Amid a dispute with Airbus (ed.), Austrian Defence Minister Hans Peter Doskozil said on Friday that the country’s 15 Eurofighter jets would be replaced early.
New fighter jets will be delivered between 2020 and 2023, and the current version of Saab’s Gripen is favoured to replace the Eurofighter.
Austria would like to strike a deal with Sweden, which via the Swedish Defence Materiel Administration, FMV, is offering 15 single-seater Gripen C, and three two-seater Gripen D jets, the version used by the Swedish Air Force.
Svenska Dagbladet (SvD) reports that Lockheed Martin’s F16 is also a potential candidate, and it is feasible that other alternatives could be in the running.
A deal will need to be struck by 2018 in order for deliveries to be made in 2020, and the Austrian government therefore intends to lease the aircraft to save time.
There is said to be broad political support in Austria to replace the Eurofighter jets, which could be significant as the country goes to the polls on 15 October.
Saab could have an advantage in that the Gripen is already used in two of Austria’s neighbouring countries, and is also being eyed by Slovakia.
After years of debate, six parties have agreed on a democracy criterion when evaluating arms sales. The new criterion will have an impact on Saab, the defence and security group, which reported sales of SKr 28.6 billion in 2016. Besides the Gripen fighter jet, one of Saab’s most important products is GlobalEye, the multi-role airborne surveillance system. Saab’s export market, which accounts for 60% of the group’s sales, is of huge importance to GlobalEye.
Douglas Lindahl, analyst at Kepler Chevreux, sees the new criterion as bad news for Saab, which has major interests in deals that could now be at risk.
Last year Saab was given the go-ahead to export GlobalEye to Saudi Arabia, which leads the intervention in Yemen, and the company views the Kingdom on the Arabian Peninsula as a growth market, according to Lindahl.
Saab does not wish to comment until it has more information, but a number of analysts DI has spoken to believe that Sweden will circumvent the rules, as it has done in the past, in order to protect its defence industry.
Meanwhile, Tommy Gustafsson-Rask, CEO of BAE Systems Hägglunds is positive to the fact that broad agreement has been reached after two years of uncertainty. Simultaenously, there is concern about the long-term impact of the criterion.
Joachim Kuylenstierna’s company Skälsö bought a submarine base on Gotland in 2004, when all the parliamentary parties agreed to scrap it. The Swedish state now wants to buy back the base and DI’s sources reveal that two prospective buyers have placed bids higher than that of the Swedish Fortifications Agency and the Armed Forces, including Russian businessman Vladimir Antonov, who was stopped from taking over Saab Automobile by Reinfeldt’s government and General Motors because of questionable business.
Liberal leader Jan Björklund is demanding that Defence Minister Peter Hultqvist acts to ensure the port does not end up in foreign hands. Hultqvist says, “I think it is correct for the authorities to request to buy the base and we are trying to push it to the point in which the Swedish state owns the base again.
After the reports financier Lars Carlström got in touch with DI. “Just spoke to Antonov, he has no knowledge about this. The seller is a compulsive liar who is spreading news, probably no other interests than the Armed Forces,” he writes in an email.
While Finland faces no immediate military threat, the country is not naïve, says Jussi Niinistö, the defence minister to business daily Dagens Industri. With military activity increasing in the Baltic region in recent years, Finland is increasing the speed with which it can mobilise its forces. The country is also planning to invest billions in new fighter jets and warships in the coming years.
Finland has sent requests for information regarding the replacement of Hornet aircraft to Britain, France, Sweden and the United States, and Saab’s Anders Garberg is doing all he can to ensure Finland selects the Gripen.
Talking to Dagens Industri, he assesses Saab’s chances of winning the tender as good; the Gripen is the most modern fighter among the competitors, it has lower operational costs and is made for Nordic conditions. Additionally, Saab hopes to win the contract by offering jobs in Finland.
The federal prosecution authority in Brazil has accused ex-president Liz Ignácio “Lula” da Silva of a number of crimes including influence trafficking, money laundering and organised crime between 2013 and 2015. The authority claims the improprieties led the Brazilian government to choose to purchase 36 JAS Gripen planes from Saab.
Accusations have also been made against Lula’s son, Luiz Cláudio Lula da Silva, and the Brazilian lobbyist Mauro Marcondes and engineer Cristina Mautoni who together own the lobbying firm M&M. Former president Lula is said to have influenced the government to the advantage of companies including Saab.
