If GM transitions to nothing at all but electric and hybrid vehicles made at the lowest cost they can, they could turn things around fast enough, as that is by far the largest developing worldwide market in automobiles today
Smart cars and hybrids are clogging up the show room floor. In order for your idea to work the Federal Government would need to alter the fuel economics with a several dollar a gallon increase in the gas tax, which would be a very good idea.
Well, cars aren't selling well in general right now, and gas prices are low.
But it will take time to re-tool and reproduce cars for GM at any rate, so; there's a good chance that cars in general will be selling well in the future.
Also, there's been a lot of discussion of whether or not gas is going to rise in price again this year, as you know. If it does, interest in the more fuel-efficient vehicles will also increase.
There's no guarantee of any success for GM whatsoever, but there are at least possibilities which allow for it's survival.