'Corporate Decency' Prevails at Malden Mills
THE transformation at Malden Mills is almost too good to be true - even to its president, Aaron Feuerstein.Skip to next paragraph
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Last December, a fire nearly destroyed the 130-year-old textile company in Lawrence, Mass., that Mr. Feuerstein's grandfather founded. Three of its manufacturing factories, which occupy a space the size of a track field, were reduced to charred metal and brick.
But today, the picture is completely changed. Ever since Feuerstein vowed on the night of the fire to rebuild and to keep on the payroll those workers left jobless by the disaster, his employees have been working at a frenetic pace to get the mill up and running again.
To Feuerstein - who has become the nation's icon of corporate decency - his workers' commitment is the direct result of his own loyalty. Yet, even he is surprised by the value of that loyalty.
"I always thought that perhaps in the long-run [my employees] would return to me a quality product that would make Malden Mills continue to excel," he says in an interview. "But I never dreamed there would be any short-term advantage."
Since the fire just three months ago, two of Malden Mills' three divisions are running again at near-full capacity. Also, 80 percent of the firm's 3,200 employees are back at work; and engineers plan to break ground in mid-April for a new manufacturing facility slated to be operating in January 1997.
In today's lean-and-mean corporate culture, where thousands of workers have seen their job security diminish, Feuerstein's actions, in his words, "struck a nerve with the American psyche."
Thousands of letters have poured in from well-wishers across the country. Dozens of local and national organizations have rushed to recognize him. Five universities will be awarding him honorary doctorate degrees. And he attended President Clinton's State of the Union address.
Yet to this no-nonsense chief executive, who has guided the family business for four decades, the accolades seem undeserved.
"Fifty years ago," Feuerstein says, "it would have been considered very natural for a CEO, if his plant burned down, to rebuild it and to worry about his people and ... his community and city."
Today, he contends, business leaders have lost their allegiance to their workers and communities and remain loyal only to the shareholder - all in the name of short-term profits.
"There's some kind of crazy belief that if you discard the responsibility to your country, to your city, to your community, to your workers, and think only of the immediate profit, that somehow not only your company will prosper but the entire economy will prosper as a result," he says, "and I think it's dead wrong."
In 1995, before the fire, Malden Mills sold $400 million worth of fabrics for apparel and upholstery. Its most well-known product is Polartec, a synthetic fleece used to make outerwear.
Feuerstein estimates that it has cost $10 million to pay those workers who lost their jobs from the fire - some 1,400 at first - for 90 days plus full health-care benefits for 180 days.