Workers Hold US Factory Owner Hostage in China

The workers will not release Starnes until they are compensated.

June 25, 2013 — -- BEIJING--Surrounded by mountains, trees and farmland, Specialty Medical Supplies sits in the corner of the outskirts of northern Beijing. The campus became a flashpoint for unrest when 140 workers blocked the factory's exits, trapping American executive Chip Starnes in his office, until their demands are met.

The employees are refusing to release him until they receive their severance packages as well as their salary from the last two months.

ABC News spoke to workers and managers at the plant and pieced together this version of the events that led up to the current situation. They said trouble began last week when Starnes, 42, arrived in Beijing to lay off 30 workers in the plastics department to move the jobs to Mumbai, India.

As representatives from India began taking pictures in the plant to be closed and other workshops, employees quickly became worried that Starnes was going to sell the entire company and leave them all jobless. They began to demand compensation.

When negotiations between the two parties failed, the workers, fearing Starnes would flee the country, decided to hold him in his office until the issue was resolved.

A vice manager who identified himself only as Mr. Wang told ABC that the factory has not been very productive for months and Starnes had already begun to pack up the equipment. He also revealed that the company has stopped importing materials and paying bills. The trees on the factory grounds have been dug up to be sold.

"The workers panicked, they are afraid the boss is going to run off," said Wang.

Chu Li Xiang, representative of the Workers Union in Huairou district, insists that this is just an ordinary labor dispute.

"We are still in the process of mediating. China is a very big country, if we let him go, how are we going to find him?" said Chu.

ABC News was unable to meet with Starnes at his factory. We were told he and his lawyer are negotiating with union representatives. But during an interview with the Associated Press on Monday, Starnes, whose company is based in Florida, stated that he felt "like a trapped animal" and that the situation was "inhumane."

Workers, however, deny that they are mistreating or imprisoning Starnes.

"He has food and drinks delivered to him every day. He can walk around inside the factory during the daytime," says Gao Ping, one of the factory's workers.

Gao, 43, has worked in the factory's alcohol wipes workshop for six years. She is very disappointed with the actions of her boss. She told ABC News that the company still owes her two months' salary, 2400 RMB ($390 USD).

"I'm feeling very lost about my future. My whole family depends on me. I can't believe such a civilized boss would treat this matter as a big joke us. We have no one to protect us, but we will not let him go until we get our money back."