Chip Starnes, the American executive who has been held by his workers in his plant in Huairou, Beijing for the past six days, answers questions from a reporter at the front gate on Tuesday. Photo: CFP

Wearing the same blue shirt and jeans he has worn since Friday, Chip Starnes, 42, walked around his factory in Qiaozi, a quiet town in northeast Beijing, on a gloomy Tuesday morning. Tired but still smiling, he greeted reporters standing outside the factory gate.

It's been six days on Wednesday since the boss of Florida-based Specialty Medical Supplies, a US company that manufactures alcohol swabs and plastic injection devices in Beijing, has been held by his staff in his own factory, after employees accused him of withholding salaries amid fears of being laid off.

"I'm fine but I want to go back to my hotel room, take a shower and change into some decent clothes," he said on Tuesday in an interview conducted through the wire-mesh gate of the factory, with some workers watching or recording with their phones nearby.  

However, the workers won't allow him to leave the factory until the dispute is resolved, as they are worried that the American will flee without paying them.

"We aren't holding him hostage as he is staying in his office in his factory and is negotiating with his employees. We just want the money back," said a worker, surnamed Wang, at the gate.

Starnes denies the accusations and is backed by his two Chinese managers, who say they have paid all the salaries on time.

Continuing standoff

Inside the factory, machines have been packed and are ready to be transported to Mumbai, India, as the company has decided to move the plastic injection production there.

The company has been gradually transferring staff to the swab production line since last year and those who are unwilling to move have received severance packages.

"We're laying off the remaining 30 people from the plastics unit and paying them compensation, the others are demanding compensation as well," he said, "But agreeing to that is business suicide. I'm not going to compensate people who still have a job."

But one worker, surnamed Lu, told the Global Times that before the incident, the swab production line had already suspended operations eight or nine times a month due to a lack of demand.

"Our salary included basic wages and bonuses depending on workload. After being transferred to the swab production line, I can only get basic wages, which is about 1,000 yuan ($163)," said Gao Ping, a female worker. Many other workers agreed with her, telling the Global Times that they haven't been paid since April.

Gao and her colleagues are worried that the other production line won't be able to survive long and they will lose their jobs.

"Every business has ups and downs in production. It's normal," said Starnes, adding that he has received many new offers to keep the business going.

In the factory, holes can be seen in the yard where trees used to stand.  Some workers believe that the company is in such dire financial straits that it sold them to make some cash. "How can we believe that he is not going to shut down the entire factory and then flee without paying anything?" a female worker, surnamed Ma, asked the Global Times.

Outside the factory, many business partners also expressed concern, and continue to talk about the company still owing them money. "We can't let this American go till he has paid," a businessman surnamed Xing said.  

Ineffective labor union

This incident soon drew international concern after the Associated Press reported it on Monday, quoting the American boss as saying, "I feel like a trapped animal" with a picture showing him behind the barred windows of his CEO office on the first floor of the factory building.

Workers at the factory gate said that such reports by Western media were "terribly wrong," insisting that the boss only stayed in his office and tried to negotiate with them to resolve their differences and that there has been no physical conflict between the American and his workers. 

Starnes still has his passport and mobile phone with him, but says that he has had his Internet connection cut.

While obviously eager to make progress in the negotiations, Starnes says he should be allowed to go back to the hotel in the evening rather than stay at the factory 24 hours a day to solve the problem.

But the workers won't allow him to do that unless some agreements on related money issues have been reached.

"The reason they do that is that it's a foreign company, and the boss has a foreign passport," Geoffrey Crothall at China Labor Bulletin in Hong Kong told the Financial Times.

Lin Yanling, a professor of Labor Relations at the China Institute of Industrial Relations, told the Global Times that this kind of stand-off, caused by a labor dispute, is not rare in China, as sometimes workers have no other effective methods to show that their rights are being violated.

"The local workers' union should play a very important role in solving workers' claims or difficulties by better communicating with employers. But in many cases, they only get involved when an incident has happened and pay too much attention to keeping stability," Lin said.

A member of staff from the workers' union, surnamed Chu, told the Global Times on Tuesday that they are trying to help resolve the incident, but cannot reveal any details. 

Slowdown impact

The economic decline in China could be the reason behind labor disputes, especially with foreign companies in China, as workers feel uncertain about their futures, Lin said.

Lin told the Global Times that when the economy declines, companies' profits shrink and managers have to think of ways to reduce costs, such as moving the production line to a place with cheaper labor.

During this process, it's very unlikely that workers' rights and interests will be fully taken into account, Lin added.

"Slower economic development fuels workers' fears of losing their jobs, as well as fears of bosses running away without paying wages and severance packages," a 25-year-old worker surnamed Zhong, who works in a Japanese car manufacturer in Guangdong Province, told the Global Times. 

During the 2008 financial crisis, demand for Chinese products dipped, which resulted in many factories being shut down. The bosses then sold off all the factory equipment and disappeared, without paying several months' salaries.

"Such facts fuel the fears of workers, especially as the government is still lacking when it comes to supervision over such foreign companies," Li said.