The railroads had business at their door but were unable to run an efficient operation. By contrast, the auto industry has seen demand drop from 15M cars/year to under 10.

Also, the railroads were tied down to losing operations by government regulation. The auto industry doesn't have this problem yet, but mandatory CAFE regulations could have a similar effect.

The government can help auto industries by lending them money as a debtor in possession for a bankruptcy. If GM entered bankruptcy without government backing, no one would lend them money to restructure further and they would be forced to liquidate.

I am from Detroit and have seen how the UAW and the Big Three single-handedly created the middle class. But having worked in the Rouge Plant for a summer, I agree that people don't deserve to be middle-class for unskilled labor. The only way to break this view may be a bankruptcy.