Actually I think there were several reasons for the failure of GM. First, I think the union got greedy and made excessive demands. The company caved to the demands many times over the years which frankly only delayed the inevitable. The bad economy has driven down car sales at the worst possible time.
In way of explanation, the car companies are obligated to pay early retirement medical care. There is a surge of retirees from the boomer generation right now, so health care expenses are very high. When the boomers got old enough they would qualify for Medicare and the payments made for early retirement health benefits would be reduced down to a manageable level
We had a perfect storm of bad economy, high fuel prices (last year prior to economy tanking completely) and high health care and retirement costs. If they made it through the high health care costs, they thought they would be home free. New employees (who replaced the boomers) would be paid reduced starting rates which would further assist their financial position.
Obviously their plan for survival was risky at best. The auto workers should have accepted more reasonable pay offers and they should have funded their health care and retirement early rather than out of current profits. In short, they got too greedy. But they are simply a reflection of American mainstream financial thought and practice. Consider Medicare as their fall back position: That system is in deep trouble also as a result of poor planning and inadequate funding.
