Fiat and Chrysler have a framework for an alliance and a US government blessing and now must race to tie up crucial agreements with debt holders and unions to make it a reality.

Nothing less than Chrysler's future is at stake, with a targeted bankruptcy for the No 3 US automaker a clear risk after a 30-day deadline for new federal funding has passed.

One possible bankruptcy scenario being discussed would have Chrysler's "good" assets sold off to Fiat, a person familiar with the discussions said on Monday.