American car makers grew exponentially after WWII in an artificially boosted market. They had the equivalent of a closed marketplace, because until the 1960s and 1970s imports were a mere drop in the bucket of car sales. They had an economy with explosive growth overall, and a population of boomers itching to buy cars. They had an industrial base built up and magnified by WWII and the development of the military industrial complex of the Cold War, and they had, until the mid-1970s, a relatively benign regulatory environment.
Most of all, they had really cheap gas. In short, it would have been nearly impossible for them to lose money no matter how poor their decision making was. And as the legion of books about Detroit that are available can tell you, they did indeed make really poor decisions. Those bad decisions, though, didn't come home to roost until the 1980s or so, and then snowballed until the collapse of the last decade, circa 2007-9.
During the boom times, though, the infrastructure of Detroit was bloated, internally to the companies and externally, with the unions and the dealer networks. So much money was lost to friction, but it didn't matter, because so much more money was rolling in. When the margins shrunk--thanks to OPEC, regulations, changing consumer demands, globalization, etcl.--the friction stayed...the same. Oops. Stuff like high minimum wages, the infamous job bank (where laid-off union workers would be paid to essentially sit around doing nothing until new jobs could be found for them), health care costs for an aging workforce, pensions, massive corporate officer salaries, grossly inefficient physical plants, etc. all started to eat away at the profits. But most importantly, arrogance had made the big three unwilling--or unable--to see the change in consumer demand. They had, for so long, told people what they wanted, that they literally could not process the idea that consumers wanted something entirely different.
tl;dr, today's much more intelligent, much leaner American car makers are still suffering from the legacy of the past half century or more, which will take a long time to get out from under. Companies like Toyota, starting essentially from scratch in a bombed out Japan, were able to build infrastructures that were much, much leaner, and much, much more rational. The Americans were slower to get into fully robotic assembly plants, reluctant to spend money for long-term growth because short-term profits lured them on. Etc.
