Carson Provides Its Own Auto Bailout - NBC Southern California

Carson Provides Its Own Auto Bailout

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    The city of Carson is taking steps to save an auto dealership.

    As the Treasury Department provided GM with another $2 billion, the city of Carson approved an auto bailout of its own.

    Cormier Chevrolet will receive nearly $8 million in bailout funds from the city. The huge dealership needs help to pay off a $2.6 million debt to GMAC.

    Without the bailout, the 43-year-old business would close, according to city officials.

    Cormier Chevrolet brings some $550,000 in annual sales tax revenues to city coffers. City officials say it is important to protect existing sources of revenue.

    The Carson City Council approved the plan on a 5-0 vote. Carson's Redevelopment Agency will acquire the property and lease it back at a subsidized rate.

    The Daily Breeze reported that the deal is contingent on Cormier having at least $25 million in gross annual sales in each of the first two years of the loan. The plan requires Cormier have $30 million in gross annual sales in each of the three following years, the Daily Breeze reported.

    The situation is a municipal version of the federal government's bailouts -- the most recent of which was approved Friday.

    The Treasury Department said Friday that it provided General Motors Corp. with another $2 billion in federal loans as the giant automaker struggles to restructure. The Treasury said that the payment was made to GM on Wednesday and provides working capital to the company.

    A government report revealed earlier this week that the Treasury was prepared to provide GM with up to $5 billion more in federal loans and Chrysler with up to $500 million more in bailout support as they race against deadlines to restructure.

    GM has until June 1 to complete restructuring plans that satisfy the government's auto task force, while Chrysler has until April 30.