Crazy Leon's Discount Battle Tanks

So you've got your eye on this sweet new ride -- an M1A1 Abrams Main Battle Tank -- but you're a little short on cash. What do you do?

Head on down to Crazy Leon's Discount Battle Tanks, that's what. "No reasonable offer will be refused." Heck, even if it's an entirely unreasonable offer you've got -- you're in luck! This week only, Secretary of Defense Leon Panetta is literally giving tanks away.

Beware of Greeks accepting gifts
That is, he'll give them away if your name happens to be "Greece." You see, upon arriving at the Pentagon a few months back, Mr. Panetta discovered that he's got Abrams tanks stacked to the rafters, and not a Soviet in sight to point 'em at. The things are taking up space, and costing the U.S. millions of dollars a year in annual maintenance. (I also hear the insurance premiums are through the roof.) So rather than pay for the upkeep, or scrap the fleet, Mr. Panetta hit upon a solution: Give the tanks away, gratis, to Greece.

Plans currently call for Greece to take as many as 400 tanks off our hands, paying only the shipping costs. (DryShips (Nasdaq: DRYS  ) ? Want to make us an offer?) But is this really a good deal for the U.S.?

The price of free
Actually, it may be a good deal... for the company that makes the tanks. After all, this isn't the first time the Pentagon has tried a giveaway gambit. Just last year, Panetta's predecessor offered Romania two dozen Lockheed Martin (NYSE: LMT  ) F-16s for the same low price of "free."

As for this year's giveaway, sure, General Dynamics (NYSE: GD  ) would prefer to sell Greece brand-new tanks. But as you may have heard, Greece is a bit strapped for cash right now, and can't really afford to buy new. So really, it's a choice between seeing a tank scrapped entirely, or letting Greece take possession. If all goes well, maybe Greece will put a few more miles on the odometer and ask the contractor to do an oil change, or upgrade the tank with wicked cool tailfins and an awesome satellite radio system.

Either way, General Dynamics gets a chance to make some incremental revenue off these battle buggies -- and some free marketing, too, so that in years hence, when Greece is feeling flush, maybe it will buy American again.

To keep up with the latest news on Lockheed Martin, General Dynamics, or DryShips, click below to add them to your Watchlist.

Fool contributor Rich Smith does not own shares of (or short) any stock named above. The Motley Fool owns shares of General Dynamics and Lockheed Martin. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1738747, ~/Articles/ArticleHandler.aspx, 10/22/2014 11:57:23 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement