Gripen Company Summary - WikiLeaks



Gripen Company Summary

One paragraph summary:

Military aeronautics sales account for 9,183 million Swedish Kroners (about 1.3 billion dollars), or about 38% of Saab’s total business, and Gripen fighters are the core of this. Gripen has sold a total of about 50 aircraft overseas since it started production in the mid 90’s. The company has made a big push for large sales in Brazil and India, and without one or both of these contracts coming through it seems unlikely that Gripen will continue as a major player past 2012. The Gripen NG is the newest model and has yet to find a buyer. The JSF and Eurofighter have too much of the market claimed between them, and the natural clients for the Gripen fighters, second-tier powers looking to upgrade their air capabilities, are mostly facing financial constraints. When Norway and the Netherlands chose the JSF in the last year it was a big blow to Gripen. The following Bloomberg article is an excellent summary of their problems:

Longer summary:

The Gripen fighter is used by the following governments: Sweden (204 aircraft), South Africa (26), Hungary (14), Czech Republic (14), and Thailand (6). They are seeking sales in India, Brazil, Romania, Denmark, and Switzerland.

Sweden ordered the first Gripen fighters in 1983, with its first fighter produced in 1993. They were originally developed to provide fighters for Sweden.

The Gripen NG is their newest fighter and the company has been aggressive in trying to sell it overseas. However, to this point it has lost out to the JSF in a number of cases. The Netherlands and Norway both contributed funding to the JSF, and elected to go with that fighter.

Gripen is making a major push for India’s large fighter purchase. They have a modified version of the Gripen NG, the Gripen IN, which is designed especially for India. It will produce the majority of the fighters in India, allowing India to eventually export their version of the Gripen.

Price (about $40 million a plane), and technology transfers tend to be major selling points.

Countries that are considering the purchase of Gripen fighters:

Brazil: Pending a decision is between Gripen, Dassalt, and the F18.

Croatia: Is considering buying 12 new fighters to upgrade its aging fleet. Budget problems make this unlikely.

Denmark: Is considering replacing its F-16s with Gripens, decision expected by the end of the year.

Romania: Company says it has bids out to Romania.

Switzerland: The Gripen is a contender to upgrade the Swiss airforce.

The overall problem for Gripen seems to be that it cannot compete effectively with the JSF in terms of technology. While it is much less expensive, this has been less of an asset than expected since many countries that are worried about price have had to hold off purchases altogether as their economies and budgets have shrank. Eastern European countries were interested in the Gripen, but their budgets have been hit hard in recent years and a large aircraft purchase looks unlikely.

Gripen executives have stated that they expect to sell 700 fighters in the coming decade. Deals with India or Brazil will be essential if this is to happen.

Gripen is facing serious problems if new orders are not forthcoming in the next 2-3 years. A Bloomberg article states that:

Saab AB, the Swedish maker of the $40 million Gripen jet fighter, may fail to win enough orders to guarantee the plane’s future as the build rate slows and parts- makers halt production.

Norway dealt Saab a blow in November with a contract for 48 Lockheed Martin Corp. Joint Strike Fighters after analysts predicted the Gripen would win. The Netherlands selected the JSF as the best candidate to replace 85 older aircraft a month later, and Denmark may also pick the U.S. plane this year.

Work on Gripens for South Africa and Thailand runs out in 2012 and only 26 deliveries remain, pushing output down to 10-12 aircraft a year from about 15 previously. Linkoeping-based Saab is holding out for orders from India and Brazil to rescue the flagship product of an aeronautics unit that contributes 20 percent of sales. Suppliers including Volvo Aero, maker of the plane’s RM12 engine, are already winding down production.

“After South Africa we have no more orders and that’s a fact,” said Fredrik Fryklund, a spokesman for the Volvo AB unit, which gets 7 percent of its revenue from work on the Gripen. “Next year some time we’ll probably deliver the last engine. Maybe another country will like our Gripen with the RM12. Otherwise, the production line will be closed.”

Sources:



Gripen - New Generation with over 120,000 hours in service

Gripen is the first of the new generation, multi-role combat aircraft to enter service. Using the latest available technology it is capable of performing an extensive range of air-to-air and air-to-surface operational missions and employs the latest weapons.

