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.