MELBOURNE, Australia-Planned layoffs following the establishment of a joint venture to build a polyurethane plant in Adelaide, Australia, led to a week-long strike at a Melbourne urethane unit and has disrupted Australia's automotive industry.
The Melbourne plant, run by Henderson's Automotive Group, is the only supplier of PU seat cushions to the Australian auto industry. The strike caused production losses totaling $45 million.
The venture between HAG and Woodbridge Foam Corp. may trigger the layoff of up to 160 workers, said Don Blair, chief executive with HAG.
Affected workers rejected severance packages put forward by HAG, even though their trade union advised them to accept the proposals.
A counsel for the Federation of Automotive Manufacturers said legal action may be taken against the strikers to recover money lost by car makers.