Sergio Marchionne

A quarter of a century after saying arrivederci to America, Fiat may be poised for a U.S. comeback. The huge Italian conglomerate, which sells vehicles under the Fiat, Alfa Romeo, Lancia, Maserati and Ferrari nameplates, has been looking for a tie-up with another carmaker for some time. After reported discussions with the French company that makes Citroen and Peugeot appeared to go nowhere last year, Chrysler may be its next dance partner.

In 2006, Carlos Ghosn, chief executive of Renault and Nissan and one of the car industry's longest-serving bosses, held exploratory talks on an alliance with General Motors. Kirk Kerkorian, the Beverly Hills billionaire investor, had built a large stake in GM and won a board seat at a company that he thought was drifting but that Ghosn could help get back on course. But the talks with GM — whose then-CEO, Rick Wagoner, considered Kerkorian a gadfly — went nowhere. GM demanded a $2-billion "equalizing contribution" from Renault and Nissan for the privilege of forming a partnership.

Chrysler has put bankruptcy behind it, but turmoil at the company continues. The troubled automaker on Monday replaced two top executives less than four months after promoting them and at the same time announced plans to split its Dodge brand in two, creating an all-truck Ram division. Although Chrysler said the departures of Peter Fong, formerly head of the Chrysler brand, and Michael Accavitti, who led Dodge, were voluntary, the moves raise questions about the focus of the company's business plan as it tries to rebuild.

By taking a stake in Chrysler, Fiat may be providing a glimpse of the future of the auto industry, one that's a lot more global -- and where everybody scratches each other's back. The deal, announced as a letter of intent Tuesday, is not final but would give the Italian automaker a 35% stake in Chrysler, as well as access to Chrysler's U.S. manufacturing facilities and huge distribution network.

Italian automaker Fiat, which is taking over Chrysler, said Sunday it was talking with General Motors Corp. about acquiring the U.S. company's European operations. Fiat said that over the next few weeks, Chief Executive Sergio Marchionne would be looking "to assess the viability of a merger of the activities of Fiat," including its interest in Chrysler, with General Motors Europe into a new company.

Chrysler cleared a major hurdle in its bid to stave off bankruptcy by reaching key labor deals Sunday with its unions in the U.S. and Canada. A tentative pact with the United Auto Workers -- details were undisclosed -- came just hours after membership of the Canadian Auto Workers union ratified a deal late Sunday that could save Chrysler close to $200 million a year.

Although Chrysler Group lost $3.8 billion since emerging from bankruptcy in June, its financial performance is exceeding the expectations of many analysts who see hopeful signs that the automaker may be on the road to recovery. During the first quarter, the automaker trimmed its losses to $197 million and managed to scratch out an operating profit of $143 million, Chrysler said Wednesday. "Profitability is significantly better than we appreciated," said Max Warburton, an analyst with Sanford C. Bernstein in England.

Perhaps the most attention-getting Super Bowl ad - other than that dog blackmailing his owner with tortilla chips to keep quiet over a felinicide, of course - was Clint Eastwood's paean to a resurgent auto industry in Detroit. The ad featured Eastwood leveraging his cinematic persona to the hilt, emerging from the shadows while praising and challenging Americans at the same time. “It's halftime in America too,” Eastwood rasped during halftime at the Super Bowl in a manner reminiscent of the Detroiter he played in “Gran Torino.”  “Seems that we've lost our heart at times.

More signs emerged Tuesday that the U.S. auto industry may actually be recovering from its deep slump, despite estimates of anemic January sales and Toyota Motor Corp.'s suspending sales of eight vehicle models because of accelerator problems. Ford Motor Co. said it would hire 1,200 workers, and General Motors Co. announced a big investment in manufacturing electric engines. Also, Dutch sports-car maker Spyker Cars said Tuesday that it had struck a deal to acquire Saab from General Motors.

Fuel economy is on display at the sprawling Los Angeles Auto Show, opening to the public Friday, and it's not just cool new plug-ins, hybrids and electric buggies. General Motors Co., once a symbol of gas-guzzling, carbon-belching driving, was there at Thursday's media preview with its Chevrolet Volt winning an award for "green car of the year" and also offering some hints on how its vast array of sedans, sport utility vehicles and sports cars will meet ever more stringent fuel economy standards.