When corporations like GM and FORD admit that they are unprofitable, why does the gov't feel justified in investing in them and proping them up?

I think it's fairly simple: politics. GM and Ford employ a lot of people; were one or both to go under it would wreak havoc on Ontario's economy - and by extension, on the entire country's.

That, in a nutshell, is the danger that comes from allowing a corporation to grow too large.