US Boss Held Captive by Workers Leaves China

Chip Starnes
Mark Ralston | AFP | Getty Images
Chip Starnes

The American businessman who said he was being held hostage by his factory employees in China over a pay dispute was released and flew to the U.S. on Thursday.

Chip Starnes, president of Florida-based Specialty Medical Supplies, told CNBC that local officials placed him in a car and labor unions said he had been released to go to his hotel after a deal was reached with workers. Starnes later told CNBC that he switched cars and headed for the airport, accompanied by his lawyers.

He caught a flight from Beijing to the U.S. where he will arrive on Thursday evening.

Starnes said he was worried for his personal safety and had been threatened by a vendor.

"I was, let's say, threatened this a.m...I freaked out," Starnes told CNBC in a text message.

He had spent the week held captive inside the company's plant in the Beijing suburb of Huairou, which produces alcohol pads and plastic blood lancets for diabetics. Speaking to CNBC's "Squawk Box" from a barred window in his office on Wednesday, he said he was on "lockdown" as around 100 current workers demanded severance packages similar to those received by 35 employees who were laid off. Starnes added on Thursday that he has lost 9 pounds in weight in the last week.

Workers are now "fully satisfied" with an agreement that has been reached, according to Chu Lixian, head of the rights and interests department of the Huairou District Labour Union. In all, 97 workers have signed up to the new deal and negotiations lasted through the night from 6 p.m. till 5 a.m. in the morning, the union said.

(Read More: US Boss Held by Workers Says China 'Wild West')

"The mass labor dispute incident for this unit has been resolved," Chu said at a press conference, according to Reuters news agency. "Both sides have come to an agreement through joint efforts made by Mr. Starnes and the workers' side. The results have turned out to be satisfactory."

Starnes, who was too tired to attend the press conference after his release told CNBC that new contracts will be signed on Friday with those workers who wish to continue working at the factory in the alcohol preparatory pad division.

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

Speaking on Wednesday, 42-year old Starnes - who has done business in Beijing for the last 20 years - told CNBC that he was being forced to pay severance packages to people who still have jobs at the plant.

Starnes said the workers "got kind of spooked" by rumors the entire plant was being closed after the company began moving its plastic injection molding division to India to lower production costs. He has said no more layoffs were planned.