GM's perfect storm

General Motors has been facing some devastating blows in the past year. Delphi, which was once apart of GM, has just filed for bankruptcy and GM is in $12 billion dollars worth of debt to them. Delphi is GM's largest supplier and if GM doesn't pay up they will go on strike. This is would be a crushing blow to GM allowing their competition to take their potential customers. Also, the Securities and Exchange Commission is investigating on GM is dispersing its money to health and pensions. This follows suit to GM's health and retirement costs. Since Asian automakers have no obligation to pay for health care for their employees they are able to save money. This is something that GM cannot compete with. With high gas prices, it is obvious that people are reluctant to buy SUVs and pickups which are its major source of income. This rolls into their weak sales problem. People are now buying more of the smaller more gas efficient cars made by Asian automakers.
What should GM do to try to win back their customers and avoid filing for bankruptcy? Should they make smaller cars to try and compete? Or make SUVs and pickups more efficient?