Video: American boss held captive in China finally released

posted at 10:01 am on June 27, 2013 by Ed Morrissey

An American businessman held hostage by his own employees in Beijing has finally been allowed to return to his hotel, ending a week-long ordeal that workers triggered when they suspected he might be in town to close their plant. Chip Starnes’ rough week began when he laid off thirty workers and started sending equipment to a new factory in Mumbai:

Employees at Specialty Medical Supply on the northern outskirts of Beijing had allegedly kept Chip Starnes, 42, barricaded in the factory since Friday after hearing rumors that the company would be moving to Mumbai, India. Fearing that he would flee the country before a compromise could be reached, they set up barricades at the facility in order to negotiate a deal to save their jobs.

The company scheduled a news conference for this morning, but a manager said Starnes had already left the facility and returned to his hotel, adding that he was “very tired.” …

During his apparent confinement, Starnes made statements to the media through his barred office window. He said he felt like a “trapped animal” and that the workers were taunting him, as well as depriving him of sleep by banging on the door and shining lights through the window.

Starnes told The Associated Press that a deal had been reached overnight that would pay the scores of workers severance packages similar to the ones given to the laid-off workers, even though he had ensured them that they were not being laid off.

I’ve been following the story all this week, when it first began to appear in American media. Workers complained that they hadn’t been paid for two months, which Starnes denied, and also accused him of trying to close the plant without providing any compensation. Starnes wanted to move the manufacturing of his diabetes-testing equipment to Mumbai — presumably to take advantage of cheaper labor — but wants to keep his factory in China open to produce alcohol pads needed in the testing process.  That will still require more than 100 employees, so the severance issue is moot … at least for now.

The Wall Street Journal says that these kind of worker actions are becoming more typical in China, mainly because the economy is slowing and job markets are getting more competitive:

Work disputes are fairly common in China, and their causes depend on individual circumstances. It is unclear how often executives are held hostage. But in general, worker disputes are on the rise in China amid concerns about slowing growth. Earlier this month, the labor group China Labour Bulletin said it recorded 201 cases of labor disputes, including strikes, in China in the first four months of the year. That was almost the number of cases in the same period last year.

Foreign companies are by no means immune, adding to the risks that go along with the promise of China’s vast market and capable workforce. Three years ago, workers at parts factories in southern China used by Honda Motor Co. went on strike, affecting production.

The US Embassy didn’t do much to help, either:

Mr. Starnes said he called the U.S. Embassy for help over the weekend, fearful that tensions were mounting and that Chinese officials weren’t going to free him. “Unfortunately, this situation is a civil dispute, so there’s little I can do but wait it out,” said Mr. Starnes. He said he believes that as time passes, it will be easier to settle the dispute. The U.S. Embassy was unavailable immediately for comment.

Starnes insists that he won’t fold his business in China:

“I’ve got a lot of balls over here — a 100,000 square feet facility and machinery,” Starnes told CNBC. “I’m stuck here.”

Figuratively speaking, now at least.

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Wow, chill you Chineeses. It’s not like he wanted to open a new plant in South Carolina or something.

Akzed on June 27, 2013 at 10:04 AM

Well I know I would want to make every effort to keep my business in a nation where the workers imprison me.

Coming soon to an America near you, except that it will be law as enacted under the current regime: All workers will have the right to keep their boss from firing them and the use of tire-irons and molotovs is acceptable in enforcing said right.

Bishop on June 27, 2013 at 10:06 AM

Thomas Friedman and libfreeordie can’t wait until this comes to America.

gwelf on June 27, 2013 at 10:07 AM

Alternate Headline: Inspired by their Chinese Bethren, US Labor Unions Adopt New Negotiating Tactics

KS Rex on June 27, 2013 at 10:13 AM

Ambassador Stevens: “I feel your pain”

faraway on June 27, 2013 at 10:19 AM

They’ve received their severance pay. Close that plant and move it too. What goes around comes around.

unclesmrgol on June 27, 2013 at 10:27 AM

The guy’s gotta be a bonehead to go personally deliver the layoff message. He should’ve left that to local management, especially if it’s true that the company hasn’t been paying salaries for the last couple of months.