Gripen is designed to meet the demands of current and future threats, while at the same time meeting strict requirements for flight safety, reliability, training efficiency and low operating costs.

In service

Gripen is in service with the Swedish, Czech Republic, Hungarian and South African Air Forces and has also been ordered by Thailand. The UK Empire Test Pilots’ School (ETPS) is also operating Gripen as its advanced fast jet platform for test pilots worldwide.

* Gripen was declared operational in the Swedish Air Force in 1997, and 204 aircraft, including 28 two seaters, have been delivered.

* Gripen is in full operational service with the Czech Republic Air Force, which has taken delivery of all of its 14 aircraft (12 single-seat and 2 two-seaters) to meet its national, European and NATO defence needs.

* Gripen is also in full operational service with the Hungarian Air Force, which has taken delivery of all of its 14 aircraft (12 single-seat and 2 two-seaters) to meet its national, European and NATO needs.

* South Africa, Gripen’s first export customer, has ordered a fleet of 26 aircraft (9 two-seat and 17 single seat aircraft) to replace its existing front-line aircraft. Deliveries started in 2008 and will be completed by 2012.

* The United Kingdom’s (UK) Empire Test Pilots’ School (ETPS) is also operating Gripen as its advanced fast jet platform for test pilots worldwide.

* In October 2007, the government of Thailand approved the procurement of Gripen fighters to replace the Royal Thai Air Force’s ageing F-5 fleet, and in February 2008 Thailand and Sweden signed contracts for the supply of the initial six Gripen aircraft for the Royal Thai Air Force (RTAF) with aircraft delivered during 2011.

Binding tenders around the world

Saab is actively marketing Gripen around the world. As of early 2009, there are binding Gripen tenders for Denmark, India, Romania, Brazil and Switzerland. In addition, Saab has responded to requests for information from Bulgaria, Croatia, and the Netherlands.



April 1983

The Swedish Parliament approves the government’s order for the first batch of 30 Gripen aircraft.

June 1993

The first production aircraft (39.102) is delivered to FMV on 8 June.



Gripen NG Features

* Netcentric Fighter - A truly Network connected next generation multi-role fighter with the world’s most highly developed secure

and multi-frequency data link.

* Superior Sensor Fusion – Latest generation avionic mission system with high computation power operating on ultra fast digital data bus highways.

* Smart Digital Cockpit - An advanced fully digital cockpit layout with large colour, Multi-Functional Displays (MFD) and Hands-On-Throttle-And-Stick (HOTAS) provides the pilot with a superior situation awareness.

* First to know - first to act - A combination of low radar, IR and visual signatures, along with a state-of-the-art AESA radar, an Infra Red Search and Track (IRST) sensor and superior sensor fusion, including world leading new generation weapons integration, ensure a high hit ratio in any engagement.

* Outstanding Agility - The world’s most agile fighter for close combat. A combination of advanced aerodynamic layout, utilizing

a combined close-coupled canard – delta configuration and a triplex, digital Fly-By-Wire Flight Control System (FCS). A winning Dog-Fight capability in combination with the latest generation high off-bore sight missiles and Helmet Mounted Display (HMD).

* High Operational Tempo - Gripen’s high operational availability, rapid turnaround and minimal support requirements enables

sustained high sortie rates providing Commanders the ability to meet the most demanding operations with minimum resources.

* Affordability - Gripen NG achieves the lowest operating cost of any modern fighter. This is accomplished by combining advanced system design and modern commercial off the shelf (COTS) components with the highly reliable and powerful General Electric F414G engine.

* Future development - The Gripen is built to be adaptable to changing threats and operational requirements that a modern Air Force faces.



Gripen NG for India

Gripen IN is the most technologically advanced fighter aircraft in the world. Gripen IN is equipped with futuristic warfare technologies developed specifically for India and will be the first of the new generation, multi-role combat aircraft to enter service.

Image: Photo Katsuhiko Tokunaga.

