The Canadian government announced today that its search for a fighter jet has narrowed to two U.S. manufacturers and that the $2,34 billion contract would be awarded next May to either General Dynamics or McDonnell Douglas.
The contract to replace Canada's fighter aircraft here and in Europe is the largest in the country's history and the costliest now being contemplated by any NATO member.
General Dynamics' F16 and McDonnell Douglas' F18A have been selected from an original list of six bidders, Defense Minister Barnett Danson said.
The government's decision on the aircraft came just before Prime Minister Pierre Trudeau announced a major shuffle in his cabinet. Three new ministers - two from Ontario and one from Quebec - were added to the Cabinet in a shuffle which was viewed as Trudeau's most dramatic political response to a series of by-election defeats his governing Liberal Party suffered last month.
In eliminating four other bidders the government will choose between the two least expensive planes offered, hoping to purchase between 130 and 150 aircraft for delivery beginning in 1982.
The F16 is a light, single-engine aircraft already used by five NATO countries, an asset Danson underlined in stressing the need for better coordination of equipment within NATO.
But McDonnell Douglas' F18A is a twin-engine plane which some military experts prefer for patrolling Canada's huge expanse of Artic territory.
The Canadian decision ended intense lobbying efforts by four other groups hoping to sell aircraft including the Toronado, built by Panavia, a British-German-Italian conglomerate and three American planes: Northrup Corporation's F18L, McDonnell Douglas' F15, and the Grumman Corporation's F14.
Some observers here had thought that the government might choose a combination of planes, selecting one for use in Canada and another for NATO. But Danson said the Cabinet had rejected a mixture as too costly. Two aircraft would have requires separate training and maintenance programs and different spare parts.
The competition between General Dynamics and McDonnell Douglas will intesify greatly in the months ahead. The Canadian government will press both companies to show how the purchase of their plane will benefit Canadian industry.
In particular, the government wants the companies to spin off research and manufacturing contracts to Canadian suppliers. The government said it will announce the winner of the contract in May, the month Canadians probably will be going to the polls in a general election. This will allow the governing Liberal Party to show different regions of Canada how they will benefit from the contract.
Today's Cabinet changes placed greater prominence on English-Canadian politicians, apparently to counter a sharp drop in support for Trudeau's party in English-speaking Canada.
Key changes included John Reid replacing Marc Lalonde in the highly sensitive post of Federal-Provincial relations. Lalonde takes over the Justice Ministry and Robert Andras was appointed chairman of the Board of Economic Development.
Other appointments include Martin O'Connell as labor minister; Judd Buchanan as president of the Treasury Board; Energy Minister Alastair Gissespie becoming also minister of science and technology; Anthony Abbott minister of small business, adding the national revenue portfolio and newcomer Pierre de Bane as minister of supply and services.