UPDATE 1-Anger, sadness as ax falls on Chrysler dealers

* 789 Chrysler dealers losing franchise agreements

* 25 percent of the automaker's dealers affected

* Many have been family-owned business for generations (Adds estimate of number of workers idled, comment from New York dealer)

By James B. Kelleher and Kyle Peterson

CHICAGO, May 14 (Reuters) - Dealers across the United States reacted with a mixture of anger and sadness on Thursday 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 on Thursday 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. [ID:nN14484143]