DES MOINES, Iowa — The keepers of the Dow Jones industrial average are not eager to boot General Motors Corp. off the index of 30 leading industrial corporations, but that could change if the government gives billions of dollars to the troubled auto maker.

Yesterday, President Bush's spokeswoman, Dana Perino, said the administration was still working on details of a possible bailout for the automakers and wants to hear more from all those involved.

The responsibility of choosing the components of the Dow falls to Robert Thomson, The Wall Street Journal managing editor, who frequently consults with other senior editors at the newspaper and with John Prestbo, editor and executive director of Dow Jones Indexes.

Prestbo, who has helped pick the Dow stocks for nearly two decades, is chairman of the Dow Jones index oversight committee.

He said the extent to which the government chooses to bail out automakers could determine whether GM, which has been in the Dow since 1925, stays or is replaced.

"We're watching very carefully what the government does and the way in which the government does it," Prestbo said.

GM could follow the course of insurer American International Group Inc., which was removed as a Dow component in September, after the U.S. government agreed to provide an $85 billion emergency loan.

Prestbo said the "80 percent nationalization" of the company changed the index committee's perspective.

Driven to the brink of collapse from its exposure to subprime mortgages, shares of AIG had lost some 96 percent of their value, falling from just over $57 at the beginning of the year to $2.05 by mid-September when it was replaced by Kraft Foods Inc. AIG has yet to regain its footing; shares closed at $1.74 yesterday.

Kraft hit its 52-week high —$34.97 — the day after it was added to the Dow. Shares have since fallen, closing at $26.74 yesterday.

Why kick GM out of the Dow?

Its shares have fallen drastically, off 83 percent so far year, closing at $4.08 yesterday.

The decline of the auto industry is clearly reflected in the steep drop in GM's market capitalization. Valued at more than $50 billion back in 2000, the company is now worth just a fraction — $2.6 billion.

Despite those factors, Prestbo said GM still has a big footprint in the U.S. economy and it will stay in the Dow for now.

As a practical matter, dropping General Motors will not change the index much because it represents only about 0.38 percent of the Dow, said Bradley Kay, a Morningstar analyst. That's because the Dow is a price-weighted index, meaning it is only affected by changes in the stock price of listed companies. Other indexes may be affected by stock price and the number of company shares outstanding.

The Dow basically reflects the average of the stock prices of the 30 companies in the index. However, a mathematical computation is done to adjust for dividend payments, stock splits and other corporate actions to ensure the continuity of the average.

The bigger impact would likely come from the company selected to replace GM, if and when the time comes. If the Dow adds a company that has a much higher stock price, for example something trading around $70 per share, that company will suddenly represent perhaps 5 or 6 percent of the index.

The other issue facing the Dow if it drops GM is who'll replace it. Certainly, no U.S. automaker is likely stable enough to take GM's place, Kay said. Toyota can't replace GM because the index has traditionally listed only U.S.-based companies.

Ultimately Prestbo said every effort is made to keep the Dow's listings consistent and changes aren't made lightly.

Prestbo said there is no formal criteria for inclusion on the index although lots of numbers are reviewed.

He takes issue with critics who have said the Dow is not representative of the broader U.S. market because it's only 30 stocks.

"I disagree because they're the right 30," he said. "We work very hard to make sure that the companies we select are representative of not only of their own industry, where they have to be a leader, but they have a prominence and economic significance above and beyond that."

Investors will have to take a wait and see approach to see what happens with the auto industry. In the end, if GM ends up being removed from the Dow, that should be less of a concern to investors than all the missteps by GM management that led to that action.