General Motors, battling shrinking U.S. sales and a plummeting stock price, is discussing a possible combination with Chrysler LLC, a person familiar with the talks said.

A deal would make sense, but there's no certainty the two companies will be able to make it happen, said the person, who didn't want to be identified because the talks are private.

The discussions add to the prospect of Chrysler falling under different ownership, 14 months after the third-largest U.S. automaker was sold to private-equity firm Cerberus Capital Management LP. GM explored buying its smaller U.S. rival in early 2007, before the former DaimlerChrysler AG announced the sale to Cerberus.

Chrysler's U.S. sales have plunged 25 percent this year, the steepest decline of any major auto company. GM's volume has dropped 18 percent as U.S. demand for new vehicles slides to the lowest levels since the early 1990s.

The Detroit-based automaker hasn't posted an annual profit since 2004, and its recovery efforts have been hampered by the global credit crisis. GM's stock price fell to its lowest point in more than a half century this week, closing at $4.89 on Friday.

"Without referencing this specific rumor, as we've often said, GM officials regularly have conversations with other automakers about items of mutual benefit," said GM spokesman Tony Cervone. He declined further comment.

In a prepared statement, Chrysler's communications director, Lori McTavish, said the automaker "as a matter of policy does not confirm or disclose the nature of its private business meetings." She said the company is exploring several "potential global partnerships."

"Beyond those partnerships already announced however, Chrysler has not formed any new agreements and has no further announcements to make at this time," she said.

A Chinese automaker and Renault-Nissan may also be interested in Chrysler, CEO Bob Nardelli said in an interview last week. He said any decision to sell Chrysler would be up to Cerberus.

The private-equity firm owns 80.1 percent of Chrysler and recently offered to buy the remaining 19.9 percent from Daimler AG, spurring speculation Cerberus may be trying to sell the company.

Nardelli said his job is to execute Chrysler's recovery plan. He said he has met Carlos Ghosn, CEO of France's Renault SA and its Japanese Nissan Motor Co. affiliate, several times.

"Carlos could be a strategic buyer if anything you read in the paper is true about Renault wanting to get access to the U.S. market," Nardelli said. "China could be a very strategic buyer for a totally different reason.

"It depends on who has a hoard of cash in this economy because they're not going to get a lot of debt out there," he said.

Cerberus spokesman Tim Price recently told the Financial Times that Chrysler isn't for sale.

In Tokyo, Nissan spokesman Simon Sproule said Renault-Nissan continues to talk about additional joint projects with Chrysler. "Anything beyond that is speculation," Sproule said. "I'd just characterize it as background noise."

The New York Times late Friday cited people close to the talks saying that chances are 50-50 that the negotiations will lead to a GM-Chrysler merger.

The Wall Street Journal said Cerberus offered to sell Chrysler to GM in return for GM selling its remaining 49 percent stake in GMAC LLC to Cerberus. GM sold a majority of the finance arm to Cerberus in 2006.