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The deal that will see Fiat taking a 35 percent stake in Chrysler LLC (Chrysler 300C sedan, top, and Aspen minivan, bottom) and providing a wealth of technology won't be finalised by the time the US automakers presents its viability plan to the Treasury Department on Tuesday.

The deal that will see Fiat taking a 35 percent stake in Chrysler LLC and providing a wealth of technology won't be finalised by the time the US automakers presents its viability plan to the Treasury Department on Tuesday. This was according to an unnamed senior Chrysler official yesterday.

Chrysler is in a race against time to come up with a viable business plan for the future if it wants to secure a further US$3 billion loan on top of the US$4 billion loan it received last month from the US Treasury Department. The loans are vital to keep Chrysler (which includes the Jeep and Dodge brands) afloat as it looks towards a radical overhaul to make it viable for the future. Currently it is exhausting the US$4 billion loan. Chrysler has to present its business plan to the US government next Tuesday. Rival North American carmaker General Motors is also in the same position, it too is seeking a further US$4 billion in federal bailouts on top of the US$9.4 billion it got in January.

Next Tuesday Chrysler will outline two plans for the future, one that includes Fiat's help and one that foresees the future without Fiat's help. Two teams are working on the two plans. However Chrysler officials see the Fiat alliance as the only one that offers viability. Under the terms of the agreement, Fiat will take a 35 percent stake in Chrysler in exchange for providing technology that is worth billions of dollars and which will also allow Chrysler to rush new models into the showrooms much faster than if it were to develop the technology itself.

The US government wants Chrysler to turn a high percentage of its existing debt into equity before any further bailout money is granted, and negotiations this weekend are ongoing with creditor banks to turn their loans into equity. The government also wants Chrysler to convert into share equity billions of dollars of payments that will be due to a health care trust from next year. These equity changes could leave current 80.1 pct shareholder Cerberus Capital Management LP and Daimler AG, who hold the balance, with a combined stake of less that 10 pct according to anyalysts.