Contrary to the image that many environmentalists have had that GM and other car-makers have not invested in more environmentally friendly vehicles, GM and their competitors have never stopped working on new powertrain technology. The disconnect comes when it's time to mass produce the new tech. While much of the new tech is still not ready for primetime, the company clearly could have been more aggressive in producing at least some technology (hello? hybrids?). They and others like Toyota also get a deserved black eye for fighting fuel economy regulations. Admittedly CAFE is not the best solution, but from the PR perspective they should be working more to tie new standards to changes in tax policy rather than just fighting the rules altogether.
[Source: Time, thanks to LS2/LS7 for the tip]