SCENARIOS - What will replace GM if it leaves the Dow?

By Leah Schnurr

NEW YORK, May 29 (Reuters) - General Motors Corp is widely expected to be removed from the prestigous Dow Jones industrial average, as it heads toward almost certain bankruptcy. The automaker's removal would make it the first company to be removed from the Dow due to bankruptcy in 27 years.

It would leave a hole in the 30-stock Dow .DJI that will be swiftly filled.

But which company will be added to the 103-year-old average if GM GM.N is jettisoned?

Bankruptcy looms for GM with a government-imposed June 1 deadline as it attempts to restructure under the direction of U.S. President Barack Obama's administration.

It would be the biggest bankruptcy for a U.S. industrial company and the third-largest in U.S. history after investment bank Lehman Brothers and telecommunications company Worldcom.

If GM does go bankrupt, the company would be removed from the average, John Prestbo, executive director of Dow Jones Indexes and the chairman of the DJI oversight committee has said.

Analysts do not agree on the size and sector of the company that would replace GM in the Dow. There are several avenues the index could take, ranging from well-known tech names like Apple or Cisco, to GM's rival, Ford.

"The question will be, do you go with another manufacturing company, given the U.S. is less sensitive to that than it was many years ago, or do you go with the direction of the future, which is services?" asked Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.