[gtaproject]

There is an entire cost and competition aspect of the situation, too. Not picking sides in the union/anti-union debate, but escalating healthcare and pension expenses being covered by fewer workers was a huge hit to earnings. Throw in lower returns on the pension assets as the higher risk/higher return investment options tanked, and huge amounts of funds were diverted away from development and to these legacy obligations. Also consider CAFE and the company being forced to build small vehicles that could not be profitable given the high fixed cost structure. So in a way, GM didn't want people to buy small cars. If you lose money on every one, you don't make it up in volume (that's a little joke). Consider the long-term effect of not being competitive in the small car market. Those are first time buyers and the long and short of it is that the domestic manufacturers basically told the market, "go buy imports vehicles until you are ready to spend $30k+ on an SUV or luxury car, and then we'll be here waiting with something to show you." What happens if a buyers owned an Corolla, then Camry, then is ready for something bigger as they have become more affluent and their family is expanding? Now you are in a dogfight for those dollars - the competition now has resepctable offerings in every segment and probably beats on price and (perceived) quality.

I started to consider bankruptcy inevitable back in 2004 as I thought the suburban dad pick-up/two-child-family Yukon fad had overstayed its welcome. Seeing the dependence of the company on these vehicles meant a quick spike in gas prices would have a multiplying effect on a trend that was just waiting to be put to pasture. If the market shifted to smaller vehicles - even if overall industry volume stayed the same (which it didn't) GM was screwed. The only way they could have avoided bankruptcy was if you aligned all the best-case scenarios and froze that moment in time infinitely.