May 12--ATHENS -- The Japanese partner of Federal Mogul is breaking away to form a new auto supply company in Athens.

McCord Leakless Sealing Co. was a joint venture started in Athens in 1992 between Nippon Leakless of Japan and Federal Mogul, an American company. The two mutually agreed to dissolve the venture.

Tom Hill, president of the Limestone County Economic Development Association, said the new company, American Leakless Co., will buy 11.8 acres behind Steelcase in the Breeding Industrial Park. The company will produce automotive sealing systems for companies like Honda.

The land, owned by the city, will cost $253,000. The total investment will be $5.53 million. Mayor Dan Williams said the city likely will enter into a lease-purchase agreement with the company.

Tax breaks

On Monday, the Athens City Council approved for the company a $52,500 sales tax abatement and a $244,330 property tax abatement that will be spread out over 10 years.

Federal Mogul will continue to operate at its Freeman Avenue location, Hill said. Federal Mogul announced earlier this year that a product line is moving to Athens from South Carolina.

Hill said about 60 employees currently work under the joint venture, and 40 will go to the new company while 20 will stay at Federal Mogul. The new company's initial payroll will be $1.3 million, including construction workers and any overtime to get the new facility up and running, and then $160,000 annually.

American Leakless Plant Manager Toshio Horiuchi said the auto industry is depressed, but he is looking for that to change.

"In the future, we will hire more in the second or third year if the economy goes up," Horiuchi said.

Hill said the company may hire twice as many employees when the economy rebounds.

"There are communities losing jobs all over the Southeast, and to be able to retain jobs ... this is tremendous," said Council President Ronnie Marks.

Horiuchi said the new company wanted to stay in Athens because of the "good people we work with." "We are very much pleased to be in this area," he said.

The completion date for the building is March 2010.

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