The Gripen IN in short:

* A powerful and proven engine

* AESA radar

* Advanced Communication systems

* Tactical Data Link

Supercruise

* Advanced Electronic warfare

* Strategic reach

* Advanced Weapons Capacity

* Customer-specific weapons

Gripen IN – The independent choice:

* The world’s most technologically advanced multi-role fighter aircraft with futuristic warfare technologies developed specifically for India

* Meets or exceeds all defined operational requirement raised by the IAF in all roles

* Provides exceptional autonomous multi role capability in normal and hostile FOB operations, and acts as the perfect force multiplier

* Has substantially lower real Life Cycle Cost than it’s nearest competitor

* The only option that will fundamentally shift India’s defence technology prowess to one that is able to realise its ambition of being an independent global player

* In combination with the Industrial Cooperation program, Gripen’s program for IAF, Indian Defence and industrial establishment will make India by 2020 completely independent of the need to purchase combat aircraft from other countries and make it an exporter of aircraft like Sweden

Image: Photo by Svarteld.

Strategic leverage

Gripen is the only option that will fundamentally shift India’s defence technology prowess to one that is able to realise its ambition of being an independent global player.

Achieved through:

* Transfer of technology: all aspects of the product life cycle

* Industrial cooperation programme: covering key technologies

* Partnership around future generation fighter aircraft

In combination with the above, Gripen’s program for IAF, Indian Defence and industrial establishment will make India by 2020 completely independent of the need to purchase combat aircraft from other countries and make it an exporter of aircraft like Sweden.

Image: Photo Per Kustvik, Condesign.

Operational dominance

Given India’s large airspace boundaries and its potential threats requires an air

defence and air combat fleet that will give it operational dominance along its borders with five countries and a 7,500 plus kilometres coastline over the next four decades. The aircraft it requires should be able to deliver not only air power and air combat superiority but also logistical, multi-role and versatility in weapons and systems integration.

Strategic Reach:

* Forward Operating bases

* Ground Support Equipment

* Rapid turnaround with minimal personnel

* More time in the air

* Supercruise

* Superior situational awareness

* Advanced weapons & sensors, more aircraft per dollar

Defining the future

At delivery, Gripen IN will be the only aircraft that will be state of the art in technology and superior to other aircraft and the only one being modern at end of delivery.

Performance:

* Highly agile

* Multi-role capability

* Highly effective in all roles

* Supercruise

* Strategic reach

* Netcentric capability

* Carefree manoeuvring

* Advanced data link

* Extensive electronic warfaresystem

Unbeatable life cycle cost (LCC)

Gripen will, over life, cost the Indian Government very significantly less than its nearest competitor.

* Low LCC is one of the fundamental design criteria

* Single engine

* High MTBF

* Low MTTR

* Selfdiagnosis

* Minimum of recourses like GSE training and personal

* On condition maintenance

Image: Photo Frans Dely.

A smooth transition into operational service for IAF

- Deliveries from 2013: Initial deliveries time phased in accordance with operational requirements

- Perfect match with the SU-30 MKI and a true force multiplier using Tactical Data Link

- Experience of fleet transitions for Czech and Hungarian MIG-21 fleets

- Minimum logistics footprint

- Optimized training solution

- computerized training aids

- embedded training functions

- Customer adapted maintenance solution

Transfer of Technology (TOT)

* Saab is willing and able to provide ToT, that exceeds the requirements, to the Indian Government

* The level of ToT will enable India to manage all aspects of the life cycle including design

* Access to all levels of technology

* Saab is willing to enter a joint venture with Indian Aerospace Industry

with the aim to develop the next generation of fighters (MCA)

Genuine industrial co-operation in high technology areas

* India will be a key development and manufacturing hub for Saab and play a major role in development, production and support of future development programs.

* Saab / Gripen International Industrial Network will provide substantial and

long-term joint venture growth for the Indian Aerospace and Defence sector

* Substantial involvement in the Gripen development program

* Joint exploitation of other defence, security and aerospace opportunities

* Joint exploration of civil security and other non defence projects

* Industrial cooperation greater than 50% of contracted value



Gripen answer to Croatian request

FMV, the Swedish Defence Material Administration, has responded to a request from the Croatian government for information regarding the supply of twelve (12) new Gripen fighters to meet Croatia’s national, European and NATO needs.

