I spent time at the Fiat headquarters in Turin this past summer on a business trip. The Fiat people definitely don't view the relationship with Chrysler as a merger (which we would prefer to believe). Interestingly, this may turn out to be a situation where owning Chrysler will give Fiat the opportunity to bail itself out of the financial hole it is in. In the European market, Fiat is considered a dinosaur. Getting access to Chrysler's cash will greatly strengthen Fiat's ability to recover. Unfortunately, this may not be as beneficial to the Chrysler brand.
As an aside, I marvelled at the tv ads that showed the Fiat 500 coming out of the water as if it had been travelling from Italy to U.S. shores. The 500s are made in Mexico!