AIG, give us our money back

A tidal wave of public anger over bonuses paid to the AIG Financial Products traders in the amount of $165 billion has gotten Congress’s attention. Thursday, the House voted 328 to 93 to get back most of the money by levying a 90 percent tax on it. The measure would apply to employees of any company getting more than $5 billion in federal bailout money. The Senate will address the issue early next week.

In other action, Andrew Cuomo, the New York attorney general, said AIG had turned over the names of employees who received bonuses, in response to a subpoena. He will review the list and assess whether individuals on it might have reason to fear for their safety.

This congressional action makes me feel a little better. However, there are other companies that have already paid enormous bonuses to employees while their corporation was loosing money. One is like Bank of America. As they purchased Merrill Lynch, they paid giant bonuses to employees prior to the closing of the sale. Bank of America said it planned to publish the list of names and the amounts of their bonuses Thursday

Congress had approved the moneys that are to be used to bailout companies in need. However, the Obama administration is responsible for determining the actual amount and they should track where it goes. We can’t go to sleep at the wheel.

Maybe there’s light at the end of the tunnel for GM

General Motors, which has borrowed $13.4 billion from the federal government since December to keep itself out of bankruptcy, said today that it had withdrawn a request for an additional $2 billion that it thought was needed to stay alive through the end of this month.

Good news… may be.

This withdrawal of their request does not mean that GM is withdrawing their other planned draws from their approved loan account. Their plan calls for $2.6 billion in April, 2009 and at least $4.5 billion in 2010. GM also wanted access to another $7.5 billion, if needed, bringing their loan request to a total of $30 billion.

So, what is GM doing to improve their bleeding of cash? GM’s 117-page restructuring plan submitted to the Treasury Department February 17, 2009 gave a glimpse. GM is committed to focus its resources primarily on its core brands: Chevrolet, Cadillac, Buick and GMC. Of the remaining brands, Pontiac—which will be part of the Buick-Pontiac-GMC retail channel—will be a highly focused niche brand. GM plans to reduce the number of nameplates (or models of cars and trucks) over the next few years. GM current produces 53 nameplates. They plan to reduce the number of nameplates to 39 by the year 2011. This most likely will mean fewer platforms used to build cars, meaning far less development costs involved.

Hummer and Saab are stand-alone retail channels and brands. They are subject to strategic reviews, including their potential sale. A Hummer sale or phase out decision will be made in Q1 2009, with final resolution expected for both no later than 2010. Saab is offered for sale now and if no buyers’ surface, Saab will most likely be spun off as an independent company. Saturn will remain in operation through the end of the planned lifecycle for all Saturn products (2010-2011). In the interim, should Saturn retailers as a group or other investors present a plan that would allow a spin off or sale of Saturn Distribution Corporation (SDC), GM would be open to any such possibility. If a spin off or sale does not occur, it is GM‘s intention to phase out the Saturn brand at the end of the current product lifecycle.

This coupled with a planned reduction in the GM dealer network from 6,250 dealers at the end of 2008 to 5,000 dealers by the end of 2011 should have a significant savings in expenses.

GM’s announcement today came as the Canadian Auto Workers union ratified a cost-cutting deal with the automaker. GM said the agreement would “quickly reduce costs in Canada by significantly closing the competitive gap with U.S. transplant automakers on active employee labor costs and substantially reducing” the cost of benefits for retirees.

GM said it was also exploring the possibility of offloading its retiree health care liabilities in Canada into an independent trust fund, as it did in the United States in its 2007 contract with the U.A.W.

Maybe…. Just maybe, these sluggish Detroit automotive businessmen can get their ducks in a row and make one of America’s great companies a success again. Keep your fingers crossed.

Bloodhound Project Goal - 1,000 mph

Andy Green, a wing commander in the British Royal Air Force, will attempt to set a new Land Speed Record this summer at the Bonneville Salt Flats. He will make his attempt in the Bloodhound SSC and do it at over 1,000 mph. No-one has ever driven at 1,000 mph before, so the Bloodhound SSC team will have to solve problems from scratch using science, mathematics, and all the available engineering technology to meet their goal. Richard Noble is the project director for the Bloodhound SSC and is responsible for much of the car’s design.

1000 mph, that’s 1466.7 ft per second. However you measure it, these are impressive figures, particularly when attached to a four-wheeled vehicle travelling on the surface of the earth.

So, how are they going to do this? The rules for designing a car to attempt the Land Speed record are very simple – it must have at least four wheels and steer with at least two of them. Beyond this, designers are free to do whatever they like with the design and build. This differs enormously to the likes of NASCAR, Indy Cars, or Formula One, where the rules exist to ultimately slow the cars down and to see how teams overcome these challenges. This makes designing Bloodhound SSC both enormously exciting and extremely challenging.

The Bloodhound SSC is a unique vehicle. It will be powered by two separate power plants: a Eurojet EJ200 jet engine from a Typhoon fighter plane and a Falcon rocket engine from a Falcon rocket. A third power source is an 800 HP V12 racing engine that drives the hydraulic for the jet engine and pumps hydrogen peroxide to the rocket engine.

The aerodynamics was honed using one of the UK’s most powerful computers. The 35.4 inch (90 cm) wheels were the subject of a special research project in their own right, while driver Andy Green’s seat is inclined at 45 degrees, as a compromise between fitting Andy in and helping him to cope with the huge acceleration and deceleration loads. The key issue in the dynamic behavior of Bloodhound SSC is the directional stability over its entire operating speed range from 0 to 1,000 mph. The vehicle must also be able to steer and turn like a conventional wheeled vehicle, but its prime objective is extremely high speed, running straight.