Tough negotiations between Fiat and Chrysler and the latter's unions in the United States and Canada remain deadlocked as the deadline set down by the Obama administration to reach an alliance enters the final ten days. With the U.S. Treasury Department demanding that liabilities with the unions be reduced in favour of a partial equity stake and wages to be reigned in to match those paid in North America by the German and Japanese carmakers, a difficult round of talks are grinding on.

Chrysler Chairman and CEO Bob Nardelli, who wrote to employees this week to outline the push in the negotiations with unions, is likely to leave the company in the near future if the alliance with Fiat does go through. Brought in by Chrysler's majority owner Cerberus Capital Management in August 2007 he is likely to step down when as expected the New York investment firm writes off its 80.1 percent stake in the carmaker under the comprehensive restructuring that is now being hammered out.

Chrylser issued a statement this week which read: "As outlined in Chrysler LLC’s February 17th submission, the Company has been and remains committed to working with the Administration, U.S. Treasury and the Presidential Auto Task Force to secure the support of the necessary stakeholders. As a requirement of Chrysler’s loan agreement, the UAW must agree to a 50 percent reduction in its VEBA and match the transplants hourly labour costs in the U.S. The Canadian Government has taken a similar position, as it relates to the CAW. All parties have complete understanding that Chrysler must achieve the necessary concessions and restructuring targets that have been established. As it moves through this process, the Company believes it is important to keep all options open but Chrysler’s goal is to reach a conclusion by April 30 that the Government deems viable, given the guidelines that have been set."