A bit of a long perspective as a foreign member of this board.
From a young age, I always associated "Made in USA" with quality. I suppose whether or not this was a correct assumption depended greatly on what the product was, but certainly as far as the automotive sector is concerned, I have had bitter sweet experiences with GM products. I wouldn't really consider myself a GM guy, and I'm not a big fan of Chrysler. So if it's an American car, it's a Ford in my book.
My family has a history of buying GM, and we've had many Oldsmobiles, Pontiacs and Chevrolets in our household for many years. Mechanically the vehicles have been mostly trouble-free, and given the only maintenance these cars had were mostly oil changes and carburetor cleaning, I consider that a very good thing. But what these cars offered in terms of durability, they lacked in overall feel and quality. I remember the most common problems we've had with all our GM B-Bodies - exterior door handles that would break ever so often, sagging headliner, sunvisors that kept dropping down on their own, cracking dashboard pads and interior door handles (to pull the door shut) that would come off unless the bolts were tightened every now and then. From a reliability point of view, I suppose these things are not considering so important. But from a satisfaction point of view, I think it goes a long way.
Competition is a good thing, and healthy competition helps us as customers because we are offered better products for competitive prices. But unfortunately, it's a survival of the fittest situation. A reputation takes years, maybe decades to build. But it only takes a fraction of that time to ruin.
Now because I'm not directly involved and because most of my assumptions are based off what I have read, my views may not exactly be accurate. But I feel capitalism has taken over the American automotive sector in more of a negative way. Obviously, these companies exist to make a profit and that is ultimately their purpose. But it seems little regard is shown for the other side of things.
Reading through Nick's post, the first thing that came to mind was the Liqui-Moly video someone posted last year. The owner/founder swore to sell his mansion before he would lay off anyone, even in the most difficult times. He spoke about the sentimental side of the business, and how it would be difficult to lay off somebody who has been a loyal employee for so many years. I feel this is something that's lacking in the American automotive sector. I'm not a fan of protectionism, but considering the government bailed out two of these companies from going bust, maybe they could return the favor though employee retention at the very least. I recently read an article on Liqui-Moly's website this week, and apparently they hired 500 more people over the last year.
As others have already mentioned, the major issue when buying a car, at least as far as regular cars are concerned, is "this is my hard earned money, I want to buy the best this money can buy." American offerings tend to be pretty generous as far as value for money is concerned. But if they continue their focus and pursuit of quality, and maybe market their heritage and history alongside their products, it would perhaps help in some way.