GMAC's mortgage branches took a bath when the housing bubble burst, but I seem to remember reading that before that point, GMAC was more profitable than the automotive manufacturing sectors of GM. That would explain a significant part of the reason why GM is now often referred to as Government Motors due to the bailouts. It doesn't explain why bankruptcy reorganization was, by Obama's own words, "not an option" until after the company received billions in taxpayer money. Those funds basically vanished within a period of a couple months. Then, and only then, bankruptcy reorganization was the only option according to the current administration. It has effectively become a nationalized American company. Hugo Chavez quipped that Obama was farther left than he was when this happened. ...and none of this explains why Chrysler required the same method of bailout handouts before bankruptcy.

The big three had caught up with the import brands in the product quality department within the last 10 or 15 years. For the most part, they weren't able to overcome the cost differences in the respective workforces, and when the consumer has a choice between two products that are equal in quality, but one costs 10 or 15 or 20 percent more than the other, more often than not, the less expensive product is the one that is purchased. Paying a workforce middle class wages and benefits while also paying the same wages and benefits to employees idled during downturns, and paying retirement benefits that in some cases have exceeded the income of a worker during the time frame he or she was actually working and producing for the company are the reasons why American car companies lost the battle with the imports when the consumer went shopping for a new vehicle. That was magnified when the consumer discovered the products really were quality products at a good price, and brand loyalty shifted for millions of Americans.

I found it rather odd when I needed to rent cars several times last year at the Detroit airport, and my only choices for compact cars were Kia's and Hyundai's. ...in Detroit! Apparently the bailout money did nothing to put GM or Chrysler into a position where they could meet or beat fleet pricing in their own back yard.