My rescue GSD has a shady past, shady genetics, and was used to pump out puppies every time she went into heat. No one could handle her when she was about 2-3, so they gave her to some 18yr old girl who breeds shady pups herself. Low and behold, she couldn’t handle her either after she dropped a litter. I took her in, and she was aggressive. Tried attacking me on a daily basis for the first 2 weeks. I came here looking for advice, and heard a lot of “give her up” and “put her down.” I’m sure I got in a few arguments with Chip over her. She was genetically broken, no one could train her, etc. I’m glad I have a bolt of stubbornness in me, and his arguments made me stronger in working to get her rehabilitated. She has worked through many of her issues, and work around some of them. I had to find that balance. She will NOT allow anyone into our home without acting aggressively, so when we know people are coming over, she goes in her room. Once the people are already in the house, she’s perfectly fine with them. I learned there are things that aren’t acceptable (lunging and trying to attack anyone near that she doesn’t know), eating off the counters (she was starved prior to me getting her), snapping half your hand off when offering a treat. I could go on and on, my point is, training AND management of traits (either genetic, or caused by her previous environment) that cannot be trained away go a long way. I still have her, and in all the years I did, she bit one person. Twice. That person was arrested shortly after I moved for serial rape, and the death of 1 teenaged girl. Take what you will away from that.
As for herding, I have to disagree with chip again. My poorly bred and poorly raised GSD herds like there is no tomorrow. Whether it be children, chickens, pigs, goats, or sheep. She instinctively knows what areas to nip at, and exactly how much pressure she can apply. We let her herd the animals, and nothing but joy shows through. We lock her up when the children outside as a precaution. She will run after them and nip their ankles, and won’t stop until the are all in a circle she can maneuver around. She’s been “trained out” of herding children, but it’s not something I would ever trust 100%, so we manage her in that situation instead so there is no setup for failure.
She’s now declining in health very quickly, and it’s heartbreaking, but I would do it all over again in a heartbeat. She became a very loving and obedient companion once I got her through her fear aggression. She is amazing, and taught me more about myself than about her breed.
OP, an incident like you described is pretty scary. For both you and your GSD. You just need to sit yourself down, ask how much time, money, and muscle you can put into training, and whether that is something you can afford (on all fronts, not just monetarily). If you can’t, it’s a happier life for both of you if you can put him in the hands of someone who can. A fearful dog is an unhappy dog, and an unpredictable one at that. Don’t let senior members on here bully you into thinking euthanasia is the only option. Like others have said, get a full vet workup, a great training, and have a come to Jesus talk with yourself to make sure you can and will follow through with the training at home, and make sure you both are getting a great quality of life in the end. I wish you luck, it’s a long and hard road, and emotional as ****.