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U.S. Man Held at China Plant Says Dispute Could End Today

U.S. businessman Charles Starnes stands behind the bars of his office window after being held hostage over a wage dispute at his Specialty Medical Supplies factory in Huairou, Beijing on June 25, 2013. Photographer: Mark Ralston/AFP via Getty Images
U.S. businessman Charles Starnes stands behind the bars of his office window after being held hostage over a wage dispute at his Specialty Medical Supplies factory in Huairou, Beijing on June 25, 2013. Photographer: Mark Ralston/AFP via Getty Images

June 26 (Bloomberg) -- An American businessman who says his employees haven’t let him leave the factory he owns on the outskirts of Beijing for more than five days said the standoff may be resolved as early as this evening.

Talks between the labor union, government officials and legal counsel that began yesterday continued all day today, Charles Starnes said in a phone interview today.

“Everybody is willing to stay up late and work late to get it resolved,” he said. “I’m fairly optimistic something will get done this evening. Hopefully.”

Starnes’s company, Specialty Medical Supplies is a Coral Springs, Florida-based manufacturer of alcohol prep pads and lancing devices. He said workers refused to let him leave over a wage dispute that began when the company decided to move part of its production to Mumbai, where labor costs are lower, and pay severance to some employees.

Workers who were to remain at the factory learned about the decision and decided to quit, demanding severance pay, according to Starnes. He had said yesterday that this was an “unreasonable” request given that he has no plans to close the Chinese operation. Today, Starnes said that position was being reconsidered.

The company is discussing an agreement under which it would give a lump sum payment to local government officials, with the government deciding how to distribute the money to affected workers, Starnes said. He declined to provide details on the payment, describing it as “six-figure.”

Workers Paid

Workers were paid their May salaries on June 24, Starnes said, denying a report in the China Daily newspaper that the U.S. company owed employees 2.7 million yuan ($439,200) in back pay.

The company may give the workers severance packages and then sign new contracts with them so that if they lose their jobs in future they wouldn’t then get more severance, he said.

“Mentally, we’ve come to the conclusion after five days of sitting here that we’ll chalk it up as a restructuring fee,” Starnes said.

Workers lined up with their arms tied together at the factory gates to prevent Starnes leaving last week and he was kept awake overnight, he said.

To contact Bloomberg News staff for this story: Henry Sanderson in Beijing at hsanderson@bloomberg.net

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net

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