UPDATE 2-U.S. Senate panel to call auto CEOs to testify

* Lawmakers want answers from executives on dealers

* Delegation meets with White House officials

* Small bondholder concerns conveyed to task force (Adds delegation meeting, letter on bondholders)

By Jeremy Pelofsky

WASHINGTON, May 22 (Reuters) - A Senate committee plans to ask the chief executives of Chrysler LLC and General Motors Corp GM.N to testify next month at a hearing to address concerns over their plans to quickly close hundreds of dealerships.

The companies need to address "the short and insufficient transition period given to dealerships for franchise terminations," Senators John Rockefeller and Kay Bailey Hutchison, the Democratic chairman and top Republican on the Commerce Committee said on Friday in a letter to Robert Nardelli of Chrysler and Fritz Henderson of GM.

No date was set but the panel expects the hearing to occur in early June.

The announcement reflected heightened bipartisan pressure from Congress on the Obama administration over fallout from Chrysler's bankruptcy and restructuring at GM that is likely to lead to a Chapter 11 filing by June 1, barring an unexpected turn of events.

A White House/Treasury task force is driving the industry's overhaul. However, government officials have said the administration has left key business decisions, like plant closings and dealership franchise terminations, to management at both companies.

Nevertheless, lawmakers have complained about the rapid pace of restructuring and aspects of the overhaul at both companies that will impact average Americans far beyond auto assembly lines, which are centered in the Midwest.

A delegation of House members met with White House officials on Friday to address plans by GM and Chrysler to close up to 2,300 dealerships. Dealers and lawmakers say these plans could cost more than 100,000 jobs.

"We discussed our concerns for both Chrysler and GM. We demanded answers for Chrysler and options for GM," Representative Dennis Kucinich said in a statement.

Bankrupt Chrysler decided to close 789 dealerships by June 9, arguing that it needs a smaller network to be profitable. GM has said it will drop about 1,100 of its smaller and less profitable dealerships by letting their franchise agreements expire when they come due in October 2010. There are also 470 Saturn, Hummer and Saab dealers expected to close; GM has been seeking to shed those brands.

Senators want the executives to address the impact of plans for swiftly selling dealer inventories and parts supplies as well as the fallout from closure on employees and customers.

Hutchison on Thursday pressured Chrysler to verbally commit to help the dealerships it is shuttering beyond the deadline.

Both GM and Chrysler have each received billions in bailout money since January.

Kucinich and other lawmakers also contend GM plans to close 16 factories and cut 21,000 jobs -- on top of plant closures at Chrysler -- will undercut already hard-hit economies in Ohio and Michigan and could also affect facilities in states like Delaware and Tennessee.

Two U.S. senators also asked the administration to address concerns by individual GM bondholders, many of them retirees, who contend they and other debtholders are being treated unfairly in GM's plan to restructure $27 billion in debt.

"These constituents are not institutional investors, hedge funds or private equity firms; they are individual investors who have in some cases invested significant portions savings in GM bonds," Senators Claire McCaskill and Christopher Bond said in their letter to Steven Rattner, the task force's lead day-to-day adviser.

Large bondholders, who on Friday restated their opposition to GM's offer of a 10 percent stake in the restructured company, are not affiliated with the smaller investors. (Reporting by Jeremy Pelofsky; Additional reporting by John Crawley; Editing by Leslie Gevirtz and Gerald E. McCormick)