Sergio Marchionne, the chief executive of Fiat and Chrysler, did a hand-brake U-turn this week when he told reporters on October 30th that Chrysler’s IPO would go ahead, probably by the end of the year. The notion of floating Chrysler, in which Fiat has amassed a 58.5% stake, has been abhorrent to Mr Marchionne, who told investors just a few weeks ago that it was not the best way to build the business (one analyst wrote a paper recently titled “Chrysler—The IPO That Will Not Happen”). Whether or not the IPO goes ahead, the Italian car boss has always wanted Fiat instead to snap up the shares it does not own in Chrysler so that the two sides of the business can merge into a seamless entity. Many think that his comments this week were a negotiating tactic in his quest for a deal to buy the shares. The remaining 41.5% stake in Chrysler is held by the health-care trust fund of the United Automobile Workers union. Under the terms of Chrysler’s bail-out in 2009 Fiat had the opportunity to buy the trust-fund’s holding, which it hoped to get at a cheap price. That was before Chrysler's unexpected good fortunes. It posted its ninth consecutive quarterly profit this week, with net income surging by 22% to $464m between July and September. Chrysler’s turnaround matters to Fiat: without its American partner it would have gone €247m ($340m) into the red in the quarter, rather than reporting a €189m net profit. Not surprisingly, the trust fund wants Fiat to pay a higher price than it is offering for its shares.

How things have changed over the past half decade. It was almost precisely five years ago that the then chief executives from Detroit’s Big Three flew to Washington, hats in hand, begging for bail-outs. After Congress rejected an aid package, the White House tapped the same relief programme (TARP) set up for the faltering financial industry to toss Chrysler and General Motors a short-term lifeline. (Ford, turning to a credit line it set up before the collapse, decided to go it alone.) Chrysler eventually got its critical support only after Fiat agreed to become its white knight.

It is a very different scenario today, with the market for new cars in America zipping along nicely to the point where Detroit’s carmakers are struggling with capacity constraints. “Ironically, the economic collapse created a lot of pent-up demand that Detroit carmakers are now taking advantage of,” says Joe Phillippi, chief analyst with AutoTrends Consulting. Nowhere is that more apparent than in the huge segment that General Motors, Ford and Chrysler continue to dominate: the high-profit full-size trucks that are in favour again with construction workers as the American economy continues to recover.

For their part, Ford and GM saw profit fall during the third quarter. Ford’s net income dropped by a fifth, to $1.3 billion. GM’s plunged by over half, to $700m. But the numbers came in ahead of consensus forecasts and, to a large degree, reflected positive trends. Ford and GM each booked large write-offs because of aggressive restructuring programmes aimed at reversing years of painful losses in Europe. They also invested heavily in China, the world’s largest car market, where GM is battling Volkswagen (Ford is making headway after a late start).

The rise in GM’s share price is particularly good news for American taxpayers, who shelled out $50 billion to keep it going. The Treasury wants to sell its remaining 7% stake by next April, though it is likely to happen well before then. The bad news is that the government now anticipates a $9.7 billion loss from the bail-out (when Mitt Romney was demanding a quick sell-off in the middle of 2012 the losses would have been perhaps twice as large).

All three of Detroit’s big carmakers expect to end the year solidly in the black. Still, there are some “headwinds,” warns Rod Lache, an analyst with Deutsche Bank, particularly for Ford, which has important new products in the pipeline for 2014, including a replacement for its best-selling F-Series range of pick-up trucks. It will want to make sure it avoids the sort of quality and customer-satisfaction issues that saw it lag well below average in the annual car-reliability survey published recently by Consumer Reports. Although Mr Lache sees “confidence increasing” in GM, its biggest headache is still Europe, after 14 years of losses there.

As for Chrysler, it has had its own quality issues to contend with and has had some painful delays getting new products to market on time, notably with the launch of the compact Jeep Cherokee crossover, a fast-growing niche. Shutting down an entire plant for an extended model changeover, Mr Marchionne now says, is “something we’ll never do again.”

Perhaps Chrysler’s biggest problem is that it sells only one in seven of its vehicles outside North America; by comparison GM is selling almost two-thirds of its cars outside the United States and Canada. Pairing up two mostly regional brands into one global powerhouse was critical to Mr Marchionne’s plan to have Fiat invest in Chrysler in the first place. He is clearly fretting that an IPO complicates matters. Nonetheless, “That horse is out of the barn,” he said in this week's conference call to discuss Chrysler earnings. At this point, the two carmakers seem to have no other option but to work together, whether as one company or as two closely intertwined.