WATERLOO -- Eagle Ottawa is considering moving its automotive leather work from Waterloo to Mexico, and is looking to bring other non-automotive work into the Waterloo plant to prevent it from closing, a company official said Monday.

"We are contemplating the decision whether or not to exit the automotive hide processing business in Iowa, and whether or not to source that work out of Mexico, to a supplier in Mexico," said Scott Landis, Eagle Ottawa vice president of human resources in North America.

"We haven't made a final decision," Landis said. "At the same time, we're not talking about a plant closing at this time. We're thinking about, exploring, whether we can do other non-automotive business at the Iowa facility. Those options have yet to be defined at this point."

A decision will be made by month's end, Landis said, but the company will continue to pursue other non-automotive leather work for the Waterloo plant beyond that time.

Company management and union leadership were informed Friday, and Landis was meeting with employees Monday and today. The Waterloo plant currently employs 108 people, working three shifts five days a week.

"We know this is very difficult for employees to hear, and it's painful for the company to consider these things," Landis said. "In this business, we have to be constantly looking at cost and doing things in the most cost effective manner. In view of all of this, we wanted to go ahead and announce what we're looking into now, even though we have not made a final decision, so that they can begin to think about how this may impact them.

"This has nothing to do with the quality of the work force," Landis said. "We've had very good employee relations the past several years, and even prior to that, and it's no reflection on the employees regarding quality, productivity, anything like that. It's, really, purely driven by cost differences."

Garth Bowen, business representative for the United Steelworkers union which represents unionized plant employees, said, "This is really preliminary. We just heard about it. There's going to be some upset employees, but that's pretty natural and normal, I think. We just have to wait and see and try to do the best we can to keep all the jobs we can in Waterloo."

The current labor agreement extends through Aug. 1, 2009. That contract, struck in 2006, included a 55-cent per hour raise each of the contract's three years, with some out-of-pocket health insurance expenses. Average bargaining unit pay was $14.92 per hour at the time the current contract was struck.

The plant employed about 150 at recently as 2006 and as many as 230 over its 20 years of existence. The company reduced the work force since 2006 through a combination of attrition and layoffs, Landis said. Business has been affected by a downturn in the automotive industry, which is changing and converting to smaller more fuel-efficient vehicles.

The plant opened here in 1988 after the city of Waterloo and the state of Iowa offered financial incentives to bring the operation here. It was hailed as a "state of the art" tannery at that time. The plant underwent a $3 million expansion in 2002.

Eagle Ottawa is based in Auburn Hills, Mich. The Waterloo operation is its only tannery remaining in the U.S., Landis said. An older facility in Grand Haven, Mich. closed in 2006. According to the company Web site, the firm has manufacturing operations in Hungary, Argentina, China and England, and two facilities in Juarez, Mexico. It has a research and development facility in Michigan, in addition to its world headquarters.

Contact Pat Kinney at (319) 291-1426 or Pat.Kinney@wcfcourier.com