There is a middle ground between bailout and a liquidation - a bankruptcy reorganization. It would probably wipe out the shareholders and the debt holders, and some jobs and factories, but a lot of GM and its brands and factories would live on.
As stated elsewhere, the great danger is that a reorganization would fail due to tight credit markets.
In a normal economic situation, a GM bankruptcy would be good news. The company could be held in trust, re-organize itself, and become profitable for (some) creditors.
Right now, credit is tight, investors are skittish, and government resources are stretched. It's not that GM is too big to fail. It's that GM is too big to fail right now.
Opal, their major EU brand, is profitable. Like BMW brought us the mini-cooper, a GM bankruptcy could bring us tiny turbo diesel cars that get 50+ MPG and run forever with non-chintzy interiors.
I know I'm dreaming. This money is going to be spent selling us the hummer H4 until gas hit $8/gallon, but there are entirely profitable segments of GM that could be swallowed up wholesale. The wealth-incinerating assets should simply die.
