Japan made better cars and were better managed. Anybody who has purchased a Toyota knows the difference in quality between any of the big three and Toyota. Plain and simple.
This analysis from Eric Perkins, a financial analyst hired by UAW under an agreement with Ford to provide an assessment so that both parties could understand the problems the industry faced in 2006:
I told the membership that the company was in terrible shape. They should prepare for the worst. There were flexible body shops only running one product. Money had been wasted on share buybacks and special dividends, rather than investment in new products. Purchased component costs (two-thirds of vehicle costs) were roughly $2,000 higher for Ford than for Toyota and maybe a thousand higher than they were at GM on equivalent vehicles, primarily because of lousy volume predictions at the time of product approval.
There was too much complexity in the design. Their time to market was two to three years longer than the Japanese and one year longer than GM. Ford had generated many innovative products such as the Explorer and the Expedition, but the success covered up underlying problems. Further, most of the Big 3 market share loss since 2001 had been at Ford, and this included the very profitable products such as Explorers, Expeditions, and even pickups—product segments Ford had once dominated. I said this company is on the verge of bankruptcy and they needed to make a radical transformation. Purchasing and design accounted for more of the problem than labor. I said that though we were only 20 percent of the problem, every penny counted. Many UAW members owned stock and identified with Ford. People thought of themselves as working for a great company—so it was a difficult message to deliver. (Cutcher-Gershenfeld, Brooks, and Mulloy 2015, 43)
Bottom line was though the business was riven with horrible management practices and sucked dry by Wall Street, the workers had to take pay cuts so that the company could survive.
No sir, the corruption and incompetence at Ford for example, wasn't due to workers or unions. Chrysler was managed even worse. GM was better but still in no shape to compete with Japanese car makers.