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Marxist and Weberian lenses: GM layoffs

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  1. Event summary.
  2. Theoretical concept: Marx.
  3. Theoretical re-definition and explanation of event: Marx.
  4. Analysis of the evidence: Marx.
  5. Theoretical concept: Weber.
  6. Theoretical re-definition and explanation of event: Weber.
  7. Analysis of the evidence: Weber.
  8. Conclusions.

DETROIT, MI ? General Motors (GM) chief executives announced major restructuring plans aimed at reviving its corporate fortunes. The company's major difficulty has been its declining sales over the past year, which have racked up a total of two billion dollars of losses. Such a decline sharply contrasts with the high sales and profits it experienced during the 90's. The basic cause of the losses has been that its production capacity and output are beyond its levels of sales. Within three years, GM will cut a total of thirty thousand jobs and will close multiple factories. By 2008, this plan will reduce costs by seven billion dollars and reduce production by 4.8 million cars, about twenty percent less than year 2002 levels. GM officials hope for these changes to improve its market shares and eventually bring the company out of the economic depression with which its other American peers are struggling as well.

[...] Overall, Marx and Weber's critical analyses of the ?vicious circle? accurately describes the GM situation, and can even be extended to the relatively modern shifts in local and world economies. As mentioned, Weber's writings broadly incorporated much of Marx's ideas, and offer a model of bureaucratization that has only indirect relevance to the GM situation. Although we should acknowledge the authors' overlap, it is still clear that Marx's writings surpass those of Weber in terms of their details and specific arguments that pertain to capitalist trends of unemployment. [...]


[...] Naturally, GM has incurred huge profit losses, since it was not selling its products in ample quantities and at sufficient price. As Marx argues, this phenomenon is common among all companies, and in this case, GM did not realize that its gross profits were insufficient to cover its costs of production. Since the company executives clearly state that they do not plan on GM going bankrupt, they are significantly downsizing so as to bring their costs of production to a level where profits can again be realized. [...]


[...] Precise calculation, observation, and reason are the three major elements of what Weber describes as ?rationalization,? all of which bureaucracies adopt in order to meet their goals. Among capitalist bureaucracies, the goal is to maximize fiscal profits at all costs and the rational approach dictates that this goal takes priority over individual interests. Along these lines, bureaucracies establish positions with clear duties and qualifications, which allows for the easy interchange of workers, similar to parts in a machine: No machinery in the world functions so precisely as this apparatus of men and, moreover, so cheaply . [...]

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