Chrysler says it has Fiat deal framework

Ailing automaker Chrysler LLC said Monday it has agreed on the framework for a global alliance  with Fiat SpA, but that there were still hurdles to a definitive pact with the Italian automaker.

The news came not long after President Barack Obama refused further long-term federal bailouts for General Motors Corp. and Chrysler LLC, saying more concessions were needed from unions, creditors and others before they could be approved. He raised the possibility of controlled bankruptcy for one or both of the beleaguered auto giants.

He said Chrysler’s situation is more perilous than GM's, and the government would give the company 30 days to overcome hurdles to a merger with Fiat SpA. If they are successful “we will consider lending up to $6 billion to help their plan succeed,” Obama said.

"We are encouraged by the commitments of the Administration, U.S. Treasury and President's Auto Task Force to the American automobile industry and Chrysler's viability, with a Fiat alliance," Chrysler Chairman and Chief Executive Officer Bob Nardelli said in a statement.

Nardelli said Chrysler would operate "business as usual" over the next 30 days. "While we recognize that we still have substantial hurdles to resolve, Chrysler is committed to working closely with Fiat, the Administration, U.S. Treasury and the Task Force to secure the support of necessary stakeholders," his statement said.

Fiat CEO Sergio Marchionne says a Fiat-Chrysler alliance will strengthen the U.S. carmaker’s finances and preserve American jobs.

Marchionne says an alliance would also accelerate Chrysler’s efforts to make fuel-efficient vehicles.

He says that “Fiat’s environmentally conscious technologies and small- and medium-car platforms will play a key role” in persuading U.S. consumers to buy Chrysler.

Marchionne in a statement Monday thanked Obama for his encouragement to finalize a deal.

Also in msnbc.com business Retailers learn lessons from Black Friday death Your Career: How your name may hurt you Answer Desk: Unemployment benefit madness Pop-up stores try to entice holiday shoppers   Video: Stores are hoping for a holiday miracle

MORE FROM AUTOS

Autos Section Front

Toyota to replace 3.8 million gas pedals   Nissan hatches plan to boost battery cars Saab’s future unclear as GM loses bidder Toyota to recall 110,000 Tundras over rust Leasing again becoming option for auto buyers GM asks Europe for up to $4.9 billion handout Electric car maker Tesla seen going public 10 strange-looking foreign cars VW to buy Karmann Ghia-maker's assets Ford, Subaru, VW win top safety picks Autos Section Front   Add Autos headlines to your news reader: