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Would the Dow Dump General Motors?

Then there's Bank of America (BAC), Citigroup (C), JP Morgan Chase (JPM) -- all received help in some form, whether it was the purchase of their commercial paper or the extension of cheap credit.

At this point, it's not clear if the government will be willing to take on the horribly mismanaged automaker. It's one thing to save a financial firm that continues to make money and another thing to rescue a business that for decades has been unable to control labor and legacy costs or deliver a product that consumers want. GM could be allowed to declare bankruptcy.

Lehman was not deemed too big to fail, and it had assets of over $600 billion.GM clocks in at $111 billion in assets.

Bankruptcy could result in a better, leaner company. The airlines know all about recovering from bankruptcy. And perhaps, later down the road, GM could re-enter the Dow once it gets its act together.

General Electric > (GE) knows that game. It' been kicked out before.

But for some reason nostalgic Americans refuse to let the carmakers take a hit and learn from their mistakes. A bailout seems to be preferred. It worked so well for Chrysler.

Is it important to the Dow editors to keep an auto presence in the index?

Ford's in no better position than GM. Chrysler's not an option since Daimler (DAI) sold it to Cerebus Capital Management. And since the Dow is meant to be a barometer of the U.S. market, Toyota (TM - Get Report) and Honda (HMC - Get Report) can't be considered.

Then again maybe they should leave a bankrupt company in the Dow. It might be the most accurate barometer of the market yet by tracking all the blue chips that have gone bankrupt.
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AIG $55.82 0.00%
AXP $65.43 0.00%
F $13.56 0.00%
GM $31.80 0.00%
HMC $26.96 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

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