A General Motors Works Council's Response to the Capitalist Global Financial Crisis: A Case Study from Germany

Article excerpt

Introduction: A short overview of IR at GM-Opel, and varieties of capitalism

Unlike Anglo-Saxon industrial relations (IR) that reflect a 'liberal market economy' (LME), German IR has been closer to a 'coordinated market economy' (Hall and Soskice, 2001; Klikauer and Donn, 2004a; Frege, 2005; Jackson, 2007; Towers, 2007, Thelen and Hall, 2009). According to Hall and Soskice's Varieties of Capitalism (2001: 8fl; cf. Hodgson, 1995; Becker, 2009), economic affairs inside LMEs are coordinated via hierarchies and competitive arrangements based on market relationships. This has created an arm's-length exchange of goods and services arranged under competition and formal contracting, where price signals are generated by markets. LMEs are based on supply and demand on the basis of margin calculations. This follows neoclassical economics in enshrining market institutions to coordinate economies.

CMEs, on the other hand, have adopted exchange mechanisms and information transmission inside networks with a high reliance on collaborative relationships. This occurred in Germany despite the current fashion for 'erosion assertion' in German IR (Abrahamson, 1996; Rehder, 2003, 2006; Streeck, 2005a, 2005b, 2007, 2008; Thelen and Kume, 2006; Thelen and Martin, 2007). Business affairs and IR in CME's more social-market oriented economies tend to exclude competition in favour of coordination. Coordination among companies in CMEs occurs as a result of strategic interaction among firms and other actors. Hence Hall and Soskice's (2001) five coordination problems--vocational training, corporate governance, inter-firm relations, employee-management coordination and IR- have found different solutions in LMEs (e.g. AngloSaxon countries) to those of CMEs, as in the case of Germany (Grahl and Teague, 2004; Thelen, 2009a, 2009b).

Despite the popularity of Hall and Soskice's Varieties of Capitalism (2001), with half a million Google hits (April 2011), there are serious shortcomings with this approach:

1. Contrasting 'Good Capitalism' with 'Bad Capitalism' increases the tendency to forget that these are mere variations on a theme called capitalism, and that this does not alter the pathologies of capitalism (Marx, 1890; Marcuse, 1966: 101; Burkett and Hart-Landsberg, 2003; Watson, 2003; Baumol et al., 2007; Moore, 2009; Bruff and Morton, 2010).

2. Hall and Soskice (2001) appear to be more interested in differentiating the ways in which competitive advantage can be achieved in LMEs and CMEs than in bringing to our attention the inherent contradictions inside each model, between both models, and in capitalism in general.

3. It presents each box as producing stability and is slightly determinist, instead of highlighting the dynamics of capitalism at a micro-, meso-, and marco- level (Deeg and Jackson, 2007; Crouch, 2007).

4. One cannot argue that capitalism is geographically fixed. While capitalism has only one true model--capitalism itself--it has never been determined by geography or nationality because its character transcends nations and geographical locations. Hall and Soskice (2001) tend to gloss over significant variations within their two ideal-types.

5. Social structures of accumulation such as those activated along the lines of class, race, and gender remain unexplored by Hall and Soskice (2001).

6. Their approach does not account for what became known as GVCs (global value chains) and GPN (global production networks), which cross over the boundaries drawn by Hall and Soskice (2001; Thompson and Vincent, 2010).

7. Hall and Soskice cannot be used to 'Eclipse the Reasons' (Horkheimer, 1947) for the enduring social, political, and economical suffering that capitalism causes.

Bearing these shortcomings in mind, their approach is not used to highlight, for example, Germany's CME-like approach to IR as defined by a non-competitive regime of a duality of legal regulation and trade union structures that involve all three actors (state, trade unions/works councils, and employers/management) at the national (federal), industrial (metal), corporate (GMO), factory (Russelsheim, Eisenach, Bochum, Kaiserslautern), and workplace (e. …