A strike in the town would be a catastrophe (8)
I believe the answer is:
calamity
'a catastrophe' is the definition.
(I know that calamity is a type of catastrophe)
'a strike in the town' is the wordplay.
'strike' becomes 'lam' (to 'lam' means to hit hard).
'in the' is an insertion indicator.
'town' becomes 'city' (city is a type of town).
'a'+'lam'='alam'
'alam' placed within 'city' is 'CALAMITY'.
'would be' acts as a link.
(Other definitions for calamity that I've seen before include "Catastrophe" , "A sad or disastrous happening" , "Musical set in Deadwood" , "Disaster, sudden great misfortune" , "Disaster, extreme misfortune" .)