Chinese factory works hold U.S. Executive Hostage -NYTimes.com

Standoff in China Drags On for U.S. Man Held by Workers – NYTimes.com. (Article written by Dan Levin, see link). There is an interesting story in Beijing China, about a labor dispute by Chinese workers and an U.S. Executive, Chip Starnes, age 42, founder and President of Specialty Medical Supplies, based out of Coral Springs, Florida. Apparently, Mr. Starnes, had come to Beijing to (gradually) outsource the company to Mumbai, India. He had the assembly line closed for the past month and a half, and had just fired the last 30 employees of the injection molding section of the plant. These 30 workers said that Mr. Starnes had not paid them for two months. Because of these circumstances, the employees took matters into their own hands. (In China, the police do not get involved and it is rare for lawyers to get involved, because lawyers are very scarce. The government of China often favors economic development over labor rights, leaving workers with little recourse to resolve salary disputes). In this case, the remaining of the 100 workers, fearing that the entire plant was being permanently closed down and that the CEO, who was about to disappear without paying them what was owed, blockaded the plant. As of Tuesday, June 25th, Mr. Starnes was still being held “hostage” for the fifth day. He is not able to leave the building. He has been getting three meals a day, but, also, at times, would get loud noises to interrupt his sleep.. Mr. Starnes has been “negotiating” with Labor, possibly under duress. Mr. Starnes said that there were no unpaid wages, “They were all paid on Monday.” He was taken hostage on Friday. The official statement from the company says that it was just an oversight that those employees hadn’t been paid for past two months.

In the interview, Starnes bemoaned his fate, saying local officials were pressing him to provide lavish compensation to workers who were not scheduled to be laid off. “The union just wants to do anything that will calm the people,” he said. (Actually if that was me in that position, I would like to calm the people down, but then he must have a death wish. -Ed.) Continues Starnes,”They are asking me to commit business suicide.” The factory was producing goods until the workers went rogue, he said. End of Story.


Sorry, Mr. Starnes, I really don’t believe much of what you are saying. Labor disputes are not very common in China, especially one that involves a foreign investor or worker. There have been reports of up to 200 labor disputes for the year 2013, thus far, mostly very minor. But, unlike the U.S. with labor disputes, police and lawyers are rarely involved. For those of you who outsource American jobs and get involved in foreign countries and have labor disputes, I have very little sympathy for you. You knew what you were getting into when you went there. Beware the customs of foreign countries. Don’t try outsourcing from China. Better yet, don’t move your company from the U.S. in the first place. Buy American!

Addendum (June 28, 2013)

Mr. Starnes was permitted to leave after the pay dispute was resolved. Mr. Starnes has previously said that the workers’ demands were unjustified. Details of the compensation deal were not given. The district labor official, Chu Lixiang, said all the workers would be  terminated, although Starnes said some would be rehired later. I won’t think the Chinese workers will be holding their breath over that promise.


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