Trapped: US Boss Held in Factory by Chinese Workers Over Dispute

Trapped: US Boss Held in Factory by Chinese Workers Over Dispute
Jun 27, 2013 By

Editor’s note: this article was translated and edited from, and looks at the recent story of American businessman Chip Starnes’s “hostage situation” in his company’s factory in the outskirts of Beijing. Starnes is the co-owner of US-based company Specialty Medical Supplies, and has been locked in the office at the Beijing factory for several days following a severance payment dispute with some of the employees. Since June 21, around 80 workers have encircled the factory refusing to let Starnes leave until their demands are settled. It has since been found out that the company shut down a large sector of its operations with many workers claiming they haven’t received any redundancy pay, and haven’t received salaries for months.

On June 23, it was reported by various domestic and Western media bodies that American Chip Starnes, co-owner of Specialty Medical Supplies, had revealed that he had been “held hostage” by workers at his plant at the Jinyurui Science and Technology Park in Beijing’s Huairou District. Workers who are surrounding the plant stated that they are not holding Starnes hostage, but are simply demanding unpaid wages and severance packages; the same that 30 other co-workers had received when one of the factory’s departments shut down. Huairou police have since stated that the situation is merely down to labor disputes and isn’t a “hostage situation” as some media institutions have named it.

Ongoing dispute

According to the company’s website, Speciality Medical Supplies, which was established in Coral Springs, Florida in 1999, set up operations in Beijing in 2003. The company specializes in the research, development and production of disposable medical products. At around 22:30 on June 23, the Huairou plant closed, with around 20 or so people guarding the gate. A police car was also parked outside the entrance of the plant. According to a female worker at the company, Starnes is also a legal representative of Speciality Medical Supplies, and is currently located in the factory’s President’s office. She stated that he isn’t being held hostage, and instead has complete freedom to walk around and even has food, drink, and fruit.    

A man surnamed Huang, who is the Vice-President of the plant, explained that the factory had practically been closed down, and that Starnes had already packed up all of the equipment. Huang added that Starnes was calculating the assets of the plant, and that there were no plans to continue production or receive further cash income. “The workers have begun to get restless. They think that the boss will run away soon.” Huang went on to explain that the company is also involved in a dispute with a previous amount of 2.7 million RMB of unpaid wages, and has yet to be resolved. Mrs Zhu, a representative of the workers involved in the dispute, said that the factory has been surrounded for four days and four nights now: “Now we just want our owed wages and compensation.”       

Starnes forced to sleep in his office

Upon entering the office building on the factory grounds, two female workers can be seen sitting outside the entrance which leads to the President’s office. The office is around 20sqm, and features a writing desk and a single mattress. On a sofa in the corner lies a military coat. On the table, there’s beer, a food box, and some fruit. “Usually, I can walk freely around the factory grounds, “explains Starnes, “though now I can’t even go out.” During the process of the ongoing dispute with his workers, Starnes has had to sleep in his office. Starnes revealed that Speciality Medical Supplies has had to gradually close their operations in China recently, and plans to move to Mumbai for further business. Due to this, Starnes arrived in Beijing on June 18 and subsequently laid off 30 employees, some of which had been with the company for nine years. “These employees received a generous amount of compensation,” said Starnes. When employees from other department got wind of the news and learned about the plans to move the factory to India, they began to demand for similar redundancy compensation. Starnes explained that from June 21, he has been stuck in his office surrounded by 80 workers who have blocked all of the exits of the factory. He also stated that some of the employees shined lights in his office and hit its window, making it tough for him to sleep.  

Officials from a Huairou labor union stated that during the afternoon of June 23, employees from the US Embassy went to meet Starnes to check if he had food to eat and was able to move around freely. They then decided that the incident was purely a financial dispute, and that they would not play any part in its resolution. “After finding out that I was safe, they left,” confirmed Starnes.

Currently, the Huairou labor union has become involved in the mediating between the two sides. On June 23, Huairou police confirmed that currently the dispute isn’t a criminal affair, and have remained at the scene to maintain order. After hearing this, the workers are determined to receive what they believe is theirs before Starnes leaves the area. There are now labor arbitration departments and various labor unions on the scene all getting involved with negotiations to solve the dispute, with over 30 workers signing an agreement with the departments stating they will appeal to a court if they don’t get their money.     

Plan to move factory to Mumbai

According to Huang, in order to safeguard their own interests, the workers had no other option but to block Starnes from leaving the factory. Huang stated that in lieu of the company’s decision to move the Beijing factory to Mumbai, Starnes began making arrangements for the plant to shutdown and for the needle making equipment to be packed away two months ago. “The factory is over 7000sqm, though a 200sqm building is used for the production of ethanol. Starnes promised that despite the fact the needle making equipment would be moved, he would leave the ethanol building open.” Huang went on to confirm that last week, Indian engineers came to assess the ethanol assembly line, and now the employees at the plant feel cheated.   

