Editor's Note: James Quinn is a senior director of strategic planning for a major university. James has held high-level financial positions with a retailer, homebuilder and a university in his 22-year career.

General Motors (GM) was founded in 1908 in Flint, Michigan and grew to be the largest corporation in the world. In 2000, its market capitalization was $50 billion; in the past week, that dropped below $1 billion - levels unseen since the 1920s.

In 1953, at the peak of its dominance, GM president Charles Wilson told Congress that what was good for the country was good for GM (and vice versa). And its fate still seems to parallel that of the nation as a whole.

GM’s market share peaked at almost 50% in the 1960s, and reached an historic low of 19.5% in January. Their sales plummeted 49% from a year ago. GM has too much debt, too much bureaucracy, too many plants, too many car lines, too many employees, and too many future healthcare and pension obligations.

After decades of mismanagement, the only way out is for GM to enter a pre-packaged bankruptcy, with financing provided by the US government if bank financing is unavailable. Shareholders and bondholders will be wiped out. They made a bad investment. Plants will be closed, UAW contracts restructured, management replaced, employees fired, debt written off, and future obligations reduced. A much smaller viable company that can compete in the twenty-first century would exit bankruptcy in a year or 2. A profitable, low market share is preferable to a high market share with billions in loses.

The decline of GM is a testament to how poor strategic decisions over the course of decades will ultimately lead to collapse. The United States has followed the GM model of failure for the last 3 decades: Too much debt, too much bureaucracy, too many government-supported industries, too many agencies, too many employees, and $53 trillion of unfunded future liabilities. Can the US avoid GM’s fate, or is it too late? If we can learn the important lessons of the GM decline, it might not be too late to reverse our course.

Or we can continue on the current path and follow the advice of Will Rogers: “If stupidity got us into this mess, then why can’t it get us out?”

Alfred P. Sloan created the concept of annual style changes to keep consumers coming back, along with a pricing structure for each of GM’s brands, from lowest to highest (Chevrolet, Pontiac, Oldsmobile, Buick and Cadillac). He was a pioneer who drove GM to become the largest and most profitable industrial enterprise the world had ever known.

In the midst of the Great Depression, Mr. Sloan -- a smart, realistic businessman unfazed by the Roaring 20s -- was able to keep General Motors profitable. Only an executive like Sloan would be able to speak the following words:

“If we are all in agreement on the decision - then I propose we postpone further discussion of this matter until our next meeting to give ourselves time to develop disagreement and perhaps gain some understanding of what the decision is all about.”