By Poornima Gupta

Nardelli, speaking on the sidelines on the first day of the North American International Auto Show, said the automaker was focused on making the business viable and intends to fulfill conditions that were part of a $4 billion U.S. government emergency loan it received on Jan 2.

"We reduced layers, expanded job responsibility...no one around the table should read this as us trying to position it for sale," Nardelli told a press briefing.

Nardelli said Chrysler, which had requested $7 billion, is counting on getting the rest of the loans requested from the government in order to keep operating.

Cash-strapped Chrysler received the emergency loan two days after the government completed a similar payout to its larger rival General Motors Corp.

Both Chrysler and GM have said they need the infusion of government cash to meet obligations to suppliers at a time when a plunge in auto sales has drained their cash reserves.

Under terms of the government bailout, Chrysler and GM must meet certain cost cutting targets, including labor cost reductions and debt restructuring, by mid-February and demonstrate that they are viable by the end of March.

Nardelli said most of the funds Chrysler received from the government went toward payments for suppliers, workers and dealer incentives.

"We are still meeting all of our payment requirements," he added.

Chrysler, privately held and controlled by Cerberus Capital Management , faced the most intense scrutiny in congressional hearings on the proposed industry bailout.

Some analysts doubt whether Chrysler can continue as a independent entity. Its 2008 U.S. sales fell 30 percent, compared to 20 percent falls at Ford and 23 percent for GM.

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Nardelli said while the company is still open to partnerships, its product pipeline shows that the company is focused on turning around its business.

"The roll-outs we will have over the next few years are significant and it demonstrates our commitment that we are a car company and we do have strong viability," Nardelli said.

Nardelli said criticism that Chrysler was in "hibernation mode" because of a decision to idle plants was "farthest from the truth."

Chrysler shut down all its North American factories for at least a month from Dec 19 to cut costs, shore up cash and reduce swollen inventories.

"We do have factories idled but we think we are being responsive to make sure we are not churning out vehicles and overloading our dealer lots," Nardelli said.

In wide ranging remarks, the CEO said merger talks with GM that ended late last year had not restarted, but the company has ongoing discussions with GM and cross-town rival Ford Motor Co on product exchange and other related partnerships.

Chrysler owner Cerberus owns 51 percent of GM's former financing arm GMAC, with GM owning the other 49 percent.

Chrysler ended 2008 with just $2 billion in cash, Nardelli said, adding that the "low point" for cash forecast in 2009 is in January. Chrysler has $11.7 billion in cash at the end of June.

(Additional reporting by David Bailey. Editing by Peter Bohan)