Fiat is totally focused on reaching a deal to form a partnership with Chrysler LLC , the struggling U.S. car maker, a source close to the Italian industrial group said on Tuesday.

Inside the company, everyone is totally focused on this deal, the source told Reuters on condition of anonymity.

Fiat and Chrysler are negotiating the terms of a partnership with the U.S. car maker's creditors and unions.

They have until April 30 to seal a deal.

The U.S. government has threatened to let Chrysler go bankrupt if they fail to do it on deadline.

Fiat Chief Executive Sergio Marchionne has said he was prepared to abandon the talks and look for another partner if the union in Canada refused to accept to bear some of the costs that a deal would entail.

But the source said Fiat's staff was focused on Chrysler and making it their top priority.

(Reporting by Gilles Castonguay)