April 23 (Bloomberg) -- Fiat SpA Chief Executive Officer Sergio Marchionne said Chrysler LLC still can accomplish restructuring actions before an April 30 deadline and form an alliance with his company.

“I see no reason why this should not happen and confirm our unwavering commitment to getting this done,” Marchionne said in a call with analysts today.

Chrysler must reach labor agreements with the Canadian Auto Workers and United Auto Workers unions in the next week and meet a government requirement for “extinguishing the vast majority” of its bank debt to avoid bankruptcy and qualify for $6 billion more in loans.

Fiat, based in Turin, Italy, would take an initial stake of 20 percent in Chrysler that could increase to as much as 35 percent by achieving operating goals. The automaker then would have an option to buy 16 percent more of Auburn Hills, Michigan- based Chrysler over seven years assuming government loans are repaid, according to a Fiat presentation on its Web page.

Fiat won’t put cash into Chrysler without receiving a controlling interest, said Marchionne, 56. Fiat would share its auto technology and global distribution, contributions Chrysler values at as much as $10 billion. The U.S. automaker is 80 percent owned by the New York-based investment firm Cerberus Capital Management LP.

“We hope we can reach a conclusion that the U.S. Treasury and the administration deems appropriate given the guidelines that have been set,” said Shawn Morgan, a Chrysler spokeswoman, in a statement today. “We are pleased that Chrysler, Fiat and Cerberus have reached agreement on the framework of a global alliance, supported by the U.S. Treasury.”

CAW, Chrysler

The Treasury Department is preparing a bankruptcy filing for Chrysler only as a matter of “due diligence,” Michigan Senator Debbie Stabenow said in an interview. “They are preparing all options,” Stabenow, a Democrat, said today in Washington.

Marchionne, who has said he would be willing to act as CEO of Chrysler if required, was in the U.S. earlier this week and plans to return tomorrow.

Fiat is interested in Chrysler “in its totality,” not merely pieces that may be available in bankruptcy, Marchionne said. He has previously said the company might pursue Chrysler assets.

The CAW is nearing an agreement with Chrysler on worker concessions needed to qualify for additional government aid, union President Ken Lewenza said. Chrysler is seeking to cut its hourly labor costs to C$57 ($46.49) an hour from C$76.

‘So Much Pressure’

“We’re close,” Lewenza said today. “There’s so much pressure on both Chrysler and incredible pressure on the CAW that we’ve got to get the job done.”

Chrysler is trying to reduce its debt as the Treasury trades offers on the automaker’s behalf with a group of banks holding $6.9 billion in obligations. The Treasury asked the lenders yesterday to reduce their debt to $1.5 billion in exchange for a 5 percent equity stake, a person familiar with the negotiations said.

The offer countered a proposal a day earlier by the lenders to reduce the debt to about $4.5 billion and take 40 percent equity. The person describing the Treasury offer asked not to be identified because the talks are private. The lenders also made a requirement that Fiat invest cash in Chrysler.

To contact the reporter on this story: Mike Ramsey in Southfield, Michigan, at mramsey6@bloomberg.net

Last Updated: April 23, 2009 17:33 EDT