The alliance between General Motors and PSA Peugeot Citroen mirrors the deal GM made with Fiat on March 13, 2000.
Back then, the mantra was: "Allies on costs, competitors in the marketplace." The wording in Wednesday's announcement was essentially the same: "Each company will continue to market and sell its vehicles independently and on a competitive basis."
Like the GM-Fiat deal, GM and PSA will share vehicle platforms, components and modules as well as form a global purchasing joint venture.
GM and PSA say that in five years each will save about $1 billion annually because of the alliance's synergies. That is the same figure GM and Fiat aimed to reach after five years, but the alliance was dissolved by 2005.
There are a couple of differences between the pacts.
-- GM and Fiat immediately formed a 50-50 joint venture on powertrains while GM and PSA have no powertrain pact right now. PSA already sources gasoline engines to BMW's Mini brand and cooperates with Ford on diesels.
-- GM purchased a 20 percent stake in Fiat Auto for $2.4 billion, which Fiat's parent used to buy 5 percent of GM common stock. GM also agreed to a "put option" that required it to take the remaining 80 percent of Fiat Auto. This time, GM plans to buy only 7 percent of PSA for an estimated $400 million to $470 million. PSA will not take a stake in GM.
The GM-Fiat deal collapsed because both automakers were hit by financial troubles. The situation in Europe today is much worse than in 2000. And any positive outcome from the PSA-GM deal won't be realized for at least five years when the first car off a shared platform is launched.
The only bright side for GM is that this deal does not include a put option, which forced the U.S. automaker to pay Fiat $2 billion to end their marriage.