The US auto industry was wildly successful for half a century because of the historical accidents of absurdly low gas prices and zero competition. That, and a culture that rapidly integrated the automobile into community planning, evolving a society where personal transportation was essential, not optional. As everyone has noted, this did not always result in objectively good vehicles. Prosperity, ample resources, and a voracious domestic market made huge inefficiencies possible--and profitable--in the short to medium term. Among these were a bloated manufacturing segment including a labor model that was ultimately unsustainable, and a culture that discouraged real innovation at the production engineering level in favor of sheer size and more of the same.
The literature about the rise, fall, and rise of the US auto industry is pretty voluminous, and it mostly agrees on the basics. Inertia, greed, a total inability to read the tea leaves of the market, and sheer complacency nearly doomed Detroit. The odd thing is, now, American cars are well-built, well-engineered, reliable, and perform well in general use. Yet the image they have is still rooted in the dismal years of the seventies and eighties. I had a Dodge Aspen, a 1976 four-door sedan with a vinyl roof, that may well be one of the worst motorized conveyances every built. It was a perfect emblem of a dismal era. My other Detroit cars were a lot better, including a Buick Century, a Mustang GT, a Camaro Z28, a Saturn sedan, a Fusion Sport, and a Focus ST.
From the news I read, a big problem with Detroit is that their margins are only viable with SUVs and pickups, so even as they start to make really good midsize cars like the Fusion and Malibu, or even smaller cars like the Cruze, they can't make any money on them no matter how many they sell. They sort of dug themselves into a hole by betting the farm on those two segments, and they are very susceptible to oil price fluctuations, not to mention CAFE standards. One reason for robotic plants in Mexico is to increase the margins on cars that are not that profitable.
But there are pretty much zero American cars I'd consider buying today. Not because they're bad, but because Detroit simply does not make many if any cars that fit my needs. Small (or small-ish), powerful, nimble cars that are not RWD (living in northern Vermont, RWD for a daily driver is far more hassle than I want), with quality interiors and restrained styling, preferably with a manual transmission. It's why my current ride is a Golf R, and my previous car was a GTI. The Focus ST I had, an older generation admittedly, was "ok," but while the Focus has good dynamics in general it's, well, a cheap feeling car overall; even the new ones can't match the VW for "feel." The RS is wicked fun but as a daily driver, the refinement and usability--not to mention the restraint--simply isn't there. And pretty much anything else from the Americans that meets my criteria is either a pony car, and hence RWD or in the case of some of FCA's AWD offerings, weigh as much as a battleship and are hardly nimble, or a very expensive oddity like the ATS-V, which you can't get in AWD as far as I know (and even if you could, it's like $60k and has an interior more suited for a high-tech bordello than a daily driver).
God bless Ford for at least keeping the hot hatch flame burning, considering GM ditched the entire concept and we won't even talk about FCA; the Fiat 500 Abarth has its place I guess but, um, no. So I'm very happy with my Golf R, but looking down the road (because I love cars and yes, greedy American than I am, I do look forward to being able to trade up!) there's not that much I really would want to move up to. I would not want to sacrifice power, handling, quality, the right look, or utility, yet there's so little competition in the niche I like. I did have a WRX at one point, but while fun I'm pretty sure I'm not going back to Subaru any time soon, and anyhow, a STI is pretty much on par with the R.
Add to all of this the dying off of the manual transmission in the face of certification costs, fuel standards, automated driver aid gizmos, and the undeniable superiority of the performance of modern torque converter and dual-clutch automatics over even the best manual gearboxes. I've pretty much resigned myself to having to get some form of automatic as my next car, if I move up the food chain. Audi has pretty much ditched the manual for things like the S4 or RS3, BMW has the 340i xDrive as a non-RWD performance model with a manual but that's about it and who knows how long that will stay around, and Mercedes, well, effectively there are no manual Benzes in the USA other than one rather pathetic model. And really, right now only the Germans offer the whole package of car that I want. Nothing from the Japanese even stirs my interest, as it's either too weird, too stylistically loud, or too over done.