In this series, we take a look at the 25 stocks on the S&P 500 Index (SPX) that have turned in the worst performance during the past decade -- what went wrong, and what happens next.

General Motors Corporation (NYSE: GM) enjoyed the title of "world's largest automaker" nearly uninterrupted since 1931, with only a few irregular years marring its perfect record. Last year, GM found itself edged out not by its cross-town rival Ford (NYSE: F), but by its Japanese foe Toyota Motors (NYSE: TM).

A slowdown in auto sales is still pressuring companies across the sector, but Toyota's fuel-friendly economy cars -- such as the Yaris, Camry, and Prius hybrid -- have heightened the brand's appeal among consumers wary of high fuel prices. By contrast, GM manufactures the Hummer, flagship vehicle of suburban Earth-haters everywhere.

What went wrong? At No. 12 on our list of SPX laggards, GM shed 79% of its value during the 10-year period that concluded on June 30, 2008. The stock peaked at $94.63 in April 2000 before embarking on a lengthy downtrend.

So, what does it take to topple an auto giant? Through the summer of 1998, GM endured a strike by the United Auto Workers (UAW) that crippled production and forced dozens of plant closures. By the time the lengthy strike was finally resolved, it had cost GM $1.65 billion. (Simultaneously, the company recalled nearly one million vehicles due to an airbag defect.) In 2007, 73,000 workers hit the picket lines again when UAW announced its first nation-wide strike against GM since 1970.

But it's not quite accurate to chalk up all of GM's woes to labor problems, or even to rising gasoline prices that have spooked consumers away from new car purchases. Perhaps because of its age, or its size, GM has occasionally been slow to respond to shifts in the auto market. When kooky California regulators passed legislation requiring that 10% of all vehicles sold in the state be emission-free by 2003, GM's response was to lower the cost of a home recharger for its EV1 electric vehicle. It was a decision that failed to sufficiently enhance the EV1's popularity -- you'll be forgiven if you're asking yourself, "EV-who?"

A quick sampling of auto-industry headlines from 1999 is also revealing. Ford's industrial productivity was catching up to that of its Japanese rivals, said the New York Times, while GM made a 10-year commitment to underwrite the future film projects of Ken Burns. I like the guy's documentaries, too -- but really? So, perhaps it's none too surprising that GM was one of just a few auto makers to post a sales decline in March 1999, during what proved to be a booming first quarter for the industry. (The other laggards were Mazda and Suzuki.)

It could be argued, though, that GM's most fatal error during the past decade was its decision to enter the residential mortgage business. Through Ditech and ResCap, a unit of GMAC, the car company found itself with a foot in what appeared to be a thriving industry -- until the housing bubble burst, and the wave of foreclosures and defaults started to roll in. GM was already fumbling with baggage from its struggling spin-off, parts supplier Delphi Corporation, and the combination of the two nearly put GM underwater during the past year.

What next? With U.S. auto sales recently dropping to 10-year lows, one can imagine that the tone of GM's recent centennial celebration may have been more funereal than festive. Among the challenges the company faces are a slowdown in consumer spending, record-high fuel prices, and seemingly endless write-downs and charges from its business decisions gone bad. On the plus side, GM has been forced to overcome its stubborn nature and spring into action. It's now considering the sale of its Hummer brand, production of SUVs and trucks has been scaled back, and layoffs and cost-cutting measures have been announced.

Shortly after the company's shares fell to a 50-year low in July, CEO Rick Wagoner found himself staving off bankruptcy rumors. The chief denied that GM would seek to reorganize under Chapter 11, as its Delphi unit once did. Wagoner seemed to chide the rumor-mongers when he told reporters, "Obviously, it would be great if we had less speculation along the lines that we think is quite inaccurate."

Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the weekly video series Option Basics on SchaeffersResearch.com.