With calls for yet another government bailout, right after the last one, it’s hard for Americans not to be really frustrated about the state of the domestic car industry. I’ve been watching its decline my entire life. It’s kind of like watching the slow decline of Sears (starting maybe a decade later), which was so big and dominant, it’s taking a very long time, but when it comes the end may be pretty ugly.

For a business starting out so high on the totem pole, it can be quite a challenge to acknowledge a severe turn of events. This happened in the car biz by the late 1960s, but I really think Detroit is still - after four decades - in denial. They’ve never had their Sputnik moment, their Pearl Harbor or 9/11. Instead, they’ve been like the frog in the pot that’s slowly warmed up.

Congress has made sure the frog stays reasonably comfortable, but for how much longer? American cars have improved quite a bit in recent years, but do GM, Ford & Chrysler get it yet about how relentlessly competitive the auto biz is nowadays?

They need to entirely overhaul their company cultures, because it’s not going to get any easier by just surviving to 2010 or whenever. Detroit automakers must get rid of their quick-fix mindset and adopt company cultures that embrace continuous improvement and place engineering & quality above marketing. Otherwise all the king’s (president’s?) men aren’t going to be able to put humpty-dumpty’s brand back together.

Zappos.com CEO Tony Hsieh really hit the nail on the head recently when he pointed out that a company’s culture and its brand are really two sides of the same coin (Video, quote at about 9:20). Detroit doesn’t seem to get this. Unless they overhaul their entire businesses, then their brand message is never going to stay aligned with reality for long.

Cadillac is just one example. Way back in 1990, the GM division won the Malcolm Baldridge National Quality Award, and appeared to be on its way to establishing a quality reputation for its product line. Sadly, the other day I was looking at the current Consumer Reports, and several of Cadillac’s most prominent models are listed as not recommended by CR because of less-than-average reliability.

Maybe today’s Cadillacs are quite a bit better-made than those of a decade or two ago, but so are Toyotas, not to mention Hyundais and even Kias. Consumers are smarter, too.

I know there’s some folks in Detroit who’ve been working really hard for a long time trying to make things better and I’ve been rooting for them as much as anyone, but until the leaders there get past the idea of just surviving the current crisis and start thinking strategically, any government bailout is probably just money down the drain. It’s the culture that’s got to change.