Police have broken through a steel workers' blockade, which has threatened to bring Australia's car manufacturing industry to a standstill.

The dispute centres on the job security of 280 long-term employees at BHP Steel's Western Port mill in Melbourne.

The company proposed replacing maintenance workers with contractors.

BHP Steel is Australia's biggest steel maker and the blockade has had a major impact on the country's motor industry, which works to tight supply deadlines.

Police acted after the Australian labour court allowed car manufacturers Holden, Ford, Mitsubishi and Toyota to sue the unions if the blockade stopped production.

Deliveries have now left the factory for the first time in three weeks after mounted riot police were used to break the blockade.

Potential crisis

Car manufacturers - which have had to consider shutting down plants and standing down workers because of the strike - say they still face a production crisis despite the 400 ton delivery that has now left the factory.

If supplies continue to be disrupted, all four car companies say that production will continue until Friday, but that they cannot guarantee further operations.

Customers in the building, construction and other manufacturing industries have also been badly effected by the strike by workers from the Australian Manufacturing Workers' Union and the Electrical Trades' Union.

As the strike continues, BHP Steel and unions are in negotiations with the Australian Industrial Relations Commission in an effort to break the deadlock.