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Top 13 In 2013, #5: Held Captive In China

Mon, 12/16/2013 - 1:00pm
Joel Hans, Managing Editor, Manufacturing.net

Between December 9 and December 21, we'll be counting down the 13 biggest stories on Manufacturing.net throughout 2013. From pig problems (see below), to Tesla's on fire, and being held captive in China, we'll be looking into just why these stories resonated with readers here and elsewhere. For the full list, updated daily at 1:00pm EST until the 21st, visit the Top 13 In 2013 page.


In June, Manufacturing.net saw one of its most bizarre stories of the year — an American executive was being held hostage at his medical supply factory in Beijing by his workers, who demanded better pay. Chip Starnes, a 42-year-old co-owner of Coral Springs, got himself into a labor dispute that could have gone far worse.

From his first-floor office window, which had metal bars like a prison cell, Starnes said to nearby media, “I feel like a trapped animal. I think it's inhumane what is going on right now. I have been in this area for 10 years and created a lot of jobs and I would never have thought in my wildest imagination something like this would happen.”

The situation was a little more complex than the more simple wage-based disputes that have popped up all over China and other low-cost countries. After a few days of Starnes being trapped in captivity, it became known that he had laid-off 30 employees in the plastics division of the company, and offered those employees severance packages because of that action. While the other 100 workers at the plant were still in possession of their jobs, in better-performing divisions of the company, they also demanded “severance” packages equal to those who actually lost their jobs.

They also argued that they had not been paid for two months, a claim that Starnes denied emphatically: “They are demanding full severance pay, but they still have a job. That's the problem.”

Local labor unions demanded that Starnes pay those employees back wages, and a fair working wage, but he continued to posit that he had done so all along. 80 workers were blocking every exit around the clock and were depriving Starnes of sleep by shining bright lights on him, and banging on the windows of his office at night. Police gathered, but only to calm the situation — they clearly had no intention of raiding the plant to rescue Starnes.

Nearly a week after being held captive, Starnes was released after he and a labor representative had reached an agreement to pay the workers for their demands. Neither side gave details as to what that agreement was, but it likely involved severance packages for every employee, since they were all getting the axe after that little scuffle. Starnes said that some would be re-hired, however, showing his confidence — or misplaced faith — in those people.

"Yes!! Out and back at hotel," Starnes wrote in a text message. "Showered.. 9 pounds lost during the ordeal!!!!!!"

Chu Lixiang, the leader of the local union that had been negotiating with Starnes, celebrated the agreement, holding out the paperwork and smiling for the foreign media.

The situation shocked many of Manufacturing.net’s readers, and brought up a number of critical issues that come up when a manufacturer outsources its manufacturing to China, or another low-cost country where labor disputes are common, or bubble up into situations far worse than a relatively simple labor dispute. While a situation like this might happen in the U.S., there’s no doubt it wouldn’t be long before the local SWAT team showed up to take matters into their own hand.

When many are talking about re-shoring manufacturing from countries like China, if only due to increased transportation and labor costs there, this story brought up a completely human element — it takes a great deal of time, and at a certain elevated risk, to do business in another country. How much is that worth? For Starnes, it wasn’t enough to change his practices — he planned on heading right back to China once recovered from the hostage situation. But for every one that was willing to go back, there’s very likely many who followed this story and vowed never to factor that risk into the everyday of running a manufacturing company.

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