Fiat CEO Sergio Marchionne (above at the Geneva Motor Show on Tuesday) was upbeat about the prospects of forging an alliance with Chrysler after a face-to-face meeting with the US Treasury's department's auto task force in Washington this afternoon. Fiat and Chrysler (above, showing key members of its European model range at this week's Geneva Motor Show) have proposed an agreement that will see the Italian firm providing its efficient smaller technology and engineering in exchange for a 35 percent stake.

Fiat CEO Sergio Marchionne was upbeat about the prospects of forging an alliance with Chrysler after a face-to-face meeting with the US Treasury's department's auto task force in Washington this afternoon. He said that they had been "intelligently critical" of the Fiat plan. The two-and-a-half hour long meeting saw Marchionne and top Fiat Group officials closeted with seven members of the Obama administration's automotive task force team which is dedicated to trying to find solutions to the financial mess that Chrysler and its fellow US automaker General Motors find themselves in.

Despite collapsing automobile sales in North America in recent months Marchionne believes that Fiat "is a necessary ingredient" in turning Chrysler's waning fortunes around. "We can add value," He said this afternoon after the key meeting with the task force members who also quizzed him on European automobile trends. "We think we're adding significant technology and products to the offerings of Chrysler. With them, I think they've got a fair chance of making it out," he added.

Although new vehicle sales in the United States have deteriorated considerably since the Fiat-Chrysler alliance was first proposed in mid-January, Marchionne is still optimistic that the American carmaker's ailing fortunes can be turned successfully around. "Nothing has happened that would change my mind," he said.

The meeting was chaired by business recovery expert Steve Rattner and former labour advisor Ron Bloom, who according to reports asked all the questions, and Marchionne came away pleased with the response he got at the meeting and he believes that they fully grasp the seriousness of the problem. "The feeling that I got from them is that they recognise the magnitude of the problem and there's an absolute determination to finding a solution. At least, they're engaged.

Fiat and Chrysler have proposed an agreement that will see the Italian firm providing its efficient smaller technology and engineering in exchange for a 35 percent stake in the American car maker, with the option to raise this to a controlling 55 percent in the future. Marchionne believes that it is the best available deal for Chrysler. "Technology, platforms, engines, knowhow. All stuff that has been paid for and worked on by Fiat over a number of years," he said. "If you wanted to buy it on the outside, it would cost you a huge amount of money."

The alliance is widely reported to be dependent on Chrysler obtaining the further US$5 billion in aid that it has requested from the US Treasury Department. That is on top of the US$4 billion it has already received this year. However Marchionne wouldn't however be drawn on whether the entire second tranche of funding was fundamental to the deal going ahead. "The project is subject to additional financing coming in," he said without specifying an amount.

He also reassured the Treasury Department team that its 'bailout' money would be spent in its entirety on Chrysler and none of it would find its way to Fiat. He also said that the loans would be paid back. "Nothing is going to be taken out of the U.S., and the main objective is going to be to repay every single dollar of taxpayer funding before anybody gets anything." Asked if the task force has enquired about a financial role from Fiat he responded: We are providing cash equivalents."