Saab CEO says plan to build Gripen jets in Canada depends on Ottawa making an order

A Saab JAS39 Gripen from the Hungarian Air Force performs during the Airpower 19 air show in Zeltweg, Styria, Austria on Friday, Sept. 6, 2019. (AP Photo/Ronald Zak)

OTTAWA — -- Saab’s CEO is making it clear that his company’s decision on whether to set up shop in Canada will depend on whether Ottawa decides to buy its Gripen aircraft.

“To transfer technology and build a hub in a country that would not use the aircraft themselves and have the connection with the end user doesn’t really make sense,” Micael Johansson told The Canadian Press.

He said the jets are designed to be upgraded continuously as the technology evolves.

Saab has proposed a production hub in Canada that it claims could bring roughly 10,000 jobs to this country.

“We would love to do that, and it would support the global market if we did it,” he added.

Saab has production lines in Sweden and Brazil but is looking to increase its capacity to handle an influx of potential orders, including some from Ukraine. It is also considering setting up elsewhere in Europe, such as Portugal.

Johansson insisted the company isn’t campaigning in Canada and isn’t pushing for a sale.

“We’re just answering questions on sort of what it would mean for Canada if they eventually would go and select to go dual fleet,” he said.

Saab was among several Swedish businesses represented in the entourage during a high-profile royal visit to Canada this week.

Sweden’s King Carl XVI Gustaf and Queen Silvia met with Prime Minister Mark Carney and the two countries signed a strategic partnership on deepening ties and co-operation as Arctic neighbours and NATO allies.

The proposal to build a production hub in Canada is not a new one. Saab made the same offer in its formal bid to sell Canada the Gripen fighters as a replacement for its aging CF-18 fleet.

It lost that contract to Lockheed Martin in 2023.

Johansson’s comments this week come as the federal government reviews the deal to buy up to 88 F-35 stealth fighters from the American manufacturer in light of the trade war with the U.S.

Industry Minister Melanie Joly told reporters on Tuesday Canada didn’t get enough industrial benefits from that agreement, and she has floated the idea of moving ahead with a mixed fleet.

Ottawa has committed to buying 16 F-35s so far.

U.S. Ambassador to Canada Pete Hoekstra told a crowd at a manufacturing conference in Ottawa this week that the F-35 is a “phenomenal success” and touted the involvement of Canadian industry in its production, calling it an “international plane.”

He also raised the fighter jet deal in response to a question about the renegotiation of the Canada-U.S.-Mexico Agreement on trade, saying the U.S. is waiting to see what the Canadian government will do “on a number of these issues.”

“It’s a great example of good co-ordination, but you know, Canada is going through a review of their defence industry,” Hoekstra said Wednesday.

“We need to know what it means that you’re going to build a Canadian defence infrastructure ... there might be some that would say you don’t really have one,” he said, adding that many Canadian defence firms are subsidiaries of American companies.

On Thursday, Joly spoke at an event alongside her Swedish counterpart, Industry Minister Ebba Busch, who was also part of the royal visit. Joly said while Canada is very much interested in Saab, Ottawa still needs more details about the proposal.

Johansson said a Canadian production hub would take between three to five years to set up and “you would end up with 9,000, 10,000 jobs,” including both direct and indirect jobs, “on a continuous basis for decades to come.”

Kyle Duggan and Sarah Ritchie, The Canadian Press