U.S. exec. Chip Starnes held hostage by factory employees in China for 5th day

Updated at 6:46 a.m. Eastern

BEIJING An American executive held in his Beijing medical supply plant by angry workers said Tuesday that he's waiting for his lawyers to arrive to resolve a compensation dispute that highlights tensions in China's labor market.

Chip Starnes was enduring a fifth day of captivity at the factory in the capital's northeastern suburbs that makes products for Coral Springs, Florida-based Specialty Medical Supplies, but he told CBS News correspondent Seth Doane he could probably escape if he wanted to.

About 100 workers are demanding generous severance packages identical to those offered 30 workers being laid-off from the company's plastics division. The demands followed rumors the entire plant was being closed, despite Starnes' assertion the company doesn't plan to fire the others.

CBS News' Doane was allowed into the factory Tuesday morning, where Starnes, 42, told him, he felt he was being held in "a cage like an animal."

Asked by Doane whether he could simply hop over the factory fence and escape, Starnes said he, "could absolutely do that," but felt it "would probably be the wrong impression to give at this point in time."

"There's been no solution in terms of anything between us and them," Starnes told the AP. He said he was waiting for his lawyer to arrive and then would "start to work on some sort of solution to the issue one way or another."

A local union official representing the workers in talks with Starnes, Chu Lixiang, said the workers were demanding the portion of their salaries yet to be paid and a "reasonable" level of compensation before leaving their jobs. Neither gave details on the amounts demanded.

Chu said Starnes hadn't paid the workers for two months. She said they feared the plant was closing and that he would run away without paying severance.

Gao Ping, a six-year employee, told Doane, "We women can't hold the boss hostage... We're negotiating. He didn't pay us wages." She said she hadn't been paid about $400, roughly two months' salary. Others told CBS News the same.

Starnes said that since Saturday morning, about 80 workers had been blocking every exit around the clock and depriving him of sleep by shining bright lights and banging on windows of his office.

The standoff points to long-ingrained habits among Chinese workers who are sometimes left unprotected when factories close without severance or wages owed.

Such incidents have been rarer as labor protections improve, although disputes still occur and local governments have at times barred foreign executives from leaving until they are resolved.

Starnes, said he'd been coerced into agreeing to meet workers' demands by Tuesday.

Starnes said the company had gradually been winding down its plastics division, planning to move it to Mumbai, India. He arrived in Beijing a week ago to lay off the last 30 people. Some had been working there for up to nine years, so their compensation packages were "pretty nice," he said.

Some of the workers in the other divisions got wind of this, and, coupled with rumors that the whole plant was moving to India, started demanding similar severance packages on Friday, Starnes said.

Starnes explained to Doane why they were moving part of the medical supply factory to India. He told CBS News that when his company started business in China ten years ago, "say we needed 20 positions, we'd have 200 people."

That has changed, however, and Chinese workers are driving a harder bargain now.

"I think they're more educated, they're more focused on higher-tech stuff right now," he told Doane. "If you're in an industry like this that does require a little bit more labor -- you're starting to experience the shrinkage in that."

China's labor shortage is expected to grow even more acute as workers favor higher-skilled jobs, reported Doane. Here, Chinese workers told CBS News they were anxious when they saw equipment being packed up--and people laid off.

Doane reported that while Starnes was allowed a little more freedom on Tuesday, he had not been allowed a fresh shirt. He told CBS News he'd barely slept in past days.

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