Rome - It was puns galore as Italy on Friday gushed over US President Barack Obama's announcement of Italian carmaker Fiat's alliance with Detroit's bankrupt Chrysler.

"Topolino (little mouse) saves the giant," trumpeted Rome daily La Repubblica, paying tribute to Fiat's classic 500cc model car.

Il Sole 24 Ore, in its headline, referenced a recent hit film by action-hero Clint Eastwood named after the star's car, a Gran Torino - even if the model in question was a Ford.

"Gran Torino wins in America," it said. In Italian it means Great Turin, the northwestern city where Fiat is based.

But "pride" was the word that came up most often, used by both President Giorgio Napolitano and Prime Minister Silvio Berlusconi to describe the deal which has created the world's sixth largest automobile company.

Some commentators, however, warned of the potentially rocky road facing the Fiat-Chrysler marriage.

Chrysler's application for bankruptcy protection under US law, means it may remain tied up in court-led procedures, delaying the implementation of the new alliance.

Still, Obama on television praising Fiat's technology was viewed as a vindication for many Italians, battered in recent years with reports on the global uncompetitiveness of their economy.

Fiat, Italy's largest private sector employer and a driving force behind the country's post-World War II boom, was itself on the verge of bankruptcy just over five years ago.

On Friday, Italian media singled out as a hero the man credited with the company's turnaround, CEO Sergio Marchionne.

The Canada-raised 56-year-old, is described as an "anti-Divo" or "non-celebrity" who sports jumpers that cut a different figure from most snappily-suited Italian corporate executives.

Marchionne was praised for steering Fiat's negotiations in Washington with government officials and labour union leaders in the Chrysler deal.

Fiat for decades dominated the domestic car market with its relatively cheap, dinky, box-shaped models seemingly suited to the narrow lanes of many Italian towns and cities.

But by the late 1980s it was falling behind competitors from Japan and parts of Europe.

In the US with its wide motorways and national penchant for large, big-cylindered cars, Fiat ceased operations some 25 years ago.

By then, also hobbled by limited spare parts availability, Fiat had gained a reputation in the US for unreliability. Its name, an acronym for Italian Automobile Factory Turin, being distorted to "Fix-it-again-Tony."

One fan, however, appears to have been Barack Obama, who according to Italian news reports, as a college student owned a Fiat Strada, one of the company's first robot-assembled models.

More than a quarter of a century later, with Obama in the White House on an environmental platform and an economic crisis that is threatening the demise of the US auto industry, the prospects for "greener", more fuel-efficient cars catching on in the US have grown.

Marchionne, since taking over at Fiat in 2004, has worked on slashing management costs while prioritizing development of new models, including commercially successful ones like the new Panda and Gran Punto models. A completely revamped version of the
1960s Fiat 500 won the 2009 World Design Car of the Year award.

Marchionne has also invested in technological know-how, especially research in less-polluting engines, fuelled by a mix of unleaded petrol and methane gas.

It is such technology, coupled with the management practices introduced by Marchionne that persuaded the US government that an alliance with Fiat can save Chrysler and help it become a more streamlined company with a more popular, fuel-efficient products.

Fiat hopes to use established Chrysler dealerships across the US to sell its cars, which it plans to re-introduce to the US market, initially with the Fiat 500 and with the MiTo, a model from another of its brands, Alfa Romeo.

But in a global car market where many analysts predict only the largest four or five manufacturers are likely to survive, Marchionne believes the alliance could potentially boost Fiat-Chrysler production capacity to between five and six million cars a year.

In an interview with Turin daily La Stampa on Friday, he reiterated Fiat's interest in extending a partnership with Germany-based Opel, a division of another ailing Detroit auto giant, General Motors.

"We worked day an night for this (the Chrysler deal) but we cannot stop now," Marchionne said. (dpa)