It's crunch time today for Chrysler LLC as the floundering carmaker goes to Capitol Hill to justify a further US$3 billion bailout that is a conditional part of any proposed alliance with Fiat, although little firm detail of the deal is expected.

It's crunch time today for Chrysler LLC as the floundering carmaker goes to Capitol Hill to justify a further US$3 billion of bailout funding that is a conditional part of any proposed alliance with Fiat, although little firm detail of this deal is expected to be presented during the discussions with the US Treasury Department.

Last month the US government gave Chrysler and its fellow American carmaker General Motors a combined US$13.4 billion (Chrysler received US$4 billion of this) in loans and gave them both until today to come up with a business plan that will ensure future viability and allow them to access further loans to keep them afloat whilst they initiative the turnaround plans. In the case of Chrysler this additional request amounts to a figure of US$3 billion and is conditional on the proposed alliance with Fiat which will see the Italian automaker getting a 35 percent stake in return for supplying its small car technology.

Today however, Chrysler is expected to provide the US government with little detail concerning the Fiat alliance, instead it will outline a second contingency plan it has been working on that foresees its recovery taking place by itself. The preliminary plan to be set out by Chrysler today will include details of a drastic cut in costs and details of its plans for its future vehicle programmes. In addition, these plans will act as a basis for the Treasury's decision on whether or not to hand out further loans. Chrysler has made it known that its plan is not tied to its alliance with Fiat. ''We are able to carry it out alone,'' said deputy chairman of Chrysler Jim Press. However he has made it clear that the deal with Fiat ''will save American jobs and will speed up the introduction of new, more efficient cars from the point of view of fuel consumption.'' Press has also said that, once the plan is brought in, it will lead to a 32,000 workers being laid off and cost-savings of 3.8 billion dollars.

Frantic negotiations right up to today's deadline have seen virtually no progress being achieved in Chrysler's aim of reducing its huge liabilities. Lowering these liabilities has been a key demand of the US government if it is to hand over anymore cash, and talks with creditor banks to turn existing debt into equity have floundered. Likewise talks with the dominant United Auto Workers (UAW) union to swap upcoming healthcare liabilities into equity have also made very little ground.

Reaction in the US has been mixed to the Chrysler-Fiat plan, but Democrat Senate House Speaker Nancy Pelosi said yesterday in Rome that she did not forsee any Congressional bias being prevalent against Fiat for being involved in discussions with Chrysler because it is not an American company, according to a report from Reuters. "I don't see any bias against Fiat in these discussions. People have asked me directly 'Are members of Congress opposed to Fiat being involved with Chrysler?' I don't see that at all."

Chrysler was teetering on the edge of bankruptcy last year due to a sharp drop in car sales and its customers deserting it in droves in favour of rival brands, and this year has also got off to a bad start. In January US car sales plunged by 37 pct, dropping to their lowest level since 1982, and analysts say that sales will not total over 10-11 million cars this year, their lowest level in 25 years.