While the auto companies have certainly made poor decisions on the management level (letting hybrid tech slide by is only one of them), they can't be blamed for not being psychic, either. Who would have predicted years of low oil prices after the 70s crisis? Not me.

It's easy to look at the market solely from the consumer end, and not the manufacturing end. European and Japanese companies have always made little cars for their own consumption, and Americans buy them. Americans bought Hummers, too, which was something American companies addressed--there are a LOT of American car buyers. Note that the Ford F series pickup is number two on the list of fifty best-selling cars in the world.

Maybe one problem is that the American companies shift drastically back and forth between large and small cars, while Toyota just builds small ones. I don't know enough about the nuts and bolts of the business to analyze the details. It would great if you could turn a billion-dollar assembly line around as fast as a software company could rewrite a code, but it isn't that easy.

Another problem might be that the market isn't what it was when I was a kid. My Dad, who was anything but rich, would keep a car two, maybe three years, then trade it in on a new one. I think he still does this, although I think the cycle is longer. Modern cars, even American ones, are built a lot better than they used to be, and last many years. I have three cars (a Chevy, Honda, and VW Eurovan), but two of them are over ten years old and have well over 100,000 miles on them. We bought the Chevy used. I generally keep a car until all four wheels fall off. This can't be good for sales.

As far as labor goes, it isn't just outmoded wage and benefit packages that hamper companies. Labor has also fought automation and innovative production techniques for years, while foreign companies adopt them. The dockworkers strike out here a while back was largely about not automating freight handling systems.