General Motors, once the world's industrial colossus and pre-eminent automaker, appears primed to embark on a course that could be perilous both for itself and the country.

The Detroit automaker's decision to file for Chapter 11 bankruptcy reorganization protection is expected to be announced tomorrow by company officials and the U.S. Treasury Department.

Meanwhile, the company has pulled together many of the pieces needed to complete government-ordered restructuring.

Last week, the troubled automaker signed a cost-cutting deal with its main union and announced it would reopen a closed plant to build the next generation of small fuel-efficient cars in the U.S., rather than China.

But its offer to bondholders to swap $27 billion in unsecured debt for 10 percent of the company's shares fell apart, and the government stepped in with a new offer that includes a Chapter 11 filing, 10 percent of the shares and the chance to buy 15 percent more. The deadline for bondholders to accept that deal was 5 p.m. yesterday, or they could get a lot less.

Early yesterday in Berlin, Germany's finance minister said a plan was approved for Canadian auto parts maker Magna International Inc. to move ahead with a rescue of GM's Opel unit.

GM has lost $90 billion since 2005. Its market share has shrunk to around 20 percent, the result of losing about 1 percent annually since the late 1990s. Late last week, the company stock was selling for less than $1 a share.

Under terms of the bankruptcy process, GM hopes to get in and out of bankruptcy in speedy fashion. The Obama administration says it will likely take 60 to 90 days to get the proceedings completed successfully.

The plan calls for GM's "good assets" to be bought by the Treasury Department for about $30 billion and used for a "new GM," consisting of the company's four so-called "core" brands -- Chevrolet, Buick, Cadillac and GMC Trucks.

Meanwhile, the "bad assets" of the "old GM" -- such as the Saab, Saturn, Pontiac and Hummer brands, which all are scheduled to be closed or sold -- would be left behind.

"It's amazing. It's huge," said independent auto analyst Tom Libby. "I did not think this would happen at all until about six months ago. That's when they turned the lights out and the industry pretty much stopped."

For those who recall the good old days, it's hard to overstate the contrast.

"If you look over the whole 20th century and the position of General Motors in the '50s, '60s and '70s, it's an amazing fall," said Mr. Libby.

At one point, General Motors was so big that it controlled between 60 percent and 70 percent of the auto market, which prompted talk of antitrust actions against the company. There was even speculation that its Chevrolet division alone was powerful and successful enough to be its own company.

But that was then.

What got GM into so much trouble that it came to this point?

To many industry analysts and even some candid GM insiders, the credit crunch, dismal sales and bad economy did not put the automaker on the road to bankruptcy, they just paved the way for it to happen. The sources of GM's troubles went back many years, sometimes even decades.

"This didn't happen overnight," Mr. Libby said. "It's not like decline hasn't been happening for awhile."

Observers point to policies and actions that include over-reliance on sales of sport utility vehicles, on designing cars that were too similar in style and stayed on the market too long, and on not taking the threat of imported cars seriously decades ago, along with a failure to act quickly when new market niches emerged.

"Certainly the rise of the Asians in this country impacted them and, at the same time, the domestics failed to rein in their labor costs," Mr. Libby said.

"They had a slowness and lack of competitiveness with the Asian car companies in terms of product development. The Asians grabbed the leadership in several areas, and GM let them get ahead of them in hybrids and crossovers, for instance."

Analysts said the legacy of heavy retiree health care benefits and pension costs, and federal safety and fuel economy mandates that were largely unfunded over the years played a major role in weakening GM.

"GM loses $2,300 per vehicle in terms of overall profitability, while Toyota makes a profit on the average of $1,500 a vehicle," said Antony Davies, a business professor at Duquesne University. GM has an average plant utilization rate of 85 percent, while Toyota has an average rate of 107 percent because its workers are doing overtime, he said.

The average labor cost -- which includes legacy costs, pensions, health care and other items -- is $73 per hour at GM, and $48 an hour at Toyota, Dr. Davies said.

Events that took place in the 1970s and 1980s may have precipitated the company's decline in earnest.

Right after the 1974 gas crisis, GM decided to downsize its entire fleet of cars. The new models were introduced in 1977.

As things turned out, the downsized Chevrolet Impala and Caprice were pretty successful, and not many people seemed to mind the more nimble, better-looking, sportier cars.

But Buick, Oldsmobile and Cadillac were attacked for being look-alike cars. Before that, each of the three had lengths that reflected their status in the GM hierarchy. Now they were all about the same size, and the only distinction was in grilles, taillights and a few interior trim pieces.

