Major Military Contract Faces Overseas Threat

In the coming weeks, the Department of Defense will decide between two competing aircraft to conduct light attack and armed reconnaissance (LAAR) and light air support (LAS) missions – the Hawker Beechcraft AT-6 and the Embraer Super Tucano. Both aircraft are mission appropriate and cost roughly the same. However the acquisition of Hawker Beechcraft’s AT-6 has the added benefit of creating significantly more American jobs – 1,400 spread across 18 states.

Hawker Beechcraft is a privately held company based in Wichita, Kansas that has a long history of producing civilian and military aircraft and has already provided warplanes to the U.S. Air Force (USAF) as well as to other branches of the military. As retired U.S. Navy Admiral and current New Mexico State Senator William Payne observed, “… Hawker Beechcraft has a proven track record of success at home and with our allied forces.” Hawker Beechcraft will partner with Lockheed Martin (another private enterprise) on this project.

In contrast, Embraer is a state-subsidized Brazilian company in which the Brazilian government holds a “Golden Share.” Embraer receives significant research and development funds from the Brazilian government’s Financing Agency for Studies and Projects (FINEP) and, during a recent demonstration for the USAF, Embraer used an aircraft owned and fully supported by the Brazilian Air Force during test runs. The Golden Share that the Brazilian government holds gives it veto rights that include control over creation and/or alteration of military programs, and the ability to interrupt maintenance and replacement parts for military aircraft. In short, a Super Tucano acquisition could be altered, discontinued or delayed by the Brazilian government at any time for any given reason.

Forcing a privately owned company to compete on a rutted playing field with a semi-privatized foreign company runs counter to free-market principles. Further, if Embraer wins the bid, we will be exporting 1,400 jobs abroad in an industry (aerospace) which has enjoyed steady growth and offers jobs at significantly higher salaries than the national average. The Brazilian government’s meddling in a company providing vital aircraft to protect our troops could potentially pose unnecessary national security risks.
Developing strong trading ties with other countries is an economic imperative and free markets have the power to propel economic prosperity worldwide. However, competition between privately-held and government-subsidized entities is a distortion of the free market system and encourages the very government interventionism that our country should seek to prevent.

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