By Pamela Gentry, Senior Political Analyst

May 15, 2009 – Chrysler announced Thursday the closing of 789 dealerships across the country affecting all 50 states.  It will show the inevitable impact the automotive industry has on the U.S. economy, small businesses and the quality of life for millions of Americans.

In my home state of Michigan, 40 dealerships will close and 14 of them are located in the Detroit Metro area.  That’s devastating for a state with record unemployment; record job loss and one of the highest foreclose rates in the country.

Minority dealers will be hit hard by these closings.  The National Association of Minority Automobile Dealers fears that 140 of Chrysler’s 170 to 175 minority-owned dealerships could face being closed.  And the figure could almost double if General Motors follows up with closing an estimated 174 of the 300 minority-owned dealers.

All of this is the result of Chrysler’s Chapter 11 bankruptcy filing on April 30.  Folks were expecting cuts – but the severity of these stunned dealers, employees and automotive analysts.

Steven Landry, Chrysler Executive Vice President for Sales and Marketing, made the announcement and explained the decision during a conference call. “My stomach still has a wrench in it,” he said.

And the wrench in his stomach is considered mild when compared to the feelings of those dealers on the hit list.  Fred Brans, a sales consultant at Lochmoor Chrysler Jeep in Detroit, told The Detroit Free Press, “It’s like somebody took all the air out of your body.”

Pennsylvania and Texas will see more than 50 dealers close, with Ohio and Illinois closing 40 plus dealerships, leaving some 2,392 up and operating. 

Now it looks like General Motors (GM) may follow suit if the company takes the Chapter 11 route.  They also announced they would likely sell most of its assets to a new company or liquidate assets if they aren’t able to sell $27 billion in bond debt for stock. 

This could be a long road to recovery for the auto industry.

Has the troubled automotive industry impacted you or anyone you know?