Given the above, I do not think GM has always been right. GM has been part of many morally questionable practices. I think GM was on a terrible course from the mid 1970's to the early 2000's[0]. Those diesel engines in particular were incredibly shitty. My dad was one of those guys who loved the idea of diesel and who got the stares and the smirks.[1]
In the early 2000's they started to try to change. It is very difficult to change a large organization like GM.[2] I don't think today's GM is the same GM from 1920, 1939, 1970, or 1990. If it was, I wouldn't work here.
Many say it would have been worth it to let GM die. Under circumstances other than the 2008 economic downturn, it might have been.
Much of the severity of the 2008 crisis was largely (immediately) due to shock related to the collapse of Lehman Brothers [3] and the refusal of anyone to take over those assets at any price.
Very few people worked for Lehman Bros. A LOT of people work in the automotive ecosystem.
Before bailing out GM, the govt and GM DID look around for other financing/buyout options. No one wanted to take that on.
The saying "whats good for GM is good for the country" is largely outdated nowadays, but many people still think that way, and the collapse of GM would have been psychologically devastating, as well as financially devastating to many thousands of people.
[0] The infamous "ignition switch" design process started in 1997 (Valukas PDF page 35). The Valukas report is very interesting, I recommend it for everyone who is interested in system design. http://www.nhtsa.gov/About+NHTSA/NHTSA+Electronic+Reading+Ro... (bullet 4)
[1] My family has owned a 80's VW diesel rabbit, an 81 diesel Audi 5000 (20 years old at time of purchase), an 80's diesel Suburban (terrible engine), and various diesel work trucks.
[2] GM is not a single organization. It is more accurate to think of all the external organizations such as: UAW-GM, GM branded dealerships (which are not owned by GM), GM Suppliers (which also supply other companies). Then there are all the internal organizations: GM Truck Manufacturing, GM Car Manufacturing, Global Brands, etc, etc, etc.
[3] http://en.wikipedia.org/wiki/Causes_of_the_Great_Recession http://fcic-static.law.stanford.edu/cdn_media/fcic-reports/f...
From the above: In addition, the government’s inconsistent handling of major financial institutions during the crisis—the decision to rescue Bear Stearns and then to place Fannie Mae and Freddie Mac into conservatorship, followed by its decision not to save Lehman Brothers and then to save AIG—increased uncertainty and panic in the market.