Korean shipbuilders are a dominant force in the global market, with names like Hyundai Heavy, Daewoo and Samsung occupying the industry’s top posts in terms of orders received. 

But the former darling of Korea Inc. is now in deep trouble, as the fleet of the world’s biggest shipbuilding firms are in rough waters, struggling with a global slump, low oil prices and stiff challenges from rivals, not least Chinese shipbuilders.

Specifically, the Korean shipyards’ excessive competition to win orders for offshore facilities — in part to make up for the slump in ship orders — is taking a heavy toll, as in the midst of falling crude oil prices, oil producers are refraining from building big drill ships and other offshore facilities. 

As a result, the three biggest shipbuilders — Hyundai Heavy Industries, Samsung Heavy, and Daewoo Shipbuilding and Marine Engineering — reported a combined loss of 4.75 trillion won ($3.98 billion) last year. HHI, the world’s top shipbuilder, reported a loss for the seventh straight month, with its stock price, which once hovered over 550,000 won per share, nose-diving to about 80,000 won.

This is clearly a crisis. No one in the industry — be they shareholders, executives, employees, suppliers and contractors or the creditor banks – would or should not think lightly of the situation.

So when we heard the news that the unions of the three major shipbuilders called a joint strike on Sept. 9, we could hardly believe our ears. The unions are apparently drilling holes in their own ships, which are on the brink of sinking.

The unions claim that they have no other choice because the management at the three firms have insisted on freezing pay. They accuse the management of shifting responsibility for mismanagement onto the workers.   

They are wrong: The management is doing its job to keep the ships afloat: For instance, Hyundai’s belt-tightening resulted in the firing of 100 executives and layoffs of 1,300 employees in the forms of honorary retirement, and Daewoo is selling off all its noncore assets and removing as much as 30 percent of its executive positions.

In contrast, the unionists are turning deaf ears to the industry’s call to share the pain. Even some of their fellow blue-collar workers have criticized the shipbuilders’ unions — whose members earn an average of 70 million to 80 million won per year — for their selfish pursuit of vested interests.

The Big Three continued their record-busting bad performance in the second quarter, largely due to the delivery of low-priced ships and a delay in the construction of loss-making offshore facilities. For example, Daewoo announced only last week that it had terminated a 703 billion won deal to build a drill ship because the contractor failed to make an intermediary payment.

Instances like this have forced the three shipyards to post combined losses of 3.78 trillion won in the April-June period, a new record. Their combined operating loss is estimated at 4.75 trillion won, also the largest-ever shortfall.

We should expect bigger waves in the making — the growing instability of the Chinese economy, the U.S. plan to hike interest rates and outflows of funds from emerging markets, among other things.

The Korean economy, including the shipbuilding industry, cannot afford a strike by workers who are paid well enough to be called “unions of nobles.” The three unions ought to withdraw their walkout plans.