The Canadian government is in the market this year for $2.3 billion worth of advanced fighter planes to replace its aging fleet and, as befits a potential purchaser of such magnitude, it is being wooed by aerospace giants from across the globe.
It addition to looking for the best plane for their money, the Canadians have added a new wrinkle to the arms-buying business: The company that gets the contract is likely to be the one that promises to give the biggest boost-to Canada's economy.
"We simply can't make a substantial military aircraft purchase abroad without insisting upon offsets in the form of industrial benefits," said Canadian Defense Minister Barney Danson in setting forth his government's policy in a recent speech in Ottawa.
"The promise of a large contract is a great incentive for competing foreign manufacturers to meet our industrial benefit requirements," Danson told the Air Industries Association of Canada in what is proving to be an understatement.
The result has been a most unusual advertising campaign.
Grumman, as it tries to promote its F14Tomcat fighter, is declaring in fullpage ads published in Canada that its plane "will bring with it an industrial program consisting of 75 major activities. This program will creat thousands of new Canadian jobs . . . We intend to return essentially every dollar spent with us back into the Canadian economy."
If it gets the contract, Grumman will place orders in Canada for trucks, buses, sailboats and sewage plants, the ad promises.
Northrop, which is pushing the attack version of its F18, is stressing in its ads that it will look upon Canada as an industrial partner if its gets the air-plane contracts, and cities the company's arrangement in Switzerland as the model.
To sweeten its successful sales pitch to Switzeland for the F5, Northrop agreed to use its global sales force to help market Swiss products abroad. Also, Northrop bought directly from Switzerland as part of its "Swiss offset program" everything from electric cable to Swiss army knives.
Northrop is especially eager to sell its land version of the F18, the F18L, to Canada because this would heop clear the way for selling the same plane to Iran. To date, the Carter administration has shelved Iran's request to buy the F18L on grounds this would be designing a U.S. military plane to another country's specifications. But that restriction does not annply to a NATO country like Canada.
The fifth aerospace competitor is a consortium of British, Italian and West German firms offering the Panavia Tornado fighter. In exhange for the $2.3 billion fighter order, the consortuium reportedly would open a giant training base in Canada for British, Italian, West German and Canadian pilots.
The consortium also is trying to cash in on the sentinment in Canada for deepening its business relationships with Europe rather than the United States.
The Canadian government is trying not only to give its own aerospace industry a boost through the contract but also help the civilian economy.
"It is our policy that offsets" from defense contracts "not be restricted to the defense sector" because "it is in the national interest that our industry advance on a broad front," Danson said in his policy speech of April 10.
He said it was "very healthy" that the competing airplane companies "have been sweeping from one end of the country to the other in order to drum up offset business" that will be spread across Canada, not just in the aerospace centers around Montreal and Toronto.
Danson has said that "I don't think you can divorce military decisions and industrial benefits."
Canada is scheduled to select and airplane by mid-October, although a call for an election before then could delay the fighter decision. Canada plans to buy between 120 and 150 fighters for about $2.3 billion, the biggest airplane order ever place by that government.
One U.S. aerospace executive acknowledged that placing work in Canada amounted to taking jobs away from American workers. "But if that's what it takes to win this competition, we'll do it - as dirty as that may seem." CAPTION: Illustration, Montage of aerospace advertising in Canadian publications seeking $2.3 billion jet contract. By Ken Burgess - The Washington Post