WATERLOO -- Employees of Eagle Ottawa tannery were told in meetings Tuesday afternoon and this morning that the automotive leather work the plant has performed most of its 20 years of existence is being moved to Mexico.

The plant's 108- member work force would be reduced through a series of substantial layoffs, beginning in December or January and continuing over the following year, employees were told.

"We're not happy about doing these kinds of things," said Scott Landis, Eagle Ottawa's director of human resources for its U.S. operations. "It's very emotional. It's very emotional for the employees. It's very difficult for us to make the kinds of decisions. It's difficult to have to consider these kinds of things. In the kind of business we're in, we have to be driven by cost and we have to look at doing business around the world like other companies have done."

In the meantime, the company will continue to look for non-automotive work to bring into the plant to retain as many jobs as possible. But Landis indicated it will be less than the current work force. He said Eagle Ottawa is still planning to keep the plant here open, and there is the "potential' for non-automotive work to be performed here.

"Labor cost is the biggest single issue" forcing the auto work to Mexico, Landis said. The company made its decision after meeting Monday with members of the employee bargaining committee, affiliated with the United Steelworkers union.

"We looked at trying to save any and all jobs we could in Waterloo at our meeting Monday," Steelworkers business representative Garth Bowen said. "We came to the conclusion, both parties, that the employees would have to almost work for nothing to make it feasible and save the kinds of money it would take to keep that business in Waterloo."

"They left us with that little glimmer of hope that there will be a little bit of work, between 20 and 30 positions, and that's if their feasibility study shows they can turn a profit," said Robert Harris, a 20-year Eagle Ottawa employee and president of United Steelworkers Local 827 the past seven years.

"People are still pretty shocked by it," Harris said, noting many workers received Tuesday's announcement with stunned silence.

Landis did not confirm how many jobs would be left here, and said the pace of layoffs would depend on how fast the operation in Mexico could get up to speed. The work will be performed by a supplier outside the company.

Eagle Ottawa workers would have had to work below the legal minimum wage of $7.25 an hour to keep the jobs here, plus concede substantial reductions in benefits, Bowen said.

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.

"This has nothing to do with union labor contracts," Bowen said. "It's the North American Free Trade Agreement. It's hard to compete with $2.40 an hour" wages in Mexico.

"We just can't work for that kind of money" and sustain families, Bowen said. "My heart goes out to the employees and their families, because they'll probably be losing jobs out of it."

The union would work be willing to work with the company to find other work for the plant. "We're more than willing to look at other products" to be manufactured here, Bowen said. "We would embrace that."

Bowen and Landis said company and union representatives will begin meeting next week to discuss potential severance packages, job training and other assistance for the workers to be laid off. "We'll have a list of things we'll want the company to agree to," Bowen said.

Harris speculated that some employees may start looking for other work now, while others will hold out for a severance package.

"We have 20 years in this business," said Harris, an original tannery employee. "I gave them my youth. I don't have that now. But I do have experience that I did not have when I started at the tannery."

The tannery received a number state and local economic incentives to locate here 20 years ago. Officials with the state Department of Economic Development and the city said they believe the company satisfied all the conditions under which those incentives were granted long ago.

Contact Pat Kinney at (319) 291-1484 or Pat.Kinney@wcfcourier.com