The UAW must be worried. They're going to be like a parasite that kills the host if they're not careful.
The fact is that GM will never be profitable in the future because its labor costs are so much higher. Does anyone think GM can become 3x as efficient as Honda, Toyota, etc.? It's a credit to American ingenuity that they've held on for this long.
Many people like the idea of institutionalizing things. Like, I've done this and I work hard, therefore I should be set. That happens a lot in Europe (although it's lessening as EU laws become more competition-friendly). It sounds great and works for a while, but then this happens and you're left with two options: the poor-house or convincing people actually producing value to support you in a welfare-with-pride sense.
The problem is that life changes. GM agreed to contracts with provisions like offering x% of salary for the rest of an employee's life as well as covering their healthcare. Well, that was fine until Americans started living longer and that became a ton more money. On top of that, we have decided that it is inhumane to deny someone even the most cutting edge health care. That's fine, except that it means health care providers can charge anything they want since it's a violation of rights to deny it. No matter how marginally effective, no matter what the cost, people should get it. I'm not saying this is bad. I'm saying that it's ridiculously expensive and that it used to be more acceptable for people not to have access to the most cutting edge health care. In fact, it's the mark of a successful society that people want to continue living so much!
So, GM has agreed to those and it's way more than they budgeted and put away for. Not only that, it's likely to raise way faster than inflation as people shift spending to things like health (from consumer items which haven't spiked as much in price) and live longer. No one in their right mind would buy into that.
What will most likely happen: GM will file for bankruptcy. A lot of its labor contracts will be nullified. Someone will buy GM sans the labor contracts.
Time to start producing the kind and amount of cars the market demands, not the kind and amount agreed to in the last union contract renegotiation.
I kind of hope the bailout doesn't happen and the "big 3" are split up and sold off into many smaller, more innovative car companies like the early days of car manufacture.
General Motors, like all US car companies, has been content to survive off of government subsidy, and has been so intransigent that they successfully fought back all attempts to force them to create modern products, improve fuel efficiency, or otherwise invest in research and development. Now that the market has shifted from beneath them, the management is whining that they can't create new products fast enough to meet the "unanticipated" change in demand. They think they deserve new subsidies to rescue them from the consequences of their own bad decisions.
The UAW can be greedy, and has certainly played a role in this, but I'm not eager to blame the auto workers for wanting to be paid a living wage when the management team has been systematically destroying the company around them.
The rest of the 'loss' was simply a change in the accounting rules regarding how they valued pension and healthcare liabilities. So if you consider that $40-billion-or-so accounting change to be a loss, it was actually an accrued loss over a long period of time that was simply reported all at once.
On the more general topic: I'm not a fan of bailing out companies either, but one has to be pragmatic and consider whether letting such a huge part of the nation's workforce become unemployed in an already-bad economy is wise.
I think the better solution would be to let the companies go bankrupt, then create a massive program to retrain and re-employ the workers elsewhere (with unemployment pay contingent on showing up at training). The companies would eventually emerge from bankruptcy much smaller and healthier. This would allow them to focus on their electric car initiatives, and it would also allow them to fail without such dire consequences should they do so in the future.