With Iraq pretty much over with and Afghanistan hopefully winding down soon, the U.S. military has announced its giving away – free – 13,000 used military trucks. The catch, they’re MRAPs – mine and IED resistant vehicles. The MRAPs typically weigh around 40,000 pounds, stand about 10 feet tall and cost the Pentagon around $500,000 when new.
According to a feature story by Bob Tita in the Wall Street Journal earlier this week, police departments around the country have already acquired 200 of the trucks for use as tactical vehicles. And additional requests are pending for another 750 trucks. And although you may long for a hardened, modern military vehicle complete with machine gun turret, don’t get your hopes up. Private citizens and businesses need not apply. Any vehicles that do not land new homes will most likely wind up in the scrap heap.
While scrapping military equipment after wars is nothing new, the WSJ notes this particular instance could have negative consequences for the trucking industry at large. Component manufacturers and defense contractors, which keep the trucks running with replacement suspensions, engines and transmissions, stand to suffer. As does Navistar, which found its once-robust defense revenues falling 51 percent last year as MRAP production was scaled back and demand for spare parts fell off significantly.
Oshkosh is another MRAP producer. According to the WSJ piece, it expects to see its defense revenues fall by around 40 percent this year (after dropping 23 percent last year) as the Department of Defense scales back its MRAP force.
“We’ve been trying to get the government to take a pause instead of pushing these vehicles into the shredder,” John Akalaonu, senior program manager for Navistar’s defense unit is quoted saying in the story. “The money has been spent to make these vehicles. It doesn’t make sense to just give them away or shred them.”
Wasteful or not, it seems that the hardened military vehicle revenue market is one revenue stream that is about to dry up for good.
Presented By: Electronic Funds Source