Automotive News and the Wall Street Journal reports, citing unspecified sources, say that the financially-burdened automaker, Chrysler LCC, is negotiating a deal with the Italian carmaker Fiat, whereby Chrysler would get access to Fiat’s small-car technology.

According to the deal, which will mark Fiat’s return to the US market since its 1983 exit, Chrysler’s plants and dealer network would be available to Fiat for introduction of lower-emission, front-wheel drive vehicles. In addition, Fiat would be controlling 35 percent of Chrysler, thereby increasing its stake in the company to nearly 55 percent later this year.

In the opinion of restructuring professional Van Conway, Chrysler’s venture with Fiat would help the Detroit automaker to leap into the small-car market, “without significant capital investment.” Chrysler would have a small-car lineup much earlier than rivals who are planning to introduce new small-car models.

Moreover, the finances coming in as a result of the partnership could help Chrysler give an assurance to its doubters in Congress, who have been saying that the company is not viable and would not be able to survive independently for a long time.

Chrysler, however, has offered no official comment about the ongoing negotiations. Chrysler spokeswoman, Lori McTavish, said: “In today’s economic environment, talks are going on between companies in all industries — ours is no different. Chrysler as a matter of policy, however, does not confirm or disclose the nature of its private business meetings.”