Take a lesson from Britain. The government bailed out Rover (in various incarnations)repeatedly. It didn't save it. GM is failing because it is losing market share. It is losing market share because the customers prefer to buy elsewhere. The imports (including "domestic imports") are gaining market share because they are building cars people prefer to buy.

I don't know if there's been any improvement in the last 7 years, but the last US GM car I had the misfortune to drive in '98(Pontiac Grand Prix) was so far behind the equivalent European/Japanese car in design (underpowered, bad ride, no interior space, poor ergonomics)and manufacture (uneven gaps between panels, boot and bonnet not flush, big gaps in the trim inside, poor fitting carpets, and don't even mention the rattles) I was surprised GM had the nerve to take money off people for it (and even more surprised that anyone would give them money).

Appeals to patriotism and subsidies might drag out the agony, but unless GM can produce a car a well-designed and well built as a Toyota, the customers will continue to buy Toyotas in preference.

BTW if you want to know what happens when the state decides what gets built, look no further than the Trabant. Not a pretty sight.

nick