4/9/2008 | “FMV is pleased to be part of the ongoing procurement process in Croatia and we believe the proposal we have submitted is very competitive” says Jerry Lindbergh, Sales Manager for Central and Eastern Europe at FMV.

This response, which was submitted on 27 March 2008 in close co-operation with Saab AB, includes offers for support, training and an extensive industrial offset package.

This invitation from the Croatian authorities to the Swedish Gripen team, follows the recent receipt of similar invitations from Norway, India, Denmark and Switzerland, and also the signing of contracts between Sweden and Thailand for the supply of 6 Gripen fighters and Saab surveillance aircraft, and is further evidence of the big interest Gripen is generating worldwide.



Gripen team responds to Denmark's requirements

In Copenhagen today, Gripen International submitted its response to Denmark's supplementary request for information (SRFI), regarding its requirement for a next generation fighter.

11/29/2007 | Following the issue of the Danish authorities’ original Request for Information (RFI) and the subsequent submission of the Gripen teams’ formal proposal response in December 2005, the Danish evaluation committee requested certain additional information and clarifications from the competing suppliers. The Gripen team’s response was formally handed-over, on time, by Gripen International’s Managing Director Johan Lehander.

Image: Gripen next generation fighter

“The Gripen team is delighted to provide its response to the Danish Defense Acquision and Logistics Organization” (DALO) request for supplementary information. We are confident that the responses and proposals we have submitted will meet, or exceed the Royal Danish Air Force Air Materiel Command’s requirements” said Johan Lehander when the Supplementary Request For Information (SRFI) response was delivered today, Thursday 29 November 2007.

Lehander continued “When the day comes for Denmark to replace its ageing U.S. F-16´s, we see Gripen as an excellent replacement. The aircraft is very capable, operationally proven in service and also the most cost-effective solution. Add to this, the outstanding level of Industrial Co-operation and high levels of Technology Transfer we can offer, and I am certain we have an unbeatable offer."

‘Gripen NG’ (Next Generation) is based on the proven ‘C’ and ‘D’ versions of the Gripen fighter, already in NATO-use, but further enhanced and tailored specifically to meet the needs of the Royal Danish Air Force (“Flyvevåbnet"), thus providing the ideal solution for a F-16 replacement.

Gripen NG (Next Generation), offers the Danish Air Force a number of benefits, including:

* A fully NATO interoperable, Net Centric Warfare (NCW) solution, featuring Nordic heritage and common sense

* Significantly lower acquisition and operational cost compared with alternative platforms

* Full Swedish Government, Air Force and Industry support

* Access to all levels of technology enabling autonomy and increased national security

* A vast range of integrated European and US weapons resulting in less dependencies

* A low risk solution with a funded development program

* An integrated logistics support solution from a proven supplier close to Denmark

* Generation of sustainable economic benefits through long term industrial partnerships

Gripen NG (Next Generation) - The common sense solution

Gripen is the first of the new generation, multi-role combat aircraft to enter service. Using the latest available technology it is capable of performing an extensive range of air-to-air and air-to-surface operational missions and employs the latest weapons. Gripen is designed to meet the demands of current and future threats, while at the same time meeting strict requirements for flight safety, reliability, training efficiency and low operating costs. Gripen is in service with the Swedish, Czech Republic and Hungarian Air Forces and has also been ordered by South Africa. The UK Empire Test Pilots’ School (ETPS) is also operating Gripen as its advanced fast jet platform for test pilots worldwide.



Saab offers Gripen to Switzerland

Saab has today submitted a Gripen proposal to Switzerland. The proposal was handed over to the Swiss department for procurement of technologically complex systems and defence technology, armasuisse, in Berne.

7/2/2008 | The proposal is a response to the Request for Proposal (RFP) which armasuisse issued January 7, 2008. Switzerland has a need to replace its fighter aircraft F-5E/F Tiger and Gripen is one of three potential suppliers. The exact number of required aircraft has not been disclosed by armasuisse.

