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U.S. Businessman Leaves Beijing Factory After Labor Standoff

Specialty Medical Supplies CEO Charles Starnes
Specialty Medical Supplies Chief Executive Officer Charles Starnes is surrounded by government officials and trade union leaders during a briefing at his Specialty Medical Supplies business in Huairou, Beijing. Photographer: Mark Ralston/AFP via Getty Images

An American businessman said he was able to leave his factory on the outskirts of Beijing yesterday after a standoff with his employees kept him inside for more than five days.

The factory’s Chinese workers had refused to let Charles Starnes, chief executive officer of Coral Springs, Florida-based Specialty Medical Supplies, leave the grounds over a wage dispute after the company decided to move part of its production to Mumbai, where labor costs are lower, Starnes said on June 26.

“Yes I am gone!” Starnes said in a mobile-text message yesterday, without commenting further. He declined to speak when contacted by mobile phone later in the day.

Higher pay and the relocation of factories are undermining China’s three-decade export model that kept production, cheap labor, infrastructure and supply chains in one place, allowing savings that made it the world’s supplier of low-end goods.

Specialty Medical, which has been in talks with local government officials and the labor union, discussed giving a lump-sum payment to government officials, who would decide how to distribute the money to affected workers, Starnes said on June 26. He declined to provide details on the payment, saying only that it was “six-figure.”

Workers accepted mediation and will receive their June pay plus some compensation, Xinhua News Agency said yesterday, citing the district trade union. The plant will continue to operate with newly hired workers, the news service said.

The agreement follows several rounds of talks with worker representatives, district labor administrators, the union and lawyers, Xinhua reported.

The company makes alcohol prep pads and lancing devices.

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