Both are still being killed by pension obligations to unionized workers.  As Kaus notes, GM's claim to have repaid its bailout is bogus, as there's still the $50 billion that the U.S. and Canadian governments put into the companies to save it from being sold for scrap.  He comments, "If Sarah Palin told a propagandistic whopper this big she'd be doing run back up to Wasilla by the press."  Meanwhile, he notes that because unions refuse to renegotiate pension obligations, we the taxpayers might be on the hook for another $10 billion.

As for the state of California, it's total due to its workers is staggering.  The NY Times reports that "an independent analysis of California's three big pension funds has found a hidden shortfall of more than half a trillion dollars."

Unions have their place, but the laws we have regarding unions are an anachronism. There's no reason to think that the model of union law created in the 1930s is proper today.  Unions, working the system that exists today, combined with inept management, bankrupted GM and Chrysler.  They are doing the same to California.  To save both governments and industrial companies, we might need to change the underlying rules of the game.