updated 3/5/2009 2:46:42 PM ET 2009-03-05T19:46:42

The chief executive of Fiat Group SpA told the Obama administration Thursday that the Italian automaker could revive Chrysler LLC and help it repay billions in government loans.

Fiat CEO Sergio Marchionne said the administration's auto task force was receptive to a proposed partnership that would give Fiat a 35 percent stake in the struggling U.S. automaker in exchange for new technology but no cash.

"We can add value," Marchionne told reporters after the 2 1/2-hour meeting with the auto panel at the Treasury Department. "That's the real issue and it's a necessary ingredient of the revival of Chrysler."

Fiat made its presentation in advance of the panel's meeting with bondholders of General Motors Corp. later Thursday. GM is holding negotiations with its bondholders to cut two-thirds of its $27 billion in unsecured debt under the terms of a loan agreement with the government.

General Motors and Chrysler have received $17.4 billion in federal loans and requested an additional $21.6 billion last month. The government is trying to revamp the companies by March 31 and has been meeting with stakeholders as it tries to find a way to resurrect the companies.

Chrysler contends the alliance with Fiat would help both auto manufacturers. Fiat could provide Chrysler with a broad array of fuel-efficient small and mid-size cars, something the Auburn Hills, Mich.-based company lacks, and give Chrysler access to foreign markets.

Fiat's Marchionne has been seeking a U.S. partner to bring Fiat's successful update of the 500 subcompact and its sporty Alfa Romeo brand to the United States.

Fiat met with Steve Rattner and Ron Bloom, top advisers to Treasury Secretary Timothy Geithner, and other government officials. Marchionne said the panel "wanted to know what the industrial alliance will look like and what it will look like after we're finished."

"I think they were intelligently critical of all things that were relevant ... and rightly so. They're looking at taxpayers' funding," he said. "They recognize the magnitude of the problem and there is an absolute determination to find a solution."

Some members of Congress have questioned whether the government should save a company with a significant foreign stake in a major U.S. automaker. Marchionne said "nothing is going to be taken out of the U.S. and the main objective is to repay every single dollar of taxpayer funding before anyone gets anything."

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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