Gripen referendum committee national councillors Matthias Aebischer, left, Christian van Singer and Evi Allemann react following the results on the vote in Bern yesterday. Swiss voters narrowly blocked a deal to buy 22 Gripen fighter jets from Saab. Photo: Reuters

Catherine Bosley and Niklas Magnusson Zurich and Stockholm

Swiss voters rejected a Sf3.1 billion (R36bn) order for Gripen fighter jets yesterday, dealing a setback to Swedish defence company Saab.

The 22-plane contract, which Switzerland awarded two-and-a-half years ago, was opposed by 52 percent of voters, projections by gfs.bern for Swiss national broadcaster SRF showed.

An initiative for a national minimum wage of Sf22 per hour – the world’s highest – also failed. Polls had predicted those results.

Gripen opponents had argued that the plane would cost Sf10bn over its lifetime, money that could be deployed elsewhere. Supporters of the purchase, including the government, said neutral Switzerland needed the Gripen to defend its airspace.

“The people have spoken,” said Susanne Leutenegger Oberholzer, a Social Democrat member of parliament.

“We surely don’t have the money for such unnecessary acquisitions.”

Voter turnout was 56 percent, said Claude Longchamp, the head of pollster gfs.bern. The projection had a margin of error of 2 percentage points, he said. Final results were due later yesterday.

Saab clinched a three-way contest to replace Switzerland’s fleet of Northrop Grumman F-5 Tigers in November 2011, edging out offers from France’s Dassault Aviation and from the Eurofighter consortium of BAE Systems, Airbus and Italy’s Finmeccanica.

In addition to the Swiss order, Saab beat out Boeing to develop fighters for Brazil’s air force in a deal worth $4.5bn (R47bn). Those two countries are the first after Sweden to pick the next-generation Gripen E, whose development is contingent on an export order of at least 20 aircraft.

Thailand and South Africa operate older C-model jets made by the manufacturer of Gripen, which is the Swedish word for griffin. A rejection was “negative for Saab, but not exactly unexpected given the opinion polls”, Mats Liss, an analyst at Swedbank in Stockholm, said.

While the Brazilian order was more important than that from Switzerland, the rejection meant there would be “a period of uncertainty until the Brazil order is finalised”.

Saab chairman Marcus Wallenberg told Switzerland’s Tages-Anzeiger last week that failure of the Swiss Gripen deal “won’t mean the end” of the Gripen’s development.

The company aimed to sell about 400 Gripens over the next 20 years, said Lennart Sindahl, the head of the Saab Aeronautics unit. Saab was in “serious talks” with 10 nations which could yield agreements in the near term and “a very significant country” had recently made an approach.

The Swiss Defence Ministry, which initiated the Gripen purchase, said it would honour results of the vote and would only comment further upon its outcome.

Supporters of the Gripen, who argued that Switzerland needed to maintain its aerial defences, saw their contention undermined in February after a hijacked Ethiopian Airlines plane landed in Geneva. It had to be escorted by French and Italian jets because the Swiss air force was not able to operate outside business hours.

“The majority of the Swiss population is behind the army,” said Longchamp. “It wasn’t a question just pro or contra the army, but it was also a question of finances.”

The hourly national minimum wage of Sf22, proposed by trade unions, would have been the world’s highest when adjusted for purchasing power parity, according to 2012 data from the Organisation for Economic Co-operation and Development. – Bloomberg