US firm boss freed; Union 'OK' with agreement

Chip Starnes, president of Florida-based Speciality Medical Supplies, returns to the room where he was being detained as factory workers block journalists trying to follow him after his news conference at the company's factory in Huairou district, Beijing, on Wednesday. KIM KYUNG-HOON / REUTERS

A US company executive who was held captive by his workers in a plant in Beijing over a financial dispute has been freed after the local trade union intermediated in the case.

Chip Starnes, 42, left his plant located in the northeastern Huairou district on Thursday with his lawyer after being trapped in his office by workers since last Friday over disputes on salary and severance packages.

The two sides reached an agreement after final negotiations started on Tuesday afternoon with lawyers present.

Both sides were satisfied with the final result, said Chu Lixiang, director of the trade union's labor rights department and the intermediary on the issue since Saturday.

Chu said at a news conference held inside the plant on Thursday that the agreement was reached earlier that day after 97 workers signed settlement agreements at 5 am.

Starnes quietly departed the plant at about 11 am when the news conference started, and he returned to his hotel, according to Xing Shuang, general manager of the plant. China Daily was unable to reach him for comment.

His office, where he was trapped, was empty on Thursday, and some food was left on a table in the room.

Starnes arrived in Beijing last week to lay off about 30 people from the plastics department, all of whom were given severance packages.

He said because of cheaper labor costs and the exchange rate, he decided to move the department to India.

Rumors spread that the entire plant would move to India, despite Starnes' promise that other departments would stay.

Some workers from other departments, who said they had not been paid for two months, started demanding similar severance packages last Friday and barricaded Starnes inside the plant.

Most workers received money after agreements were reached on Thursday.

Gao Ping, 43, an employee at the plant, said that she received the unpaid two months' salary and a severance package, totaling 17,000 yuan ($2,700). Her average monthly salary was 2,000 yuan.

She said she was "very satisfied" when she heard the result after a sleepless night.

In previous reports, Starnes said after the dispute came out, he still thought China was a great place to do business and he will continue his investment in the country.

He said he planned to get back to business, and even rehire some of the workers who had been holding him. "We're going to take Thursday off to let the dust settle, and we're going to be rehiring a lot of the previous workers on new contracts as of Friday," he was quoted by the Associated Press as saying.

Another manager surnamed Huang said the company will make adjustments for other business in China as the plastic division moves to India.

Huang indicated a possibility that the plant will move the business to other places in China and declined to give more details about when operations in the Huairou plant will resume.

China's investment policy was fair to overseas companies, but they should also abide by Chinese laws and regulations, said Chu Lixiang, the labor union official. "If they all obey Chinese laws and regulations, labor disputes will not happen," Chu said.