Brazilian newspaper O Globo reports that the prosecutors wrote that the lobbyists received over 2.5 million reais (around 7.5 million kronor), which was then transferred to Lula da Silva. They claim that Saab gave 1.84 million euros to M&M and write there is a great deal of evidence to support the accusation. “There is an intensive exchange of emails between employees of M&M and Lula Institute which aim to facilitate a meeting between Lula and the future Swedish prime minister Stefan Löfven.”
Saab denies participating in improprieties.
Writing DI’s debate article this morning, Lars O Grönstedt, advisor to the Nord Steam company comments on the debate in Sweden in the past week not to allow the company to use the port of Slite on Gotland as a base to store pipes for a proposed gas pipeline, Nord Stream 2.
The debate has shown that those who make the most blatant claims are those who are the least well-informed, he writes, listing the twelve claims that are being aired in the debate, including the one that the EU can decide whether the pipeline should be built or not. Grönstedt points out that such a decision is outside the EU’s sphere of influence and that permission is given by each country pursuant to the act on the continental shelf.
Furthermore, despite claims that the pipes may be fitted with signals intelligence solutions, no one has been able to say how such intelligence will be gathered. It is a well-known fact that radio signals travel at a much slower speed under water, which radically reduces the amount of data. There are far simpler methods available, if a foreign power wishes to monitor shipping in the Baltic, he points out.
Grönstedt concludes that Nord Stream should be invited to the talks the MFA and the Ministry of Defence intends to hold with the pertinent municipalities on 13 December, since the claims being made are based on “untruths”.
The government is making a serious attempt to sell the fighter jet Gripen to India, a deal that would be the largest ever in Swedish history with a value far over SKr 100 billion. The Indian government recently sent an invitation to defence group Saab to participate in the tender for fighter jets.
Next week a delegation from Sweden, including enterprise minister Mikael Damberg, travels to India, on the initiative of Marcus Wallenberg, who is leading a new Swedish-Indian business cooperation. ABB’s CEO Johan Söderström, Alfa Laval’s CEO Tom Erixon, financier Carl Bennet and Saab’s CEO Håkan Buskhe will also be part of the delegation.
Mikael Damberg comments on a possible sale of Gripen: “It would not only be the largest deal ever, it would also mean a close partnership between Sweden and India for decades to come, which of course would mean a great deal for Swedish industry and our potential to grow in the whole of Asia.”
On Wednesday munitions group Saab provided a status update for the next generation of submarines, A26, being built at Karlskrona.
Planned delivery for the submarines, which are to have a multi-mission portal in the hull for divers and underwater vehicles to enter and exit the boat, was 2022. However Saab now believes it could be earlier.
The contract is worth SKr 7.6 billion although Allan Widman (L), chair of the parliamentary committee on defence, reported defence minister Peter Hultqvist to the committee on the constitution for not releasing information about an export condition attached to the contract and criticised him for not informing them that the price could change. However Saab’s head of submarines, Gunnar Wieslander, is confident they will remain within budget.
Defence company Saab is expecting a dramatic lift if Donald Trump wins the US presidential election and frightens NATO countries into increasing their military spending. Even Hillary Clinton is clear in her election campaign that European NATO countries should contribute more.
“When you look at the countries that do not meet NATO’s target and what that is of their GDP then you can quickly see that the defence industry in Europe, and to some extent the USA, does not have the capacity to deliver in the case of sudden demand and a fast increase,” says Håkan Buskhe, CEO of Saab.
Donald Trump has said that countries that do not pay their part in NATO, two percent of GDP, cannot expect the USA’s support in the event of an attack.
The Swedish Air Force’s ageing fleet of six Hercules aircraft desperately needs an upgrade; otherwise the planes will be grounded.
However, the government has yet to make a decision. In the meantime, the Air Force is looking at new aircraft. “We need a plane for tactical transport. For example, we need to be able to move troops, defence equipment and be able to strengthen capabilities (ed.) on Gotland quickly. Since we need the new planes by around 2024, a decision needs to be made soon,” says Mats Helgesson, the Swedish Air Force Chief of Staff.
One of the most interesting alternatives comes from Embraer, Saab’s Brazilian partner.