KiwiRail is proposing to cut 41 manufacturing jobs in Dunedin, in a move the rail workers' union says is the result of the company sending manufacturing work overseas.
The proposal was being put to workers at the Hillside Workshop in South Dunedin on Thursday.
Rail and Maritime Transport Union general secretary Wayne Butson says the proposal is a direct consequence of KiwiRail's decision to send a $500 million contract overseas for the electrification of the Auckland rail network.
Mr Butson says the government should should force KiwiRail to procure locally made products.
But KiwiRail's chief executive, Jim Quinn, says there is not enough work to justify the 172 jobs at Hillside and the proposal will make the mechanical business unit more competitive.
"The business is in a state, which is pretty well documented, where it needs to rebuild itself and get itself on its feet commercially. Cutting the jobs means that we end up with the right degree of resource for the task in front of it."
Workers have until 1 July to comment on the jobs proposal and say they will fight it.