What i meant was: How can it make economic sense for SAAB to buy twice as much as they sell ? (with regards to the very costly labour in Norway)
Well if it didn't make sense economically they wouldn't do it, would they?
Offset deals are not a simple "we sell you for x € and buy from you for y €"-thing, which in fact wouldn't make sense. They are a very complex thing actually, and if Sweden didn't have strong economic ties to Norway already it wouldn't be possible for them to offer such a deal.
First of all, these deals mostly cover a long period of time. Secondly, they often contain (industrial) services you would've bought anyway but perhaps not in this particular country.
Example: Norway buys Gripen. Sweden needs 3 new hydropower plants and plans to buy them over the next 12 years. As Sweden knows that Norway has considerable expertise in this area, they offer Norway to build these plants instead of e.g. Germany as an offset. In addition they decide to source from a norwegian supplier (who can deliever comparable quality and cost!) instead of a french one for their next Saab SUV. As I said, just an example.
What I wanted to say is, you certainly make economic sense of it. If you can't, there will be no deal. The deal must be profitable. Secondly, I wanted to show that these deals have several levels, in the example a nationwide (power plant provider) and a company level (choice of automotive supplier).
As the Western European countries are very closely connected anyway and often have unique capabilities you can utilise it is quite easy to generate offsets in comparison to dealing with e.g. a North African country.
gf0012-aust said:
national interest over rides cost. (look at the czechs, their turnaround was singularly influenced due to the idiotic behaviour of a US Govt official. The US Govt won't be allowing that to happen again if it can help it.
might Norway consider the Gripen? - of course, but IMHO not for some of the reasons that are touted as wunderbar selection vectors.
GF, sometimes I'm not quite sure what you want to state. I don't know about Australia and the countries you've been working with, but here in Western Europe, it's all about hearts and minds. Especially as the military doesn't enjoy that much enthusiasm in general. If Saab manages to win hearts and minds
of the people in Norway and can make their offer appear cheaper, yet sufficient for a country that doesn't invade other countries on a regular basis, then the political deciders will go for it, no matter what the military says. You're talking about countries where nobody sticks "support our troops" to the bumper.