Last Friday, Starnes and an American colleague arrived at the factory and were immediately prevented from leaving by the workers who demanded a resolution. However due to the old age of Starnes’s colleague, the workers decided to allow him to leave and return to the US. Starnes explained that the original plan was to arrive at the factory and send all of the factory’s equipment to India, and admitted that he had already been given price assessments on all of the equipment and materials by his future co-operators in Mumbai. “This doesn’t mean that all of the factory equipment will be taken away however,” rebuked Starnes, “after they have been assessed, the company will receive two certificates. One is for the equipment that will be sent to India, and another is for the parts that will remain in Beijing.” Starnes explained that the reason the equipment that is set to stay in Beijing was also going to be assessed was because the company had agreed to get a loan from an American financial institution, and could only do this after their equipment had been assessed. From this a misunderstanding between the company bosses and the workers arose, though Starnes has expressed that they won’t simply fire the workers, and hope to meet their needs regarding compensation. 

Compensation already given to 30 other workers

“The needle production department (that is set to be transferred to India) has already been closed,” confirmed Starnes, “the company has decided that workers in Beijing who previously worked in the needle making section will be moved to the ethanol assembly line. There are 30 employees who aren’t willing to make this transfer, and they have let us know about their wishes to leave. We have agreed to grant them compensation regarding this.” Starnes revealed that most of the workers who express their desire to leave had been working at the factory for seven or eight years, and would receive generous compensation as a result. “The compensation that we gave the 30 workers that were released from their positions in the needle production department made the others jealous. Now, the company is looking to provide the other workers with a similar amount of compensation,” added Starnes. “However, we can’t offer this compensation to the workers who will be kept on at the plant.”         

In lieu of this, factory Vice-President Huang stated that for many years, the plant had in fact been stopping sales of materials to suppliers and breaking various promises with others, and in recent months, the President of the company had stopped the flow of funds to the factory altogether. “Before, the company owed its workers a two month’s salary. At that time, various local unions arrived and eventually signed an arbitrary agreement with the company. Up until now however, the workers still haven’t received all their owned salary.” With this background factor in mind, the employees of the factory have demanded that the bosses give them severance money.

A lawyer’s viewpoint

Beijing lawyer Ma Zengwei believes that it does indeed seem that the company owes the workers money. Ma advises that the employees go through a labor supervision department or an arbitration organization to appeal. Ma believes that they could also look into submitting a payment application through the various channels of the law. If it turns out that the company is intentionally keeping unpaid salary from their workers, then that constitutes a criminal offence, which can be followed up with a legal investigation of the company and its bosses. “The laborers have no power to totally restrict the boss’s personal freedom. It’s best to go through legal channels in order to solve this problem,” concluded Ma.   


Source: Wenxuecity

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Keywords: Chip Starnes Specialty Medical Supplies


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Pigs need to stop exploiting Chinese !!

Jul 03, 2013 00:15 Report Abuse


So the article points out that the company has not paid wages in 2 months and that there have been deal broken recently. I think that the workers are doing the right thing if this is indeed fact. I don't care the origin of the person, be they American, Russian, British, or Chinese, if they are not doing the right thing then the workers should defend their rights. Even the embassy of the US seems to think that there is something fishy here, why else would they simply say it is not a matter of their concern? I have met plenty of dishonest people including; Italians, Belgians, Singaporeans, and Americans.

Jul 02, 2013 19:06 Report Abuse


Let me get this straight. First this guy takes the jobs away from well-deserving Americans so he can take advantage of China's cheap labor, than he wants to close his plant down and move it to another place so he can get even cheaper labor, and now he has the nerve to not want to pay them for months. I would say the guy is getting what he deserves. This guy is a disgrace to America and China. He deserves to be tared and feathered. What a scumbag!

Jun 30, 2013 09:09 Report Abuse


Whilst I feel sorry for Starnes himself, given the ferociously high probability that the company involved located its manufacturing operations in China less due to benevolence and more due to wanting to take advantage of China's low wages and lack of workers' rights, I certainly don't feel any sympathy for the company. Hopefully the government will move to improve workers' rights, particularly given that China's economic development means that they no longer have to accept any old offers of foreign investment no questions asked.

Jun 28, 2013 23:29 Report Abuse


"He isn't being held hostage." Ha Ha Ha What a bunch of b.s.! Waaaaaaaay to go Chinaaaaaaa!!!!! Another sterling example of the way that YOU BARBARIANS treat people!!!!!! :( The international community has gotta love this!!!!!! lol. Let's see,there was the 16,000 dead pigs in the river near Shanghai. The other day I read about the Chinese guy who torched 5 cars because his wife broke up with him so he blamed someone else. lol. We've all read about the countless examples of food,milk,etc. from China poisoning,harming or killing people. And,I could go on and on and on and on,etc! LMAO.

Jun 28, 2013 21:06 Report Abuse


so the chinese get to feel what its like to have thier jobs outsource!

Jun 28, 2013 16:31 Report Abuse


how is it legal to do this to foreigners? if this was foxxcon the military would have arrested everyone.

Jun 27, 2013 08:38 Report Abuse