Saabs CEO Åke Svensson is delighted over the Swiss interest in Gripen: "Switzerland is yet another example of the strong interest for Gripen worldwide. Our proposal meets all the requirements put forward by armasuisse. The Gripen proposal offers Switzerland the most cost-effective and proportionate replacement for the F-5E/F and moreover a perfect force fit with existing F/A-18 C/D. The proposal also features long-term viable industrial co-operation at 100 per cent of the contract value."



Defense Spending

Gripen Looking For a Sale - Any Sale

Daniel Darling

August 17, 2009 Daniel Darling

With a host of jet fighter competitions unfolding in countries across the globe, Sweden’s Gripen-producer Saab is nervously awaiting announcements by Brazil and India as to which combat aircraft has been selected as their preferred future fighter. The contests in both countries are viewed as vital for Saab, which hopes to emerge the winner in at least one of the two in order to keep the production line for its multi-role, single-engine JAS 39 Gripen open beyond 2012.

A win for the Gripen in India would secure an order for 126 aircraft, plus the possibility of seeing that total eventually expand to 250-300 units through future orders. Brazil presents a smaller, though no less vital, market opportunity; it has an immediate requirement for 36 aircraft. The winner of the Brazilian competition is also expected to see further orders, with a total purchase possibly reaching up to 120-150 aircraft.

Failure to secure one of the two contracts could shake the Gripen out of the global combat aircraft market unless further sales are achieved via smaller-scale markets. Thus Saab is looking to lock down a large foreign customer to compensate for what have so far proven to be limited state and export orders of its aircraft.

At present the Gripen has been chosen as the primary fighter for the air fleets of Hungary, the Czech Republic, South Africa, Thailand and, of course, Sweden. With the exception of the Swedish Air Force, however, each of these countries’ orders has been for less than 30 aircraft. Due to its own budgetary stresses, Thailand suspended its order for a second batch of six Gripens earlier this May. Sweden, meanwhile, has been trimming the size of the Air Force and current plans call for a fleet of 100 Gripens by 2012. Some of these aircraft will be existing models upgraded from their current A/B configurations to the more advanced C/D variant, rather than new-build types.

Executives for Saab’s Gripen marketing company - Gripen International - have publicly stated they expect to sell up to 500 of the newest-generation JAS 39 E/F Gripens as well as 200 of the C/D version across the coming decade. Such figures seem difficult for the Gripen to achieve, but a win in either India or Brazil would keep the aircraft alive on the global fighter market, enabling Saab to move forward with further development of the advanced E/F model (marketed as the Gripen NG, or next-generation).

Due to its scale, the contest in India is being viewed with much anticipation. There the JAS 39 Gripen NG is up against the Boeing F/A-18E/F Super Hornet, the French Rafale (produced by Dassault), the Eurofighter Typhoon, Lockheed Martin’s F-16IN, and Russia’s MiG-35. A final decision as to which platform has been short-listed is not expected by India until 2010.

In Brazil, where a decision as to the winning platform is expected over the coming weeks, the Gripen is believed to be better placed. Having already been down-selected by the Brazilians in September 2008, the Gripen NG is up against the F/A-18E/F and the Rafale. France has offered Brasilia desired technology transfer in an effort to sweeten its bid, while Boeing is believed to have offered Brazil F/A-18 component production work should it win. The Rafale is the most expensive of the three fighter alternatives; the Gripen the most economical at around $60 million per unit.

gripen1 Gripen Looking For a Sale - Any Sale

Should Gripen’s bids in India and Brazil fail, all is not entirely lost for the fighter. Other contests remain open, albeit on a much smaller scale. Switzerland is expecting to place a bid for 33 aircraft to replace its Northrop F-5 Tigers next year, while Saab is offering up the Gripen as an alternative in contests underway in the Netherlands, Denmark and Greece. Fighter competitions are expected to open up in the near future in Croatia, Bulgaria, Romania and, further down the line, the three Baltic countries of Estonia, Latvia and Lithuania. Saab is also hoping for follow-on orders of the Gripen in the near future by the Czech Republic and South Africa.

Yet some of these competitions - important as they may be for the future of the Gripen - are also a challenge for Saab in their own right.

