How would you like to compete with a business that has infinite financial resources, privileged access to the biggest customer in the business, and the ability to pass laws to give them a marketing edge.
If the government takes an equity stake in the big domestic auto makers this is what the other auto manufacturers face. And even if Toyota, Honda, Kia, BMW, Mercedes and others are owned offshore they still employ hundreds of thousands of American workers who will be placed at a competitive disadvantage.
There are changes that need to be made but it is hard for me to envision how government owned industries is going to be a good thing in the long run. With ownership comes control, and the government shares are likely to be more politically driven than market driven (pardon the pun). And when the market does not support their political business vision, they can just pass laws that inflict the environment they want to sell in rather than the market you want to buy in.
Government owned industries have been a disaster and the growing economies have gotten rid of them.
We are going in the wrong direction.