A Levin manufacturer is fuming over a decision to end the Defence Force's $2 million clothing contract with his firm and have the clothing supplied from China instead.
Swazi Apparel manufactures raincoats and water-proof boot liners for the Army in a contract worth up to 20% of the company's turnover.
Defence Minister Wayne Mapp said on Thursday the Army contract is with an Australian company which sub-contracted to Swazi Apparel.
Dr Mapp says he will look further into the contracts when they come up for renewal next year to see whether New Zealand manufacturers can be given better opportunities.
Swazi co-owner Davey Hughes says he and his staff will be coming up with as many ways as possible of keeping the workers employed.
"We're pretty tough in the provinces - we're going to dig our toes in, we're going to be as innovative and assertive in our marketing as we possibly can."
The company says it is trying to find work elsewhere and the business will be restructured to try and avoid redundancies.
Mr Hughes hopes the Government's job summit on Friday, which the Army is attending, will result in a change of mindset.
"If people can go to that job summit ... and say 'Listen, we need to change the way that we think about keeping jobs here in New Zealand' then I think something good will have come out of losing this contract to China."
Sharee Harper, who has been at the company for 14 years, says the decision has come as a shock for staff.
She says Swazi plays a crucial role in the community and e-mails and phone calls of support have flooded in from throughout New Zealand.
Mayor of the Horowhenua district Brendan Duffy says to lose another opportunity for employment in the region is frustrating and supporting industries will also be affected.
Prime Minister John Key says the Government would always like to see New Zealand companies have as good a chance as any other business when bidding for government contracts.
However, he says New Zealand's free trade deals with other countries make it difficult to favour local firms.
Defence Minister Wayne Mapp says he will look further into the Army contracts when they come up for renewal next year to see whether New Zealand manufacturers can be given better opportunities.
The Labour Party on Thursday warned against protectionist measures when it comes to the Government buying products.
Leader Phil Goff says it would not be appropriate for ministers to make decisions about procurements, and setting up barriers to favour local products risks retaliation from countries that New Zealand relies on for trade.