The three-month renewable loans for GM and Chrysler run for a maximum of three years at an interest rate of 5.3 per cent. Getting the loans will require a lien on some Chrysler and GM assets in Canada, giving the two governments senior creditor status.
Also, if the two companies want to renew the loans, they will need to submit restructuring plans to ensure the long-term viability of their operations here by Feb. 20. They will also need to show evidence by the end of March that the plans to become competitive again ? including agreements with stakeholders on cuts ? will proceed.
Harper signalled "all stakeholders" in the auto industry must make concessions in the coming weeks.
"That's going to include management, it's going to include unions, it's going to include bond holders, it's going to include all those who are impacted on the supply chain," he said.
The GM and Chrysler loan terms include limits on executive compensation and performance pay and a ban on "golden parachutes" or huge severance packages for top officials leaving the companies.