GM doesn't innovate automotivewise? Heck - my '87 Celebrity had distributorless ignition. Honda didn't have it until the late 90's, and even today, I believe a few Toyotas don't either. GM innovated fuel injection (back in the 50's on the Corvettes), automatic transmissions (Far ahead of the rest of Detroit and still better than the Japanese), EFI, air bags (I believe were in fact a GM invention), instrumented crash testing, etc etc etc.
No doubt the Japanese build a world class car. But GM can (and has) done so also. And frankly, if you've ever looked at a Honda automatic transmission vs a GM, you can see it in the design - GM is simply ahead of the Japanese (though Toyota's autos are darn good) in transmissions still (I won't get into the horrid Nissan ones, which are junk, IMHO). GM's running the radiator fans off of the computer's inputs (which lets the do all sorts of fun things to control them), Honda even today has those nice thermostat switches that wear out, drift, and break.
I won't get into Honda dealers - the ones out here are barely a notch below BMW on the jerk scale.
Oh yeah, why the heck is it, that in this day and age, Honda *still* can't come out with a timming belt that can be trusted beyond 60,000 miles, and why do they *still* use the horrid water pump setup where if the pump leaks, the timming belt's in serious danger of slipping or breaking?
And don't get me started on what an obsolete crappy hack VTEC really is. Everyone else firgured out how to do real variable timming years ago.
Toyota? They might surpass GM. But I suspect they'll ultimately not be #1. Right now, they're putting their eggs in the gutless wondercar basket (which, besides their excellent pickup trucks, is about all they're good at).
What's going to REALLY be a problem for Toyota, at least in the US, is simple: The average age of Toyota ownership is increasing. Nobody wants to be seen driving an 'old peoples car' - that's what killed Oldsmobile and Buick.