The American businessman who said he was being held hostage by his factory employees in China over a pay dispute has been released.
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 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.
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.
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"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.