The automobile industry took another hit this week as Chrysler filed for bankruptcy, leaving both dealers and customers scratching their heads.

The third largest U.S. automaker announced Thursday its plan to file for Chapter 11 bankruptcy, giving the company government protection while it restructures itself.

A Chapter 11 filing does not mean the death of Chrysler – the company will work to make itself slimmer and more attractive, particularly through a partnership with Fiat Group, a sleek, Italian automaker. Still, Chrysler plans to close eight assembly plants and will temporarily suspend financing for dealers as part of its bankruptcy proceedings, according to reports.

In the meantime, Chrysler dealers question the future of their business amid a bankruptcy that could taint consumer confidence in their product.

“The dealers, the pain they’re in is just so great,” said Bill Parsons, former managing director for the Global Advanced Leadership Center in Bowling Green and chair of the Global Automotive Conference. “On one hand, it’s a little bit of relief that they reached some kind of conclusion. On the other hand, there’s this huge black hole.”

While General Motors recently announced plans to cut 42 percent of its dealerships, Chrysler has yet to release specific details on the number of dealerships it might shutter, leaving a handful of local dealers uncertain about their jobs, Parsons said.

“This is a whole new uncharted territory they’re moving into,” he said. “How many dealers will still be in the market after bankruptcy – who knows?”

Ray Cottrell Jr. owns Ray’s Ford-Mercury-Chrysler-Dodge-Jeep in Brandenburg, and while he believes his dealership will survive, the bankruptcy filing impairs his optimism.

“We will survive, whatever we have to do,” he said. “This Chrysler bankruptcy filing does damper my spirits a little bit … anytime your future may be in jeopardy, there’s concern.”

Chrysler sales have picked up over the past couple of months at Cottrell’s lot – a sign that consumer confidence was beginning to rally, he said.

“They’re starting to crawl out of their holes,” he said.

But now Cottrell is dealing with a bankrupt company, which he fears will make customers lose faith in the product and hurt his sales.

“It will take a while to get customer confidence back,” he said. “I believe the bankruptcy filing will hurt business in the short term because of the negativism in it … and the fear that the customers have dealing with a company in bankruptcy.”

And while Chrysler has dealt with financial troubles for months, workers at Cottrell’s dealership were surprised by the news – Cottrell talked with a company representative a few days ago, who assured him Chrysler would not file for bankruptcy.

“I think a large percentage of them expected it, but I still think there’s a little bit of shock involved in it,” he said. “There’s a lot of unanswered questions.”

The company will still honor its warranties on all vehicles, Parsons said, but “they’ll be a lot more picky with what’s covered and what’s not covered.”

The bigger issue lies with repair work, Parsons said, because fewer dealerships means fewer specialists available to fix vehicles, and some dealers have already cut their service staff.

“These vehicles are very sophisticated now, and they’re easy to diagnose but they’re not easy to fix,” he said. “You’ve got to have highly skilled people do it.”

But available car parts should not be an issue with Chrysler vehicles – factories and dealers are stocked with parts and the government has vowed to protect Chrysler customers, Cottrell said.

“I would not have a fear of buying a Chrysler vehicle, even if the corporation was completely shut down,” he said.

Similarly, General Motors’ recent decision to end the Pontiac brand has left many customers worried about their warranties and vehicle repairs.

Pontiac customers should have no problems with vehicle warranties – the company will continue to uphold them and, if the worst happens and GM permanently closes, the government has promised to back warranties, said David Jaggers, general manager of Leachman Buick-Pontiac-GMC in Bowling Green.

“So they really have two areas of comfort,” he said. Still, “as long as General Motors is in business, and I don’t see (GM) going anywhere … General Motors is not going to let those warranties expire or be in any kind of jeopardy.”

As for repairs, GM has assured dealers that Pontiac parts will be available for decades, and those parts are interchangeable with other vehicles, which will remain in production, Jaggers said.

“General Motors went through this with Oldsmobile years ago,” he said. “There was never one single issue with warranties or repairs.”

Jaggers’ dealership still repairs some Oldsmobile vehicles and will continue to fix Pontiac and all General Motors vehicles, he said.

“Our general service department will change none whatsoever,” he said. “We’ve been here 66 years and we’re not going anywhere.”

The bankruptcy filing has sparked deeper concern that General Motors, with a local assembly plant, will follow in Chrysler’s footsteps. GM is approaching its government-imposed June 1 deadline. At that time, the company must have decreased debt and prove it can restructure on its own – otherwise, the probable result is bankruptcy.

GM is currently trying to convince its bondholders, the United Auto Workers and the federal government to swap debt payment for stock shares. The company also plans to close more factories and nearly half its dealerships, and trim itself to four core brands.

But it’s a risky plan, Parsons said, as it will be difficult to get all parties to agree.

“If this (bankruptcy filing) moves, GM on June 1 will be in the same position. I’m absolutely convinced of it,“ he said. “June 1 is coming very, very quickly … you have to have so many parties to agree; it’s an enormous, enormous task.”