Pension plans work fine as long as they're managed properly. The problem with many companies (and municipalities) is that they either assumed unrealistically high returns (10% annual return is a common figure, where as the last nine years of stock market returns have averaged slightly negative), or they took profits on pension returns above the expected yearly average.

The latter is what has gotten GM and Ford into some trouble, as both saw above-expected yields on their pension accounts during the dot-com run-up in the late 90s, and both took the extra returns as profit instead of re-investing into the accounts.

 

Marketshare is one issue, but GM has outsourced and spun off a lot of parts of itself. They used to have over 1 million employees, but now its under 100,000 IIRC.