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Workers Hold US Factory Owner Hostage in China

Zoonar/Thinkstock(BEIJING) --  Surrounded by mountains, trees and farmland, Specialty Medical Supplies sits in the corner of the outskirts of northern Beijing.  The campus became a flashpoint for unrest when 140 workers blocked the factory's exits, trapping American executive Chip Starnes in his office, until their demands are met.

The employees are refusing to release him until they receive their severance packages as well as their salary from the last two months.

ABC News spoke to workers and managers at the plant and pieced together this version of the events that led up to the current situation. 

They said trouble began last week when Starnes, 42, arrived in Beijing to lay off 30 workers in the plastics department to move the jobs to Mumbai, India.

As representatives from India began taking pictures in the plant to be closed and other workshops, employees quickly became worried that Starnes was going to sell the entire company and leave them all jobless.  They then began to demand compensation.

When negotiations between the two parties failed, the workers, fearing Starnes would flee the country, decided to hold him in his office until the issue was resolved.

A vice manager who identified himself only as Mr. Wang told ABC that the factory has not been very productive for months and that Starnes had already begun to pack up the equipment.  He also revealed that the company has stopped importing materials and paying bills.  The trees on the factory grounds have been dug up to be sold.

"The workers panicked, they are afraid the boss is going to run off," said Wang.

Chu Li Xiang, representative of the Workers Union in Huairou district, insists that this is just an ordinary labor dispute.

"We are still in the process of mediating.  China is a very big country, if we let him go, how are we going to find him?" said Chu.

ABC News was unable to meet with Starnes at his factory. ABC was told he and his lawyer are negotiating with union representatives.

Copyright 2013 ABC News Radio

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