Army shifts $2m contract to China

What do I tell my staff, asks clothing manufacturer

CRAIG SIMCOX/The Dominion Post

KIWI FIRST: Swazi owner Davey Hughes says he feels "deeply betrayed" that Levin is losing work to China.

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A small-town clothing manufacturer has been dealt a blow on the eve of the Government's jobs summit after being told a $2 million contract to supply the army is shifting to China.

Levin's Swazi Apparel has made wet-weather gear for troops for the past three years, but the Defence Force says his contact will be cut by 93 per cent – more than $1.9 million – this year.

Swazi owner Davey Hughes said he had been told the work was going to China. He was "saddened and deeply disillusioned".

"For a small town like Levin, that is a big chunk of work to lose. As a New Zealander, I feel deeply betrayed. As an employer, I am lost for words to deliver to my staff."

News of the contract cut comes a day before the much-heralded summit called by Prime Minister John Key to find ways to protect jobs as the recession deepens.

Mr Key said, through a spokesman, Kiwi companies should always get a "full and fair opportunity" to compete for government contracts, but departments were also bound by longstanding procurement policies.

These had to be in keeping with trade agreements which meant preference could not be given to Kiwi firms, and companies bidding for tenders could not be ruled out simply because they were foreign.

Defence Minister Wayne Mapp said concerns about cutting the Swazi contract had been raised with him and he had raised it with the Defence Force.

He said the issue was complicated because Swazi supplied the army through a contract the Defence Force had with a third party and which was not due to expire till June 2010.

Though the contract is brokered through Australia-based Yakka Apparel Solutions, a Defence Force spokesman confirmed last night it was up to Defence to sign it off. He could not confirm whether the Swazi contract would go to China.

Yakka workwear general manager David Lilburne said the company could not comment on work going to China as it was up to the Defence Force.

But Mr Hughes said the decision to allow his contract to go to China flew in the face of the objectives of the job summit, which aimed to build on initiatives to ease the economic slowdown, such as bringing forward infrastructure projects.

"I am aghast the Government can commit such an act with one hand, while on the other hold a job summit.

"Promising infrastructure spending is terrific, but the ladies who work here have long forgotten how to push wheelbarrows and pour hotmix."

He employs 70 people and is hoping to avoid staff cuts by taking innovative measures, including selling directly to the public from his factory.

Mr Hughes said the Government should follow the lead of the United States, where Congress this week required the US Defence Department to buy 100 per cent US-made products deemed essential to military readiness.