Brazil's Embraer awarded $355 million U.S. Air Force contract

Embraer beat out U.S.-based Hawker Beechcraft for the $355 million contract and will produce 20 Super Tucano aircraft for the U.S. Air Force.

In a major victory for Brazil-U.S. commercial relations, Brazil's Embraer won a contract to build counterinsurgency aircraft for the U.S. Air Force. Beating out U.S.-based Hawker Beechcraft, Embraer will provide America with 20 A-29 Super Tucano light attack aircraft, as well as support services for missions, as part of the $355 million deal.

The aircraft will be built in Florida, together with U.S. tech company Sierra Nevada. The project is slated to use more than 70 U.S.-based suppliers and create 1,200 American jobs.

While Embraer planes already enjoy a significant presence in the U.S. commercial market, this deal bolsters its credentials in the defense sector, which now makes up roughly 15 percent of its revenue.

Politically, the deal is a success for Brazilian President Dilma Rousseff, who has been trying to strengthen US-Brazilian relations following a recent rift over Iran's nuclear program. Some Latin American countries already use Embraer's Super Tucano in their air forces, but this deal with the U.S. Air Force could ease the company's dealings with other governments as well.

The deal also appears to have assuaged fears regarding allegations of corruption in the Brazilian company.

But not everyone is happy. Hawker Beechcraft, partially owned by Goldman Sachs, filed suit with the Court of Federal Claims, saying that it had been excluded from the bidding for the contract.

Photo: Embraer

via [Financial Times]

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