PARIS – PSA Peugeot Citroen and General Motors will develop two new platforms together and two other projects will jointly engineer new vehicles on existing architectures under terms of a deal revealed today.

The platforms to be developed together are:

  • An upgraded low-carbon-dioxide-emissions small-car platform that would be underpin such models as the next-gen Opel/Vauxhall Corsa, Citroen C3 and Peugeot 208, as well as models for other regions.
  • Midsized cars in the C-D segment, such as the next Citroen C5.

PSA CEO Philippe Varin says the C5 replacement will be built at the auto maker’s plant in Rennes, France, that had been threatened with closure and will lose 1,400 of its workers as part of an ongoing restructuring.

He does not respond to questions about whether other cars on that platform might be built at Rennes.

The two additional car programs from existing architectures:

  • A compact multipurpose van for Opel/Vauxhall and a compact cross/utility vehicle for Peugeot to replace the 3008.
  • Small multipurpose vehicles for Opel/Vauxhall and Citroen, replacing the Citroen C3 Picasso.

The two auto makers have been exploring joint vehicle projects since they signed a deal Feb. 29 in which GM took a 7% equity stake in PSA and the two agreed to combine some purchasing operations.

Since then, rumors have been flying, including one suggesting the two companies would combine their entire European manufacturing and product-development operations into a joint venture fueled by a $10 billion cash infusion from GM.

The framework announced today doesn’t go quite that far, but the four projects planned will cover a fair bit of the two auto maker’s vehicle lineups.

“We were able in very few months to find four projects together,” says Frederic Saint-Geours, PSA’s brands chief. “It is not easy for two auto makers to do that. We need to have the same needs at the same time.”

Varin says the first vehicles to come from the cooperation will appear in late 2016, which gives the auto makers about a year to adjust to working together before launching into a classic 3-year product-development cycle.

PSA will not be adding platforms, he says, but rather wants to reduce them and intends to make future medium and large cars on the planned C-D architecture. He and Saint-Geours decline to provide additional details about the projects, but some things can be surmised, says Jean-Michel Prillieux, an automotive consultant at Inovev.

Today’s B-platform at Opel is one inherited from Fiat, Prillieux says, so the new future B platform is likely to have many DNA characteristics from PSA. However, the C-D platform probably will be based mainly on previous Opel engineering.

The vehicle programs are expected to be the first to arrive, as they would involve less new development if they are based on current programs. Saint-Geours speaks of the B-platform as being “further in the future.”

The project to replace the C3 Picasso and likely the Opel Meriva probably will use the PSA B-platform of the current C3 Picasso, Prillieux predicts. The Meriva was introduced in 2010 and the C3 Picasso in late 2008. Opel also could employ PSA’s C-segment platform, under the current Peugeot 3008, to replace its Zafira. The Zafira Tourer was introduced in 2011 and the 3008 in 2009.

Varin repeats that GM and PSA each expect synergies of €1 billion ($1.3 billion) a year when the projects are up and running. Because PSA produces 3.6 million vehicles annually and is three times the size of Opel/Vauxhall at 1.2 million units, it makes sense Opel/Vauxhall cars will use more of the higher-volume PSA platforms than the other way around, if saving is to be relatively equal.

Besides the common vehicle and platform programs, plans to unite purchasing departments will benefit PSA more, because the French company now will be able to use the same parts as 9 million GM cars.

Saint-Geours says negotiations with workers in France will continue until late November, declining to reveal whether purchasing employees here will be relocated to Detroit. French newspapers have reported that purchasing staff have been asked about their willingness for such a transfer.

Consultant Prillieux says the cooperation between the two companies could result in Opel/Vauxhall joining PSA in the future. GM’s stake in PSA means that would be like selling Opel partly to itself, but it would rid the U.S. auto maker of having to consolidate Opel’s financial results with its own.

Varin says PSA’s cooperative projects with other auto makers – A-segment cars with Toyota, gasoline engines with BMW and diesels with Ford – are not affected by the programs with GM. A recent decision to abandon a plug-in hybrid project with BMW also is unrelated to the GM alliance, he says, blaming the breakdown on a differing view the two auto makers have of plug-in hybrids.

Varin announces the GM projects during a press conference detailing PSA’s third-quarter financial results, in which revenues fell 3.9% and the automotive business was off 8.5%.

The fourth quarter is likely to be worse.

Faurecia, which is profiting, lowered its expectations for the year to more than €500 million ($650 million), down about €100 million ($130 million) from its outlook in July. IHS Automotive, which in January predicted European production would be stable in the fourth quarter, since has revised expectations downward twice. In July, it forecast a decline of 5% and now it is forecasting an 11% drop in production.

PSA expects the market in Europe to be down 8% this year, after a forecast of 7% three months earlier. Varin says PSA will be cutting production due to slower sales and a need to trim inventory to December 2010 levels.

Varin expects PSA to return to a breakeven cash flow near the end of 2014. It has lined up €11.5 billion ($14.9 billion) from its banks and €7 billion ($9.1 billion) in government guarantees for bond issues in the next three years to help tide it over. It expects its debt to be €3 billion ($3.9 billion) at the end of this year.