At the end of March the President's task force on the auto industry put a 30-day window on Chrysler and Fiat reaching an alliance agreement. Just hours later Chrysler announced the two companies had signed off on the deal. That turned out to be premature, as there remains a strong chance that Fiat may walk away from the talks.

The CEO of the Italian auto giant, Sergio Marchionne, has given the first indication that not all is peachy around the negotiation table. Marchionne has warned that Fiat may walk away from the deal if Chrysler’s U.S. and Canadian divisions cannot reach an agreement with the unions – namely a significant pay cut.

Marchionne made the comments during an interview with the Toronto daily Globe and Mail, where he also revealed that he would like to change the management structure of Chrysler if a deal was reached.

What’s worrying is that talks between Fiat, Chrysler, and the American carmaker’s associated unions broke down last week due to a disagreement on the level of proposed pay cuts. Chrysler and Fiat are seeking to bring American and Canadian wages into line with lower rates paid by rival firms in Japan and Europe.

Still, both companies are optimistic about the deal. Its value is thought to be worth more than $10 billion for Chrysler and could potentially save more than 5,000 North American manufacturing jobs.