The GM-Peugeot Partnership

Not quite sure what the executives in Detroit are doing.

So GM plans to take a stake in Peugeot, and I'm not sure why. Well, we have an explanation:

LONDON—General Motors Co. is to take as much as a 7% stake in smaller French rival PSA Peugeot Citroën SA as part of a new auto-making alliance the two companies are negotiating to prop up their unprofitable European operations, people familiar with the talks said Tuesday.

But that explanation still makes no sense to me. I'm talking about the core concept of the matter:

In buying a stake in Peugeot, GM would make the French auto maker its primary partner in Europe to share engineering and development costs as well as provide funds to help the French company in its drive to reduce debt by selling assets, the person said.

This type of agreement has been done before. It did not work out well. GM hurt its public perception by trying to produce cars through parts sharing. A lot of their cars shared the same uninspired characteristics. This bean counting cut car quality and put GM in the hole that led to the 2008 bailout.

We've also seen brands within the GM conglomerate fail including Oldsmobile, Pontiac, and Saab. Making the same cars with different grills is not the way to success. It remains to be seen what this partnership with Peugeot holds in store, but I'm skeptical because of past failures in execution. On paper, it makes sense. However, history says otherwise.