezuela time and again.  As one of the few nations that continues to work with the Iranian regime, Brazil and Embraer have already supplied aircraft similar to their LAS offering to Iran’s Revolutionary Guard.

Perhaps even more alarming, a provision woven into Embraer’s bylaws would enable the Brazilian government to halt the manufacturing or maintenance of the warplane at any given time, with no threat of repercussions from the U.S.  This could mean anything from withholding parts to complete cessation of production.  For a country so outspoken in its opposition to America’s global foreign policy objectives and our stance against governments that commit such grotesque crimes against their own citizens as well as other nations, how can we trust that they won’t disrupt the delivery of these aircraft in pursuit of their own political motives?

The Obama Administration’s decision to outsource the production of American military equipment to Brazil is not only illogical, it creates an unconscionable threat to our national security.  Embraer and Brazil have publically stated that their immense focus on this contract is motivated by their desire to secure a U.S. Air Force endorsement of their product, which in turn allows them to more effectively market it to other nations.  If history tells us anything, Embraer and the Brazilian government that controls it will have no qualms about selling our enemies the same aircraft they will be providing to our Air Force.

It is morally and economically untenable that United States government would prefer a Brazilian supplier that is publicly opposed to the very cause for which we need the equipment.  Awarding this contract to a historically unfriendly foreign sovereign suggests that the Obama Administration is not only careless in its foreign policy judgment, it’s reckless in the equipment it selects to carry out the mission.

I can only say that the Air Force senior acquisition executive, David Van Buren, is not satisfied with the quality of the documentation supporting the award decision.”

That was U.S. Air Force Secretary Michael Donley yesterday, regarding the USAF decision to vacate a $353 million attack aircraft contract awarded late last year to Brazilian manufacturer Embraer, and to investigate the process by which the contract was awarded.

We at CFIF monitored and criticized that process and voiced our concerns directly to former Defense Secretary Robert Gates. 

By way of background, two defense companies competed for the contract to provide military aircraft to Afghanistan:  Hawker Beechcraft of Wichita, Kansas, and Brazil’s Embraer.  Disturbingly, Embraer receives subsidies from the Brazilian government, which has publicly opposed the War on Terror and American efforts against Iran and Venezuela, but nevertheless shamelessly sought to profit from U.S. foreign policy.  Additionally, a provision within the potential Embraer contract known as the “Golden Share” clause would allow the Brazilian government to shut down the operation at any time during the production or maintenance of the aircraft.  Alarmingly, the United States would possess no recourse in the matter. 

Hawker Beechcraft would sustain an estimated 1,400 domestic jobs, whereas Brazil’s Embraer would offer only 50 final domestic assembly positions.  Moreover, the Hawker Beechcraft AT-6 is based upon an aircraft already in wide use by the U.S. Air Force, the U.S. Navy, the North American Treaty Organization (NATO) and other American allies.  Consequently, that familiarity and logistical infrastructure advantage would allow for substantial cost savings over the new aircraft’s life cycle.  This is particularly important at a time when the Defense Department seeks cost control measures.

Although this situation remains unresolved, the USAF decision to overrule and investigate the dubious award to Embraer is a very encouraging step in the right direction.

A troubling trend seems to be emerging in the defense industry—outsourcing national security to foreign companies.

We recently learned that two defense companies are competing for a proposed American attack aircraft contract: Hawker Beechcraft of Wichita, Kansas, and a Brazilian company named Embraer.  One particularly disturbing fact is that Embraer receives subsidies from the Brazilian government, which has publicly opposed the War on Terror and American efforts against Iran and Venezuela, but now seeks to profit from that same U.S. commitment to military strength.  Another troubling item is an unconventional clause in the potential Embraer contract known as the “Golden Share” clause.  Under that provision, the Brazilian government would be empowered to shut down the operation at any time during the production or maintenance of the aircraft.  Alarmingly, the United States would have no means for recourse on the matter.  That’s not very “golden” for American interests.

Additionally, awarding the contract to Hawker Beechcraft would sustain an estimated 1,400 domestic jobs, whereas Brazil’s Embraer would offer only 50 final assembly positions.  Moreover, the Hawker Beechcraft AT-6 is based upon an aircraft already in wide use by the U.S. Air Force, the U.S. Navy, the North American Treaty Organization (NATO) and other American allies.  Consequently, that familiarity and logistical infrastructure advantage would allow for substantial cost savings over the new aircraft’s life cycle.  This is particularly important at a time when the Defense Department seeks cost control measures.

For these reasons, CFIF has written Defense Secretary Robert Gates, urging him to carefully consider these issues.

Americans just witnessed a similar episode between Boeing and foreign company EADS, and outsourcing defense to foreign companies is simply bad policy.  America cannot afford to jeopardize domestic jobs or our national security.