For starters, competing for each of these potential buys means spending more and more to market the Gripen. Further, in contests such as those in Denmark and the Netherlands, the Gripen is going up against the Lockheed Martin F-35 Joint Strike Fighter. Last year Saab suffered a blow when Norway chose the F-35 over the Gripen NG. The Swedish government had come to the aid of the Gripen bid, emphasizing to Oslo the desirability of fielding common platforms via Nordic alternatives. Yet Saab still lost the contest - much as it is expected to in the Danish and Dutch fighter competitions. In fact, going forward the European jet fighter market - save for France with the Rafale - may eventually shrink to just two platforms: the F-35 and the Eurofighter Typhoon.

Finally, while the Gripen is presented as a viable alternative for those smaller air forces seeking one aircraft-type capable of performing multiple missions, it faces the problem of marketing to customers whose fighter requirements are likely to be pushed back due to defense funding shortfalls. These include Croatia, Bulgaria and Romania.

The best hope for the Gripen is likely to be found in Switzerland - though the Swiss fighter requirement may yet fall victim to political considerations. As occurred in the case of Switzerland’s Alpine neighbor, Austria, questions over the need for an expensive buy of jet fighters in the absence of an immediate threat have carried weight with a public skeptical where large military purchases are concerned. Still, Austria ultimately went ahead and purchased the Eurofighter Typhoon (15). In the Swiss competition, the Gripen - up against the Eurofighter Typhoon and the Rafale - presents the cheapest of the three options. Boeing - who already has supplied the Swiss with 33 F/A-18 Hornets - dropped out of the contest in 2008.

As strange as it seems, it may end up being a neutral nation that keeps the Gripen program alive. Should its India and Brazil bids fall short, Saab is unlikely to quibble as to where it finds an export customer and will pursue looming opportunities in Asia, the Middle East and Latin America with renewed vigor.



Saab Fails to Land Gripen Orders, Threatening Output (Update2)

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By Sabine Pirone

April 14 (Bloomberg) -- Saab AB, the Swedish maker of the $40 million Gripen jet fighter, may fail to win enough orders to guarantee the plane’s future as the build rate slows and parts- makers halt production.

Norway dealt Saab a blow in November with a contract for 48 Lockheed Martin Corp. Joint Strike Fighters after analysts predicted the Gripen would win. The Netherlands selected the JSF as the best candidate to replace 85 older aircraft a month later, and Denmark may also pick the U.S. plane this year.

Work on Gripens for South Africa and Thailand runs out in 2012 and only 26 deliveries remain, pushing output down to 10-12 aircraft a year from about 15 previously. Linkoeping-based Saab is holding out for orders from India and Brazil to rescue the flagship product of an aeronautics unit that contributes 20 percent of sales. Suppliers including Volvo Aero, maker of the plane’s RM12 engine, are already winding down production.

“After South Africa we have no more orders and that’s a fact,” said Fredrik Fryklund, a spokesman for the Volvo AB unit, which gets 7 percent of its revenue from work on the Gripen. “Next year some time we’ll probably deliver the last engine. Maybe another country will like our Gripen with the RM12. Otherwise, the production line will be closed.”

Saab fell 4.9 percent to 62.50 kronor in Stockholm trading, the sharpest drop in five weeks. The stock’s decline compares with a 0.7 percent fall in the Bloomberg World Aerospace and Defense Index of 17 industry leaders not including Saab.

Marketing Plans

The planemaker reiterated after losing the Norwegian contract that it aims to sell 200 more Gripens abroad and is marketing the 1,320 mile-per-hour aircraft to eight potential new customers. Spokesman Lasse Jansson says the production rate has always been flexible and that the company has no supply- chain problem because it only buys parts based on orders.

Norway said it placed the 18 billion-kroner ($2.7 billion) JSF order, worth another 145 billion kroner in maintenance and repair over 30 years, after judging the plane to be 6 billion kroner cheaper than the Gripen and better in all of its main duties. Saab said Dec. 10 that the pricing was faulty and it was “surprised” at the choice, given that Norway had indicated it wanted closer cooperation with neighboring Sweden.

Lockheed’s hand may have been strengthened by Norway’s role as one of eight partner countries helping the U.S. develop the JSF, also called the F-35. Denmark is also involved, as is the Netherlands, with 84 Dutch companies making parts including cables and doors valued at 750 million euros ($1 billion).

