Simply accepting you're in the wrong location means moving, and you can't move a factory and all it's workers cheaply. Similarly, no one wants to automate their own job away, as that would result in them not having a job.
Granted, long-term that thinking kills companies, but short term it keeps the bills paid, the kids fed, and the beer cold.
From what I was able to gather it was less about being in the wrong location and that the internal politics of GM set NUMMI up for failure.
America was able to be a powerhouse of manufacturing during WW2, I remember reading that a lot of the DNA for JIT/Kaizen/Lean came from the Marshall Plan[1].
Granted, long-term that thinking kills companies, but short term it keeps the bills paid, the kids fed, and the beer cold.