Unions whose members will unload imported railway wagons and transport them on Cook Strait ferries yesterday pledged to support Hillside as KiwiRail considered its future.
Businesses urged the Government to recognise Hillside's value and warned anything that sent New Zealand money overseas threatened jobs and undermined local manufacturing.
Farra Engineering chief executive John Whitaker said KiwiRail's decision to award a $29 million contract to build 300 open-top wagons to China CNR Corporation was a blow to Hillside and the businesses it supported.
Mr Whitaker acknowledged KiwiRail wanted another 2700 wagons built over the next 10 years and hoped the smaller contract did not mean the rest of the order was bound for overseas.
Government-owned KiwiRail needed to make good business decisions, but the Government also needed to consider the economic benefits of securing work for Hillside.
EB's Engineering Solutions managing director Greg Wansink said the Government offered economic incentives to keep The Hobbit film in New Zealand, and it should consider incentives to keep KiwiRail's manufacturing contracts going offshore.
KiwiRail also needed to know Otago's engineering and support businesses were ready to work with Hillside to provide the critical mass it might need to complete the wagon-build contracts that "might help keep it going".
Otago Chamber of Commerce chief executive John Christie said Hillside's tender might have been more expensive but its value to GDP should have outstripped the deficit.
The group promoting the region's rail manufacturing capabilities looked set to commission a report to show how a contract awarded to Hillside would benefit the wider economy.
"That's the opportunity here. If there is a case for some form of government investment or assistance to bridge the gap in future, then we think that's something that should be looked at."
KiwiRail chief executive Jim Quinn said on Tuesday that Hillside's tender bid was too expensive, and it appeared unlikely to be able to meet the mid-2011 delivery deadline.
KiwiRail would investigate having Hillside build wagons from imported parts but its costs would have to be reduced, Mr Quinn said.
Hillside-based Rail and Maritime Transport Union (RMTU) national president Jim Kelly said yesterday workers doubted CNR would meet the mid-year deadline, but remained worried they could not compete with Chinese wages.
RMTU officials and other unions had offered to support Hillside workers as KiwiRail considered how Hillside figured in its 10-year plan, and the situation was likely to be formally discussed by the Council of Trade Unions next month, he said.
CTU secretary Peter Conway confirmed the council was ready to co-ordinate the response to a decision that CTU economist Bill Rosenburg said put the viability of the workshops in doubt.
Dunedin-based Maritime Union of New Zealand national president Phil Adams said he was "absolutely appalled" the wagons union members would unload at the waterfront would be made at a foreign factory.
He stopped short of detailing how his union would support Hillside, but said it would "do whatever is needed, whatever is appropriate to help them fight for this".
