Fiat SpA's CEO was set for talks with Chrysler LLC labor unions and creditors in Detroit after U.S. authorities gave the carmakers 30 days to set up a partnership to save the ailing U.S. group.

Sergio Marchionne flew to the U.S. auto industry's home town late Monday to discuss Fiat's planned linkup with Chrysler after U.S. President Barack Obama ordered the U.S. carmaker to accelerate its efforts to survive or prepare for possible bankruptcy.

Marchionne was accompanied by Alfredo Altavilla, Fiat's head of business development, who is leading the talks with Chrysler and the U.S. auto task force, a Fiat spokesman said Tuesday.

The Italian industrial group first announced its plans for a partnership with Chrysler in January. It is to give technology for small cars and access to foreign markets in exchange for a stake in Chrysler and entry into the U.S. market.

If the agreement is finalized, as we hope it will be in the coming weeks, it will present an extraordinary occasion, Fiat's chairman, Luca Cordero di Montezemolo, said Tuesday.

The American market, despite the fact that it is going through a difficult moment, remains the biggest of challenges and opportunities, he said.

Obama rejected a previous plan submitted by Chrysler to remain a viable concern with the help of Fiat, saying the third-biggest U.S. car maker had not done enough to justify getting billions of dollars more in government loans.

One of the conditions demanded of Fiat by the task force was to take a smaller stake in Chrysler than it had previously agreed, down to 20 percent from 35 percent, a source familiar with the talks said.

A member of the government's task force said one possibility was splitting off the Chrysler's bad assets and sending them through a court-supervised bankruptcy.

The next step for Chrysler is to reach cost-saving deals with its unions and creditors. But analysts fear these talks might lead to the partnership costing Fiat more than it had originally planned.

Despite the group's insistence that it will invest no cash nor assume any debt from Chrysler, analysts suspect Fiat might be forced to do just that to win the task force's favor.

Italian Prime Minister Silvio Berlusconi said he hoped the Fiat-Chrysler partnership would be successful and that necessary U.S. financing was made available.

Fiat shares closed up 10.3 percent at 5.27 euros, outpacing a 0.6 percent rise in the DJ Stoxx auto index and bouncing from Monday's near 10 percent drop.

In the latest of a series of production halts to adjust to the weak demand for cars, Fiat will leave assembly lines idle for two weeks at Mirafiori, it main plant in Turin, according to a union official.

The halt will last from April 27 to May 3, sending nearly 5,000 workers home on reduced pay.

(Additional reporting by Gilles Gianni Montani in Turin and Giuseppe Fonte in Rome; Editing by Andrew Macdonald and David Holmes)

Barack obama Chrysler