Yesterday was Bob Ferry's bleakest day in basketball. The Bullets' general manager called his friend Gene Shue with a most unpleasant message: Shue was out as Bullets' coach.

"I guess I had hoped it would have never happened," Ferry said late yesterday. "During the season you have peaks and valleys, and especially with our team after the injuries, to (Jeff) Ruland and (Frank) Johnson.

"(With) the latest slump, (owner) Abe (Pollin) just couldn't see the light at the end of the tunnel."

The Bullets' 116-87 drubbing at Milwaukee Tuesday night was the club's fourth straight defeat, dropping its record to 32-37. Afterward, Shue said he hoped "we've bottomed out and things will start to get better." Those proved to be among Shue's last words as coach.

Shue last night declined comment other than to read a prepared statement from his home saying that he was "surprised and disappointed" by the Bullets' decision.

"I think he took it as well as could be expected," Ferry said. "He felt he had done a good job given the situation."

Ferry took it hard.

"It's awful," he said. "In fact, Gene is godfather of one of my children."

Ferry and Shue go back a long way, to when the Bullets were still in Baltimore and Shue was coaching them the first time, from 1966 until they moved to Capital Centre to start the 1973-74 season. When Shue was coach in Baltimore, Ferry was both player and assistant coach.

"And," Ferry added, "I recommended that we bring him back."

But the second time around, since 1980, came to an end with Shue's Washington record at 231-248. Both last season and this, injuries to Ruland and Johnson meant Bullets hopes were hurt for an extended period, and lately the team has been struggling to stay near .500.

Said Ferry, "We hadn't dealt with a full deck for two years."

Basketball has been the focus of Shue's life since he played at Towson Catholic High School, then at Maryland. And he played 10 seasons in the NBA.

Shue has had a remarkably long run as an NBA coach. With the Bullets, then Philadelphia (1973-1977), San Diego for two seasons, then back to the Bullets, the 54-year-old has compiled a 20-season coaching record of 757-768, and been named NBA coach of the year twice. As player and coach, he has been involved in more than 2,000 games, the most in NBA history.

Under Shue, the 1970-71 Bullets made the NBA finals, but bowed to Milwaukee. When the Bullets moved to Capital Centre, Shue left to coach the 76ers and then San Diego. By the time Dick Motta, under whom the Bullets won the NBA championship, decided "to move on," the way was clear for Shue's return.

Reflecting recently on his hiring of Shue, three years after the Bullets' title season, Ferry said he thought the team "would hit rock bottom or close to it, and I thought that our familiarity with each other and his with some of the players would make it easier to get through what I thought would be some rough days ahead."

If the Bullets did not plunge disastrously, neither did they climb in the Atlantic Division standings. The roughest of days for Ferry and Shue came yesterday.