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. [...]
[...] It is evident that GM is in the midst of the depression period of the circle, having recently experienced significant profits and anticipating a rebound within the near future. In its current stage though, GM is downsizing in the same way that Marx describes capitalists who “discharge” employees and place them in the “industrial reserve army of labor.” Analysis of the Evidence: Marx There are clear indicators that GM is indeed going through the economic slump typical of the “vicious circle” of capitalism in which this essay takes interest. [...]
[...] Nevertheless, such extended applications are beyond the scope of this essay; for the purposes of considering the GM layoffs, Marx's ideas are far more immediately useful. Works cited Set to Drop 5,000 More Jobs and Shut Plants.” The New York Times Nov 2005. P A1. The Marx-Engels Reader Ed. Robert C. Tucker. New York: Norton & Co. Max Weber The Protestant Ethic and the Spirit of Capitalism. New York: Scribner's Press. Weber, Max Expropriation of workers from the means of production,” in Economy and Society, Volume One and Two. [...]
[...] Theoretical Re-Definition and Explanation of Event: Weber Weber's model of capitalist bureaucracy appropriately describes the GM layoffs of this event. GM's management style fulfills Weber's idea of a capitalist bureaucracy, as indicated by the company's workers being separated from the means of production, and the layoffs being purely the result of profit calculations. Analysis of the Evidence: Weber Above all else, it must be made clear that GM is a bureaucratic company. Following Weber's theory with this assumption, we will be able to see that the layoffs experienced by GM laborers are an inseparable aspect of working for a bureaucracy with profit-oriented goals. [...]
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