Seven reasons GM is headed to bankruptcy

"It was a function of the marketplace at the time," says Toprak. But rebates killed residual values, meaning new car buyers would see the value of their GM car erode faster than foreign brands.

And GM's heavy incentives skewed its marketing into promotions for the deal, not the cars.

"If you're constantly advertising the deal, and the car is in the background, that's not a viable strategy," Toprak says.

3. Killing the EV1 electric program

Wagoner said his biggest mistake was killing the EV1, the company's pint-size electric car that was in test fleets in the late 1990s. It was a public relations debacle when the test cars had to be reclaimed and GM then scrapped them. But the real loss was scrapping the program behind them. GM abandoned a big lead in electric car technology and let Toyota take the green mantle for its hybrid Prius.

Now, GM is scrambling to regain the lead, promising its plug-in electric Volt will be on sale at the end of next year.

Al Benchich, a retired union president, says with the failure of the EV1, GM squandered the opportunity to keep the U.S. a dominant manufacturing force in a greener era.

"We have the people and the skills to do these things, and there's no reason we can't be doing it," says Benchich, who watched membership in his local United Auto Workers shop shrink from 2,800 13 years ago to about 500 today. "We could've been building this kind of stuff for a while now, keeping plants open and keeping people working."

4. Selling control of GMAC

For years, the ongoing joke was that GM was a bank that happened to make cars. Quarter after quarter, year after year, GM's financing arm, GMAC, pulled in way more revenue than its automotive operations.

In 2006, facing a cash crunch, GM sold off 51% of GMAC to private-equity fund Cerberus for $7.4 billion in cash and another $6.6 billion in staggered payments.

"That was a huge mistake," says Pat O'Keefe, managing director of turnaround firm O'Keefe & Associates. "GMAC was the financial strength of General Motors. … GMAC was a cash cow."

Although GMAC ran into problems with its mortgage unit in the housing crisis, keeping control could have helped GM weather the slide in auto sales last fall, O'Keefe says.

During the credit crisis, dealers saw their GMAC financing for inventory revoked, and about 25% of potential buyers couldn't get GMAC car loans.

In the past, GMAC could have extended loans with a "wink and a nod" to help keep dealers stocked with cars and keep financing loans, O'Keefe says.

But once GM gave up control of GMAC, it lost that flexibility.

5. Ignoring Jerry York

In the fall of 2005, billionaire investor Kirk Kerkorian bought up 10% of GM's shares, making him the company's largest shareholder. He then pressured GM to take his aide, Jerome York, as a board member, and tried to force GM to partner with Nissan and Renault.

Although the Nissan/Renault marriage failed, York showed some foresight.

In an early 2006 speech, he spelled out what he thought GM needed to do to right itself: Be more realistic about market share and revenue expectations, cut excess products and brands, sell or close business units that weren't making money and take what he called a "clean sheet of paper approach to the business," looking at everything in the company with fresh eyes.

Most important, all of it needed to be done fast.

"Time is of the essence," he said.

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