Ethics, loyalty are tightly woven at mill : It seems Aaron Feuerstein was all business when he responded in an unlikely way to a plant disaster.
When Malden Mills burned to the ground just before Christmas last year, taking with it 1,400 jobs and seemingly the soul of this city, Aaron Feuerstein proved himself a man out of step with corporate America.
First, he gave every worker a $275 Christmas bonus. (“Do not despair,” his holiday note said. “God bless every one of you.”) Then he announced that all employees would receive full pay and benefits for at least 90 days. Finally, ignoring his accountants and advisors, he said the 90-year-old, family-owned mill would be rebuilt right in downtown Lawrence, where it had stood since the town’s heyday.
Coming at a time when corporate America was cutting jobs by the thousands, Feuerstein’s concern for his employees, many of them first- and second-generation Spanish-speaking immigrants, raised questions over what, if any, responsibility a chief executive officer had to his work force.
Skeptics in the business world said the 70-year-old Feuerstein had been foolhardy. Sure, altruism was fine, they said, but most companies could not afford to be a charity.
As it turns out, Feuerstein was neither a saint nor, most certainly, a fool. His decision not to abandon his workers had been based on a simple principle. Loyalty and profit go hand in hand: Superior employees produce a superior product, and loyal customers and loyal employees are cut from the same fabric.
Today, from his office window, Feuerstein can see laborers working around the clock to complete what he says will be the country’s safest, most technically advanced mill. The production of Polartec and Polarfleece--lightweight winter fabrics in demand by such upscale retailers as Eddie Bauer and L.L. Bean--was moved into a temporary warehouse and has reached pre-fire levels.
Meanwhile, all but 400 of the displaced workers are back on the payroll and of those not getting paid, most are being retrained for other jobs or will return to their old positions when Malden Mills’ flock division reopens.
Feuerstein paces across his office, peeling an orange. He is a religious man who studies Hebrew prophets and memorizes the work of English poets. Tall, gray-haired, craggy-faced, he speaks slowly, pausing in mid-sentence, palms pressed together, as though searching for the precise thought.
“Once . . . you . . . break . . . the workers’ trust,” he said, “I don’t think you ever get it back. You’ll never get the quality you need. Once you treat them like a cuttable expense, instead of your most important asset, you won’t recover. I am firmly convinced the degree of loyalty our people have extended Malden Mills is equal to or greater than what we have done for them.”
That does not seem an exaggeration.
“I’ve been here three years and I hope I can stay 30 more,” said mill worker Angel Aponte. “The way I see it, there isn’t anything Mr. A [as Feuerstein is known] could ask us that we wouldn’t do. I even heard one of the guys say they’d take a bullet for Mr. A.”
Although he may have had his doubters, Feuerstein’s compassion clearly caught the fancy of the nation. “This is what every CEO ought to be doing,” said outgoing Labor Secretary Robert B. Reich.
During the past year, Feuerstein has received two honorary college degrees, had breakfast at the White House, sat next to First Lady Hillary Rodham Clinton as her husband delivered the State of the Union speech last January and received a standing ovation from a gathering of top CEOs at Georgetown University.
Profiles of him in dozens of publications, including Reader’s Digest and Parade magazine, have brought Malden Mills’ products millions of dollars in free publicity.
Malden Mills, founded in 1906 by Feuerstein’s grandfather, Samuel, a Hungarian immigrant who once sold rags from a pushcart in New York, was Lawrence’s biggest employer, and a good one at that. It traditionally paid the highest wages in the textile business, came out of bankruptcy in 1982 with the two new products--Polartec and Polarfleece--that kept the payroll intact and refused to flee high-wage Massachusetts for the cheap labor of the South and Asia, as other mills had done.
The cause of the fire that injured 24 workers has not been determined, and Malden Mills is battling with its insurer over its $300-million policy. But Feuerstein is forging ahead with plans for increased capacity and rewards for his workers. Everyone has received a pricey Polartec jacket for Christmas, and year-end bonuses are in the works.
“Everything I did after the fire was in keeping with the ethical standards I’ve tried to maintain my entire life,” Feuerstein said, “so it’s surprising we’ve gotten so much attention. Whether I deserve it or not, I guess I became a symbol of what the average guy would like corporate America to be in a time when the American dream has been pretty badly injured.”
To which mill worker Paulino Morales, 61, raises the most provocative point of all: “Yeah, Mr. A keeps his promises. He’s someone you can trust to do well by you. But why should that be unusual for a CEO?”