DarkCurrent on June 27, 2013 at 10:28 AM

Akzed on June 27, 2013 at 10:04 AM

When the conditions are favorable he will open a plant right here in US. Let the minimum wage be $ 15. And once the amnesty passes there will be abundance of workers. Right now there is shortage of workers who will do work Americans won’t do.
/
We have trade treaties with foreign countries. Is protection of life and limb not part of them?

antisocial on June 27, 2013 at 10:32 AM

Hahahaha! Outsourcing jerk gets what he deserves.

libfreeordie on June 27, 2013 at 10:32 AM

When the conditions are favorable he will open a plant right here in US.

You mean when American labor costs the same as Indian or Bangladesh workers? Doesn’t that kind of defeat the purpose?

libfreeordie on June 27, 2013 at 10:34 AM

Hahahaha! Outsourcing jerk gets what he deserves.

libfreeordie on June 27, 2013 at 10:32 AM

Own an iphone, by chance?

TexasDan on June 27, 2013 at 10:55 AM

Hahahaha! Outsourcing jerk gets what he deserves.

libfreeordie on June 27, 2013 at 10:32 AM

libfree will be loading us up on trains soon

faraway on June 27, 2013 at 10:55 AM

Hahahaha! Outsourcing jerk gets what he deserves.

libfreeordie on June 27, 2013 at 10:32 AM

You never disappoint…..But how can you stay off your meds so long?

You are a wonder.

Shaughnessy on June 27, 2013 at 10:57 AM

Earlier this month, the labor group China Labour Bulletin said it recorded 201 cases of labor disputes, including strikes, in China in the first four months of the year. That was almost the number of cases in the same period last year.

Only 201 over 4 months in a country of over 1.3 billion people? That seems incredibly low.

Not sure how you get “The Wall Street Journal says that these kind of worker actions are becoming more typical in China” from “That was almost the number of cases in the same period last year.” Staying about the same, even a little lower, is becoming more typical?

DarkCurrent on June 27, 2013 at 11:08 AM

During his apparent confinement, Starnes made statements to the media through his barred office window. He said he felt like a “trapped animal” and that the workers were taunting him, as well as depriving him of sleep by banging on the door and shining lights through the window.

The UAW is taking note of these tactics, and will soon use them against Government Motors, with the backing of our President.

Steve Z on June 27, 2013 at 11:09 AM

The UAW is taking note of these tactics, and will soon use them against Government Motors, with the backing of our President.

Steve Z on June 27, 2013 at 11:09 AM

hmmm… Obama already stole GM from its owners and closed hundreds of GOP donor owned dealerships

faraway on June 27, 2013 at 11:14 AM

Hahahaha! Outsourcing jerk gets what he deserves.

libfreeordie on June 27, 2013 at 10:32 AM

What are you, some kind of mercantilist/nationalist?

DarkCurrent on June 27, 2013 at 12:05 PM

Hahahaha! Outsourcing jerk gets what he deserves.

libfreeordie on June 27, 2013 at 10:32 AM

I was raised in the area of America called “little Detroit”, Dayton Ohio as such I have a very strong affinity as well as understanding of the need to insure quality as well as respect for workers. So please bear with me a bit.

Thus when I started my journey the first thing I tried doing was source in America to have our first product tooled and manufactured in the USA. After 50+ emails and letters we/ I received but 1 response and that was for only one part of the project and might add that was 1 part out of 120 that needed to be tooled and produced. The lone respondent wanted $68,000 for that one piece to be tooled and I later learned they were going to get it in China for $5,000.. talk about greed

Living in SoCal I then tried the maquiladora sections of the border with Mexico to at least keep it in North America. As with the previous attempts I was met with only 1 return reply and after meeting with that company it was suggested I try Taiwan.

