Fiat SpA management spent time at Chrysler LLC in Auburn Hills over the weekend as the two automakers hammer out details of a proposed partnership, one of many ways Chrysler is working to show its viability in compliance with the conditions of $7 billion in requested government loans.

Fiat chief executive Sergio Marchionne traveled from Italy for an informal meeting described as "positive" by Chrysler Chairman Robert Nardelli in a letter to employees Monday that provided updates on cost-cutting by all pertinent stakeholders.

A non-binding agreement would give Fiat a 35 percent stake in Chrysler in return for access to "substantially all Fiat group vehicle platforms."

Chrysler product chief Frank Klegon has said Chrysler is looking at vehicles in the A, B, C and perhaps D-sized vehicle segments, which means everything from microcars to mid-sized cars, as well as engines smaller than the 1.4-liter four-cylinders Chrysler currently makes.

Chrysler spokeswoman Lori McTavish said it is too early in the due diligence process to have detailed product plans yet.

Nardelli described the potential alliance as "very promising," echoing sentiments from Marchionne last week.

All is "contingent on meeting the viability plan required of us by the U.S. Treasury," said Nardelli.

The Fiat team in Auburn Hills is helping with the plan.

To make the necessary cost cuts, Nardelli confirmed Monday that suppliers will be asked for price reductions, to freeze material cost increases for 2009, provide long-term contracts, and collaborate with the automaker on ways for shared cost savings.

Dealers are being asked to continue to work to sell all brands under one roof and review vehicle margins and dealer payment terms.

Meetings with the United Auto Workers union have resulted in the elimination of the Jobs Bank and talks continue in the areas of wages, benefits, work rules and job security.

The two sides continue to negotiate future payments to a union-managed health care fund to be made in company equity as well as cash, Nardelli said.

Chrysler executives have signed waivers prohibiting incentive compensation, bonuses, "golden parachutes" and severance payments.

Salaried workers have seen the suspension of their "salary merit program" for 2008 and 2008, 401(k) company savings match and tuition reimbursement.

Cerberus Capital Management LP also is working with Daimler AG to resolve the 19.9 percent stake Daimler still retains in Chrysler.