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US executive being held captive by Chinese workers

June 25, 2013 at 10:21 AM ET

Video: Chip Starnes, the American CEO of Specialty Medical Supplies, has been held captive at his factory since last Friday by workers who have been with him for nearly a decade. NBC’s Eunice Yoon reports.

An American executive is being held captive inside his Beijing factory by workers demanding severance packages for the jobs they fear are about to get cut.

Chip Starnes, president of Specialty Medical Supplies, recently moved part of his business from China to India to reduce production costs. He laid off 35 workers in the process, providing each with a severance package.

Rumors soon followed that the entire Chinese factory, which has operated in a Beijing suburb for nearly a decade, would soon be closing. That prompted demands from remaining workers, he told NBC News.

"They are demanding full severance pay but they still have a job. And that's the problem,” Starnes said.

About 100 employees have blocked doors to the heavily guarded factory since last Friday, refusing to let the 42-year-old executive leave.

Starnes said he has been intimidated but not physically harmed. His Internet access has been blocked and he can only communicate by phone or by shouting through the barred windows of his office.

"First couple days were very, very, tough. Nothing physical, more mental type of stuff going on," he said. "Staying around you. Anywhere you walk, 14, 16, 18 people following you."

Starnes, who said his lawyers have been talking to mediators from the district labor union, expressed disappointment that local authorities haven’t done more to help.

Outside the factory, which has operated in a Beijing suburb for nearly a decade, a number of plainclothes police officers could be seen standing. Authorities said they were in place to maintain order and not to end the stand-off.

Chu Lixiang, who heads the rights and interests department of the area’s labor union, said Starnes had not paid the workers for two months, and that workers feared the plant would close without paying them severance.

"The workers' request, firstly, will be for the company to pay up. Second, they (the managers) need to abide by the law, to deliver compensation as deserved. That's all," Chu said.

Foreign Ministry spokeswoman Hua Chunying told reporters at a daily briefing that she hoped the issue could be "resolved through dialogue".

Reuters contributed reporting to this story.

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