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US Boss Held by Workers Says China 'Wild West'

Wednesday, 26 Jun 2013 | 12:28 PM ET
US Boss Held by Workers Calls China 'Wild West'
Wednesday, 26 Jun 2013 | 7:18 AM ET
"Everything's at a standstill right now," said Chip Strarnes, talking to the "Squawk Box" news team about being held captive at his company in China. "I'm stuck here," he said.

The American businessman who says he's being held hostage by his factory employees in China over a pay dispute told CNBC Wednesday he hopes the "pretty good negotiations" now under way will bring his six days of captivity to an end.

Chip Starnes, president of Florida-based Specialty Medical Supplies, said in a "Squawk Box" interview from a barred window in his office outside Beijing that he's still on "lockdown" as about 100 current workers demand severance packages similar to those received by 35 employees who were laid off.

"I'm kind of being forced to pay severance packages to people who still have jobs," Starnes continued. "They got kind of spooked," he said, by rumors the entire plant was being closed after the company's plastic injection molding division began a move to India to lower production costs. He has said no more layoffs were planned.

(Read More: US Boss in China Says Workers Holding Him Hostage)

Authorities in China have done little to intervene, because they view the situation as a civil dispute.

Chip Starnes
Mark Ralston | AFP | Getty Images
Chip Starnes

"I'm still in the Beijing district, but when you move on the outskirts like this it becomes a little bit of the wild, Wild West," the 42-year-old Starnes said. "China looks at things a little differently where they see the people run the country, not the government runs the country."

(Watch: Day 6 For Hostage CEO in China)

Chi Lixiang, the head of Communist Party-controlled Union Rights Department, laughed at suggestions that Starnes was a hostage.

"What do you mean holding him hostage? … Our representatives said already that they are all female employees so how can they hold a well-built man hostage? You must be joking," he said.

U.S. officials in Beijing met Starnes on Monday and confirmed that he had not been physically harmed. "Conditions are fine right now," he told CNBC Wednesday. "In terms of like food and water anything like that, other than the first day, all that's been OK."

Starnes said he's been doing business for 10 years in Beijing, which has a "great work force."

"Unfortunately ... I've got a lot of machinery. I've got about a 100,000 square feet of facility. So I'm stuck here," he said.

But in spite his ordeal, Starnes said he thinks China is still a "good place to come," but companies need to "pick and choose the products" they bring there.

By CNBC's Matthew J. Belvedere. Follow him on Twitter @Matt_SquawkCNBC. CNBC's Eunice Yoon, NBC's Le Li and Henry Austin, and Reuters also contributed to this report.

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