Saab Loses $3.5Bn on the Gripen

Posted on by on May 19th, 2014 | Comments Off

When you ask, most will say no. That’s what happened for the Gripen and Switzerland, which resulted in a cancelled ordered of 3.5 billion USD for SAAB. The swedes are going to be happy with this… The 22-plane contract, which Switzerland awarded 2 1/2 years ago, was opposed by 53.4 percent of voters, the Swiss government in Bern said yesterday. The latest survey ahead of the vote had showed some 51 percent of people opposing the transaction while 44 percent were in favor. The result is “negative for Saab, but not exactly unexpected given the opinion polls,” said Mats Liss, an analyst at Swedbank AB in Stockholm. While a Brazilian contract won last year is more important than the one from Switzerland, the rejection by Swiss voters means there will be “a period of uncertainty until the Brazil order is finalized,” he said. Polls ahead of the referendum predicted that voters would turn down the government plan, which called for the new fighter jets to replace the Swiss Air Force’s ageing fleet of 54 F-5 Tiger aircraft to defend Switzerland’s air space. Critics argued Switzerland does not need new fighter jets and warned they could end up costing far more than the country bargained for. The government, meanwhile, has for months been playing up the importance of the new planes for Swiss security. “This decision will create a security gap,” warned Swiss Defence Minister Ueli Maurer, the deal’s biggest champion. He told reporters an in depth analysis of the new situation was needed, but acknowledged: “We don’t have a Plan B.” Saab AB (SAABB) stands to lose a 3.1 billion-franc ($3.5 billion) order for Gripen fighter jets after Swiss voters rejected the deal in a referendum. The stock fell as much as 7 percent in Stockholm.

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