They did attract some buyers, but the damage to people's perceptions of these three brands was almost irreparable.

That point was brought home a few years later by a commercial made by a competitor: Ford Motor Co.

"It was called the valet commercial, and it was the mid-1980s. A valet was asked by a couple at a club to get their car, and three times the valet got it wrong because the cars looked alike, and the couple was getting madder and madder," recalled Mr. Libby, who worked at Ford at the time.

"The tag line was something like, 'If you want real luxury, buy a Lincoln.' "

He added, "Roger Smith, who was CEO at GM at the time, telephoned Donald Peterson, CEO of Ford, and said, 'I'd appreciate it if you would take that commercial off the air.' And it was taken off the air."

Why had the downsizings enraged consumers and auto writers of the time? It's easy to understand, analysts said.

For decades, U.S. auto consumers had been weaned on GM marketing maven Alfred Sloan's model: You introduce several car brands, each for a certain level of income. You give them completely different looks and move people from Chevies to Cadillacs over their lifetimes.

That model worked for decades. Along with the fact that GM cars were considered more stylish than those of its competitors, the business strategy helped General Motors retain market shares that dwarfed everybody else's, analysts said.

During the 1980s and 1990s -- while GM was still relying on the Sloan model without supporting it with brands that looked different -- consumers' buying patterns hardened against domestics.

They embraced the far simpler marketing/dealer approach used by Toyota, Nissan and Honda.

All of those brands had one mass product and one upscale/luxury brand to offer. And all of those cars were sold in far fewer dealerships than the domestics, and each of those dealers was more profitable because it was responsible for much more territory, analysts said.

Meanwhile, the domestic automakers, including GM, were saddled with many dealerships that often were no more than three or four miles apart.

Finally, as Chrysler and now GM face bankruptcy, massive cuts are at last being made. There will be 789 fewer Chrysler dealers and almost 1,100 fewer GM dealers left, should both companies survive bankruptcy.

"What does need to be done now by GM -- if they survive -- is to put together a product portfolio that people really want to buy across the board, not just a few models," said Jack Nerad, editorial director for Kelley Blue Book. "Chevy Malibu and Cadillac CTS are world class, but it needs to be done for all their lines."

And along with that, "They need for consumers to understand and accept that they are building world-class products. Recently, when GM has been doing that, the public has yawned and said, 'We don't really believe that,' " Mr. Nerad added.

The big question now is whether GM will get the chance to rebuild, and even more important, whether the national economy will be in a position to help it succeed.

Because of a series of chain reactions within the economy, a bankruptcy process lasting longer than three months for both companies could trigger layoffs and firings that would affect more than 1.3 million jobs by year end, according to the report by the Center for Automotive Research, based in Ann Arbor, Mich.

The job losses would include sectors that, on the face of it, seem to have little to do with automobiles. These include 28,150 education jobs, 68,230 health care and social services jobs, 286,780 professional technical and similar jobs, and 201,100 retail and wholesale trade jobs -- all lost just this year, the report said.

In addition, there would be a $68.7 billion loss in personal income -- money people use to pay for expenses and buy cars, the report said. In 2010, it projects an additional loss of $26.4 billion.

Even if both GM and Chrysler have smooth bankruptcies settled within three months, the center calculates 63,200 jobs will be lost nationwide, and personal income will drop by $3.4 billion in 2009.

"Chrysler is so small compared to GM that Chrysler's having a successful conclusion probably wouldn't have too much impact at all on the numbers in the study," David Cole, chairman of the center said.

"The more serious issue is that if [the GM bankruptcy] gets away from everybody during the proceedings, it could drive the economy into a depression because of the speed with which things can occur."

"The thing that we are most concerned about is a collapse in the supplier sector," said Debra Manager Menk, project manager at the center. "They've been squeezed by prices, rising costs and lower revenue for quite some time now. They don't have a lot of give."

Just last week, two industry suppliers filed for bankruptcy.

The loss of suppliers would mean a 50 percent reduction in production during the last half of the year for Ford and the imported car makers that have plants in the United States because they won't be able to get parts. Prices of imported cars could go up 15 percent.

Speed may be of the essence but that won't make it happen. There are many players in GM's drama that could lengthen the bankruptcy process, and even set the company up for failure.

Ultimately, that is what many auto analysts fear. With the federal government owning so much of GM, the company once known for innovation, style and pioneering technology may find that it is no longer in the driver's seat.