The issue isn't so much that GM and Ford do not make fuel efficient models, the issue is they put no effort into their fuel efficient models. You cannot look me in the eyes and tell me the Focus was given the same level of effort that Ford put into the Mustang or F-series. You cannot tell me that GM put the same level of effort into the Cobalt as they put into the Silverado or Malibu. Chrysler's problem was that they abandoned the segment altogether and their replacement did not have the level of effort that Dodge has put into the Ram.

Now having said this the Cobalt and Focus still sell well, the issue is they are not very profitable. The issue is they need to figure out a way to make these cars more profitable without cutting on the already poor quality. They need to offer Mercury and Buick variants except this time, do more than make it look uglier and add ridiculous amounts of fake chrome. They need to put in an effort that will make people actually want to buy a car of this size. They need to improve the comfort level, cut down on the noise level, offer interior that is just as good if not better than their larger models, has all the options of the larger models, features the industries best technology (six speeds only, GDI), performance versions hopefully with AWD to compete against the Evo to prevent them from being viewed as lame, and still gets excellent fuel economy.

Flex fuel isn't the answer unfortunately. If it was the Big Three wouldn't be in this mess. Ford has quite a few actually. The Crown Vic, new F-series, Expedition, etc. Before this they had one with the older Taurus, Ranger 3.0L, Explorer, etc.

Dodge has it with the mid-sized version of the 2.7L, the 4.7L V8, the 3.3L offering in the minivans.