The Obama administration has told Chrysler it would provide as much as $6 billion in new financing, on top of the $4 billion in loans it has already given the company, if Chrysler could complete a deal by next Thursday with a cost structure that gives it a chance of survival. The creditors have, so far, balked at the terms suggested by the Treasury Department. But the negotiations have taken a new direction. Treasury now has an agreement in principle with the UAW, whose members' pensions and retiree health care benefits would be protected in the event of a bankruptcy filing, said the people with knowledge of the discussions. Moreover, under this scenario, Fiat would complete its alliance with Chrysler while the company is under bankruptcy protection.
Fiat wants to acquire some stakes in Chrysler.