Chrysler LLC's lenders are in talks with the U.S. government to reduce the automaker's debt by swapping some of it out for equity, new debt or a lesser amount in cash, sources familiar with the talks said on Friday.

The lenders, JPMorgan Chase & Co , Citigroup Goldman Sachs Group Inc and Morgan Stanley , are open to working out a deal. The discussions are moving quickly, with several different offers from the government on the table, the sources said

All four banks declined comment, as did Cerberus Capital Management , which controls 80.1 percent of Chrysler.

(Reporting by Jui Chakravorty and Megan Davies)

Investment Chrysler Goldman sachs Morgan Stanley