I've got to hand it to Saudi Arabia -- at least they tried to spread the wealth. Every year, billions of dollars' worth of oil revenues flow from West to the Middle East. The Arab nation recently announced a plan to use some of this cash to buy $60 billion to $90 billion (or more) worth of weapons systems from U.S. defense companies. That seems like favoritism, but at the same time, Saudi Arabia has made efforts to include British allies with purchases of fighter jets, and as we learned this week, apparently tried to toss a few billion dollars worth of contracts Germany's way as well.
To no avail.
Yesterday, news broke about a deal Germany had been secretly brokering to sell Saudi Arabia 200 Leopard-2 main battle tanks. This would doubtless have been profitable for Germany, but Green Party lawmakers in the German parliament are demanding the sale be canceled. Say the Greens, with people "fighting for democracy in the Arab world," now's not the time to sell heavy weapons "to dictators."
Foolish takeaway
I can practically hear the shouts of "Hear, hear" from the boardroom at General Dynamics (NYSE: GD), maker of America's M1 Abrams battle tank. "Don't sell weapons to dictators -- let us do it." With Lockheed Martin (NYSE: LMT), Boeing (NYSE: BA), and Raytheon (NYSE: RTN) already lining up to sell weapons to Saudi Arabia, it's clear that if Germans scruple at the thought of "arming dictators," American arms dealers do not.
Germany's loss in this debate could mean billions of dollars worth of gain for General Dynamics.
Will General D march in where Germans fear to tread?. Add the stock to your Fool Watchlist, and find out.
