The Big Three lost the American consumer's trust back in the 1970's. It was something they never should have toyed with, and something they will never get back. When it comes to a manufacturing a product that the consumer has to take out a 4 year loan to pay for, the end result has to be fulfilled satisfaction. Anything short of that is going to turn existing customers and potential customers away. These companys need to go away and reincarnate as someone else's creation. Turning the Big Three into a government organization is only going to take care of the UAW employees who have only added to the problems of the Big Three for the last 50 years.
You are right. In the late 1970’s the quality of American cars, the brand loyalty and the market share declined. This is when the UAW leadership became much more leftist and militant. THe UAW went overboard protecting bad employees, preventing new investment and lowering productivity. In the late 70’s the UAW pushed for the 4 day work week, 20 years and out, paying people 95% of salary and benefits not to work and “shop floor democracy” etc. At the same time they got big increases in wages and benefits. Chrysler would have gone bankrupt in 1979 had it not received federal loan guarantees, closed many plants, lowered wages and greatly reduced their workforce. Ford and GM closed many of their plants in the early 1980’s.
The UAW still maintains the culture it established in the late 1970’s. In the 1980’s Roger Smith at GM tried to change that culture by establishing Saturn, closing the unproductive plants and diversifying into other industries by buying EDS and Hughes. His actions which were ridiculed by Michael Moore in “Roger and Me” kept GM viable until recently. GM sold off EDS and Hughes at huge profits which financed the money losing UAW part of the business.