SCENARIOS: What's next in Chrysler bailout?

DETROIT (Reuters) - U.S. automaker Chrysler LLC is racing to meet the month-end deadline imposed by President Barack Obama's autos task force. The task force has told Chrysler it has until May 1 to reach agreements for an alliance with Italy's Fiat SpA, a reduction in secured debt and resolution of labor issues with its unions.

Chrysler has reached cost-saving deals with the United Auto Workers and the Canadian Auto Workers union over the weekend, removing a key obstacle to striking an alliance with Fiat.

However, the automaker's first-lien lenders have yet to agree to deep cuts in secured loans demanded by the U.S. Treasury.

As the automaker races to complete the deals in the next seven days to avoid bankruptcy, following are the possible outcome.

ALLIANCE WITH FIAT

Chrysler has to finalize an alliance with Fiat by April 30 with the Italian automaker taking a stake in the struggling U.S. automaker.

Upon the successful completion of the alliance, the board and senior leadership would cede control of Chrysler, Chrysler Chief Executive Bob Nardelli said this month.

The U.S. government and Fiat would appoint a new board of directors for Chrysler, with most of the directors independent and not employed by either automaker. The board would then have the responsibility for appointing a chairman and chief executive with Fiat's consent.

No deal with Fiat means Chrysler would face a cut-off in its federal funding that could trigger a liquidation in bankruptcy. Chrysler has been surviving on $4 billion of government loans it received early this year.

People with knowledge of the discussions have said Chrysler has been preparing for a Chapter 11 bankruptcy filing as a contingency.

Fiat could finalize its alliance with Chrysler or pick up parts of Chrysler's assets while the automaker is under bankruptcy protection.

UAW

The United Auto Workers union on Sunday reached agreement with Chrysler, Fiat and the U.S. government on concessions to its 2007 contract and a retiree healthcare trust.

The agreement is subject to ratification by UAW members and the process must be completed on Wednesday. It follows an announcement that Canadian Auto Workers members had ratified a concessionary contract with Chrysler.

CREDITORS

Chrysler's agreements with the unions leaves negotiations with Chrysler's lenders as one of the chief remaining obstacles for the automaker to meet the April 30 deadline.

The U.S. Treasury is soon expected to make a new debt restructuring offer to Chrysler's first-lien lenders, owed $6.9 billion in secured loans that stem from the 2007 deal that spun off a majority stake in the No. 3. U.S. automaker from Germany's Daimler AG.

A committee of Chrysler's lenders proposed last week taking $3.75 billion in debt and a 40-percent equity stake in a restructured company.

It was down from their demands for $4.5 billion in debt and a 40 percent stake.

DAIMLER

The German automaker on Monday reached an agreement with Chrysler, the U.S. automaker's owner Cerberus Capital Management and the U.S. Pension Benefit Guaranty Corp to exit its 19.9 percent stake in the company.

Daimler had sold an 80.1 percent stake in the U.S. automaker to private equity firm Cerberus in 2007, ending a stormy decade-long relationship with the struggling U.S. carmaker.

Daimler said the remaining stake in Chrysler would be redeemed and it would forgive the repayment of loans it had extended to Chrysler that it already has written off in its 2008 financial statements.

It also agreed to pay $200 million to Chrysler's pension plans on the date of the execution of the deal and in each of the next two years.

(Reporting by Poornima Gupta and Soyoung Kim; Editing by Phil Berlowitz)