Remember when Chrysler was deep in the kimchee in the late 70s? The narrative was "we must save the jobs of the line workers, by bailing out the company". That was based on a false narrative: that people who could no longer buy a Chrysler product, would never buy another car, from anyone. Reality: people who could no longer buy a Chrysler, would buy from another company, mostly Ford and GM. While the 'jobs" at Chrysler would vanish,

I think you have melded this to your own biases. In the 70’s the Big 3 were threatened by Japan, who made surprising inroads in a very short amount of time, and yes, threatened American line workers’ jobs.

And yes, Chrysler management was stupid and made bad cars as well as bad decisions, but Detroit accounted for s very large fraction of the US economy, so the possibility of bad economic results - heaped atop the OPEC embargo’s disastrous economic results - was worth worrying about.

It is true that some of Chrysler’s sales would have gone to Ford or GM, but some (perhaps significant) portion could have landed at Japan (or Germany’s) doorstep. Chrysler alone was profiting from importing Japanese cars and rebadging them as “American” (Arrow/Cricket/Colt). In fact things were dire enough, if you recall, that the US “negotiated” a “voluntary limit” on Japan’s imports to smooth things over and give the inevitable time to play out. I say “negotiated” rather than “demanded at gunpoint” and “voluntary” instead of “extorted.”

It’s also worth noting that Michigan was considered a swing state at that time, having a Democratic legislature but a Republican governor. We remember Gerald Ford, the VP from Michigan, carried the state in the 1976 election - it was thought because he was a hometown boy. (Reagan carried the state in 1980, so it was a time of Republicans on the rise there.) There are often political components to such things, and it is impossible to divorce that from the decision made - under our system of government or any other.