Prime Minister John Key says he expects most of the 292 Ports of Auckland workers who are about to be sacked will be re-employed by the ports' company as part of a casualised new work force.
About 3500 people took to the streets of Auckland at the weekend to show solidarity with the workers, who are mainly stevedores, who are to be made redundant and replaced with contractors after seven months of contract negotiations failed.
Concern about a lack of guaranteed work hours have led to weeks of strike action by the workers.
Key was this morning asked about suggestions by the Maritime Union that the Ports of Auckland had been looking to make workers redundant all along to introduce a casualised work force to boost its profits.
"I think they went through a genuine good faith process," he told TVNZ's Breakfast programme.
The company believed it was losing business, primarily to the Port of Tauranga, because it wasn't competitive.
"Their view is unless they change, it will be death by a thousand cuts."
Ports of Auckland is wholly owned by the Auckland Council and operated through Auckland Council Investments Limited.
Demand from the council for a 12 per cent return from the company within five years, up from a current 6 per cent, had not lead to the dispute, Key said.
The port had struggled with financial problems for some time and cash flow issues had forced it to sell Queens Wharf to the Government.
"Unless that's an efficient workplace, unless it's competitive, ultimately they will continue to lose business."
The company was trying to make savings at the port to protect all its jobs, he said,
"And I guess they have moved to this issue where they want to go to outsourcing."
The company needed to find almost 300 workers and would take people with experience.
"I suspect quite a lot of the people who have been made redundant will actually reapply and funnily enough get their job back just through a different vehicle... the conditions will be different."
Workers at the port had historically been paid "pretty well".
"The average income has been about $90,000, so it hasn't been a badly-paid place.
"But the problem is flexibility when ships arrive and when staff get called out, how they can cope with that."
New Zealand companies needed to be competitive so they could compete internationally, Key said.
"Ultimately if they can't compete then you will go an see a situation where substitution takes place and you see goods coming from overseas."
Port workers in Wellington and Australia have also shown solidarity with their Auckland counterparts by refusing to unload ships handled by non-union workers in Auckland.
However, Key said he didn't believe the dispute would damage the country's exports by resulting in New Zealand ships not being unloaded at ports around the world because they had been handled by contracted workers.
"Why? It takes part in Tauranga today and takes place in other parts of Auckland ports today," he told Radio Live.
Should MPs be able to swear to uphold the principles of the Treaty?Related story: Oath wording strikes MP discord