CHICAGO, (Reuters) – Dealers across the United  States reacted with a mixture of anger and sadness yesterday  to word that bankrupt automaker Chrysler LLC plans to eliminate  franchise agreements with them as part of its restructuring  efforts.

But most, even those surprised by the news, entertained  little hope they could stop Chrysler from following through on  the proposed closures, the latest chapter in the decline of a  company that was — for a brief period in the 1990s — the most  profitable car manufacturer in the world.

As a result, the dealers said they were already taking the  sad but necessary preliminary steps to close or consolidate  businesses that, in many cases, had carried their family names  as well as those of the automaker for generations.

“Today is a tough day for a lot of people,” said Alex  Planas, the general manager of the Tamiami Chrysler Jeep Dodge  in Miami, Florida, which employs 100 workers.

Chrysler notified all its dealers yesterday about its  plans to eliminate 25 percent of its retail showrooms and is  seeking permission from a U.S. bankruptcy court to terminate  franchise agreements.

One Chicago dealer, Stanley Balzekas, characterized the  notification as a “screw you” letter because it was “cold and  very factual.”

The automaker sought approval in a bankruptcy court filing  to terminate franchise agreements with 789 of 3,181 dealerships  as of June 9.

Chrysler, which filed for bankruptcy on April 30, and  larger rival General Motors Corp, have faced pressure to cut  struggling dealerships to bring their large sales networks in  line with those run by more successful automakers like Toyota  Motor Corp which has only 1,200 dealers.

The National Automobile Dealers Association, which  represents the country’s 20,000 new car dealers, estimated that  each Chrysler dealership employs about 48 people on average.  That would mean that the cuts by Chrysler could lead to a  potential loss of almost 38,000 jobs.

Mark Calisi, 47, who owns Eagle Auto-Mall in Riverhead, New  York, says he was “devastated” to learn that his dealership  would be closed. He said Chrysler accounts for a third of his  business, which also sells Volvo, Mazda and Kia, and that yesterday he had to sack 30 of his 100 employees.

“I can’t even give severance because Chrysler’s not taking  back my parts,” he said.

Calisi, who said he’d just invested $8 million in a new  dealership, blamed the federal task force overseeing auto  industry restructuring for his plight and said he was weighing  his legal options.

“I have been with Chrysler for 13 years and my father was  with Chrysler for 30 years,” he said. “No matter which way you  cut the cake it’s devastating.”

Regina Alexander, service and parts manager of the  family-owned Arnold Motor Sales Inc, which has sold Chrysler  cars in a little town east of Phoenix, Arizona, since 1971 and  employs seven workers, called the news “difficult” but a  reflection of the grim economic climate.

“We’ve been selling to generations of families here …,  we’ve been through all the mine shutdowns and the mines  reopening,” she said. “So we’ve been through some hard times,  but this is probably by far the worst.”