Fiat CEO flies to Detroit for Chrysler talks

MILAN (Reuters) - Fiat's CEO has flown to Chrysler LLC's home town of Detroit to meet trade unions and creditors after U.S. authorities gave the carmakers 30 days to set up a partnership to save Chrysler. Sergio Marchionne flew late on Monday to Detroit after U.S. President Barack Obama ordered Chrysler to accelerate its efforts to survive and prepare itself for possible bankruptcy. Marchionne was accompanied by Alfredo Altavilla, Fiat's head of business development, who is leading the talks with Chrysler and the U.S. auto task force, a Fiat spokesman said on Tuesday.

The Italian industrial group first announced its plans for a partnership with Chrysler in January. It is to give technology for small cars and access to foreign markets in exchange for a stake in Chrysler and entry into the U.S. market.

"If the agreement is finalized, as we hope it will be, in the coming weeks, it will present an extraordinary occasion," Fiat Chairman Luca Cordero di Montezemolo said on Tuesday.

"The American market, despite the fact that it is going through a difficult moment, remains the biggest of challenges and opportunities," he said.

Obama has rejected the plan submitted by Chrysler to remain a viable concern with the help of Fiat, saying the No.3 U.S. car maker had not done enough to justify getting billions of dollars more in government loans.

He gave Chrysler 30 days to complete the partnership with Fiat, considered Chrysler's best chance of survival after sales plunged in the worst industry crisis in decades.

One of the conditions demanded of Fiat by the task force was to take a smaller stake in Chrysler than it had previously agreed, down from 35 percent to 20 percent, a source familiar with the talks said.

A member of the government's task force mentioned the possibility of splitting off the Chrysler's "bad" assets and sending them through a court-supervised bankruptcy.

Marchionne said the task force as being "tough but fair."