Off to Taiwan I went and after meetings with two designers and manufacturers I was told they need to get advice from their assembly plants in China. It was at that stage I had to make a decision and I did. I went to China and investigated/ inspected companies as well as their assembly facilities on my own.

That started a three year journey of flights and inspections with the decision resting on my shoulders to insure we worked with a firm that wanted to work with me and I felt treated employees as I’d expected to be treatet.

As to quality and customer support our’s is exceeded by no one and that’s because we put all our products under the utmost scrutiny to include the hiring of independent contractor for inspections called Intertek Testing Services, a division of ETL.

So yes I manufacture in China, but not out of want but rather out of necessity. In fact had it not been for a small group within the factory I finally chose to have a vision similar to mine my company would not exist. My company wouldn’t directly and indirectly have lead to the employment of hundreds of people in the USA. Without their sharing my vision the US government wouldn’t enjoy my taxable income and the incomes of all the companies we sell to and through, along with the employees our products help to employ.

In closing given my own fellow countryman were either too busy, uninterested, unwilling or incapable of providing the manufacturing expertise I required or needed, people who want a high quality product should be thrilled someone shared our vision no matter where they are located. And the bottom line is we have the utmost pride in what we do and how we excel with our service to anyone who buys our products.

So in closing GFY libfree because some of us were ignored by our fellow countrymen when we tried to bring jobs here but conveniently targeted after being successful

theblacksheepwasright on June 27, 2013 at 12:15 PM

libfreeordie on June 27, 2013 at 10:34 AM

The days of $100 / hr HTNL developers are over. To stay competitive in the marketplace businesses try to generate maximum value / dollar. That is why doing business must be cheap. minimum wage prevents that.

antisocial on June 27, 2013 at 12:42 PM

Lovely people, the hostage takers. Their parents must be so proud.

Christien on June 27, 2013 at 3:53 PM

He is stuck there until the costs and/or dangers associated with having that Chinese facility become greater than he is willing to accept. He has a stake (investment) there. But that stake will mean nothing if it does not pay off in some reasonable fashion or he fears the instability and uncertainty of whether it will continue to function (or take him hostage if he happens to visit it).

If the workers frightened him enough, they would have found out the hard way that they are employees not owners and that if the owner decides that the investment is a write-off, say because of the risks, the facility closes and they have nothing that they can do to prevent that.

As for his moving some operations to Mumbai, it seems obvious that, all things being equal, i.e. the productivity of the Chinese workforce versus the productivity of the Mumbai workforce was likely similar so actual labor costs could come into play. Certainly the expected cost per unit of production, taking into account various other costs, associated with the move, made shifting some portion of his operation worthwhile in his estimation.

Russ808 on June 27, 2013 at 4:06 PM

What are you, some kind of mercantilist/nationalist?

DarkCurrent on June 27, 2013 at 12:05 PM

TSk Tsk. No he isn’t!

That would be me.

Ever been down in a coal mine? Then look for your hand?

These guys gave me an idea.

I was ready to call my UMW friends but then I got it straight that he is going to darkest Africa and not darkest Kentucky.

IlikedAUH2O on June 27, 2013 at 5:17 PM

This is the end result of using cheap labor in a land that not long ago copied Stalin for efforts in destroying capitalism and individualism, and where there is little concept of freedom.

You get what you pay for, folks. If all you’re willing to pay is peasant wages, guess what? The nation hosting you isn’t going to owe you very d@mn much.

MelonCollie on June 27, 2013 at 6:11 PM

What are you, some kind of mercantilist/nationalist?

DarkCurrent on June 27, 2013 at 12:05 PM

He’s a racist xenophobe. Only white Americans are allowed to be employed by fellow white Americans.

Daemonocracy on June 27, 2013 at 8:24 PM

I am surprised the Chinese government allowed this to happen in such a public way. Their slowing economy will slow even further without foreign investment.

Daemonocracy on June 27, 2013 at 8:27 PM