Dutch Jobs

Dutch defense ministry spokeswoman Sascha Louwhoff said that while the competition will remain open until a contract is signed next year, the JSF has become important to the industrial base, with the government having invested $800 million. Two demonstrator planes are about to be ordered.

“We’ve invested a lot of money in the JSF program, you cannot wipe that out,” she said. “For the armed forces it’s important that they have the best aircraft. For the Netherlands as a whole it’s also important that we get orders and jobs from it. It’s a two-way approach.”

Danish defense spokesman Henrik Levysohn said the country will also hold an open contest between the Gripen, JSF and Boeing Co. F/A-18 Super Hornet, with a preliminary choice to be made this year. Test aircraft will be commissioned before a contract is signed in 2012.

“The potential is still there, but as they lost in Norway, the likelihood of success in European countries like Denmark and the Netherlands has decreased,” said Stefan Cederberg, an analyst at Enskilda Securities in Stockholm who recommends buying Saab stock.

Supply Chain

While Saab can sustain Gripen production at a reduced level, the company needs contracts now if it’s to safeguard the supplier base, since companies normally provide parts well ahead of manufacturing, said Sandy Morris, an analyst at Royal Bank of Scotland Group Plc in London with a “buy” rating on the stock.

“They need an order in 2009,” Morris said. “Gripen production may not cease this year, but further down the chain, suppliers are likely going to run out of work.”

While Saab may be able to keep production lines moving by doing upgrades, that won’t in itself be enough to retain design capabilities and the supply chain, he said.

The Gripen’s suppliers include aircraft-electronics manufacturers Honeywell International Inc. and Thales SA, Goodyear Tire & Rubber Co., which makes the wheels, Martin-Baker Aircraft Co., an ejector-seat specialist, and Rheinmetall AG, which makes 27 millimeter cannon, as well as dozens of smaller companies, many Swedish.

‘Crunch Time’

Richard Aboulafia, an analyst at Teal Group in Fairfax, Virginia, said deliveries generally need to be running two years ahead to sustain the supply chain.

“If they don’t get orders soon, the production line starts to dry up,” he said. “It is coming down to crunch time. You can be flexible in speeding up or slowing down, but if a line goes cold it’s out of your hands.”

Saab says it has submitted binding responses to tenders from Brazil, Denmark, India, Romania and Switzerland and is also looking at bidding for orders from Bulgaria, Croatia and Greece, as well as the Netherlands. The Gripen made its first flight in 1988 and entered service in 1993. The first export contract was signed by South Africa in 1999.

Imperiled Orders

Awards from India or Brazil -- which may number 126 and 36 aircraft respectively -- are still some way off and any contracts in Eastern Europe have receded by at least five years because of the global financial crisis, Morris said.

Switzerland has delayed selection until December at least and may represent Saab’s best chance of a new Gripen contract, analysts say. Swiss relations with Germany, where the rival Eurofighter Typhoon program is based, have been strained by the countries’ dispute over tax evasion.

Volvo Aero said that while Switzerland is a candidate for planes using the RM12 engine, based on the F404 from Fairfield, Connecticut-based General Electric Co., any contract from India or Brazil would probably be for the Next Generation Gripen with power plants direct from GE.

“We have been preparing for a commercial change in our company for many years,” Volvo spokesman Fryklund said from the unit’s base in Trollhaettan, Sweden. “We have foreseen this, so we are not in trouble.”

Leach International, a supplier of electrical-power distribution assemblies for the Gripen, has already finished shipments, spokesman Jean Emmanuel Metz said by telephone from Strasbourg, France.

While Sweden may provide further upgrades to keep the Gripen line going, Saab may have to drop plans for a new assembly line or close it temporarily, Morris said.

The Gripen has 250 orders, 204 of them from Sweden, which has leased out 14 planes to the Czech Republic and is also upgrading a further 31. South Africa has ordered 26 planes, of which 20 are still to be delivered, and Thailand has contracts for six. Hungary has leased 14 planes which it may buy after 10 years of operation.



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