U.S. boss held captive by angry Chinese employees released

Chip Starnes (R), president of Florida-based Speciality Medical Supplies, talks as his workers (L and 2nd L) listen during his news conference at the company's factory in the outskirts of Beijing June 26, 2013.

BEIJING (Reuters) - Chinese factory workers on Thursday released their U.S. boss, held captive for a week, after a compensation dispute was resolved, a company official and union representative said.

Chip Starnes, president of Specialty Medical Supplies, in the Beijing suburb of Huairou, was allowed to leave the factory and was resting in a hotel, the company official said.

The workers had demanded severance packages identical to those offered to 30 employees who were recently laid off, even though the firm planned no further layoffs, Starnes said earlier.

"The mass labor dispute incident for this unit has been resolved," said Chu Lixian, head of the rights and interests department of the Huairou District Labour Union.

"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."

The workers' demands followed rumors that the entire plant was being closed after the company's plastic injection molding division began a move to India to lower production costs.

"As of now my boss Chip feels exhausted after two harsh days and has gone back to a hotel, okay?" Specialty Medical General Manager Xing Shuang told Reuters Television. "This is all I have to say."

Starnes spent the week inside the plant, which produces alcohol pads and plastic blood lancets for diabetics, behind barred windows. He could not be immediately reached for comment.

The stand-off highlighted one of the lesser-known risks of doing business in China - that trust between workers and management, and faith in the legal system, is often low.

Starnes, whose company is based in Florida, flew to China on June 18 and his detention started on Friday.

(Reporting by Sabrina Mao and Terril Yue Jones; Editing by Nick Macfie)

(This story is refiled to removes incorrect byline)