I don't think its a body blow to the country. It might be a body blow to the guys working in the car industry.
Car industries, in most countries in the world, are a net negative... a black hole. No matter how many people are employed by the car (or indeed, any) industry, if at the end of the day its not a profitable industry, it just means that everyone else across the country is paying for those guys to have a job. I accept the social benefits in providing things like health care and unemployment benefits when people need them... I don't accept the idea that some industry is "vital to the nation" if at the end of the day, we're all worse off for its continued, hand-held, taxpayer-funded existance.
If I recall correctly, this is the first year that Toyota have made a loss since 1950 or so. I think Nissan also recently announced a loss, their first in several decades (again, not certain of the figures). Compare that with Ford and GM, who basically haven't made a PROFIT for decades... the head of the Automotive Union telling everyone that the financial crisis is the cause of their dramas is so deluded its laughable.