Government policies were a part of the problem but a lot of Detroit area manufacturing companies were simply not very good at their jobs. They coasted on past success while being unresponsive to customers, and failed to improve on quality or productivity. This was primarily a management failure — only a true moron could approve production of vehicles like the Ford Granada — but the adversarial approach taken by most union leaders certainly didn't help. Union leaders were mostly corrupt and incompetent, acting to win elections and enrich themselves in ways that ultimately hurt their members.

The best thing the US government probably could have done to prop up the manufacturing economy in general would have been to spread knowledge of modern best practices, like those promoted by W. Edwards Deming. Plenty of people were willing to improve but simply hadn't been trained in how to do it. For auto manufacturing specifically, legislators and regulators could have phased in emissions and fuel economy rules more slowly to give manufacturers a few more years to react instead of forcing them to hastily modify old powertrain designs in ways that drove up costs and ruined reliability.