Article July 14, 1997 Issue

Aaron Feuerstein on the miracle at Malden Mills

by Kim Shippey

The guest speaker at the Boston Rotary Club's thirty-sixth annual Governor's Prayer Breakfast a few weeks ago was Aaron Feuerstein, president and chief executive officer of Malden Mills Industries, Inc. In December 1995, a fire almost destroyed the 131-year-old textile company in Lawrence, Massachusetts, that his grandfather had founded. Three of its manufacturing factories, which occupy a space the size of a track field, were reduced to charred metal and brick. Unhesitatingly, Mr. Feuerstein announced his intention of paying full salaries to all his workers for the next ninety days, and full benefits for 180 days. Within three months, two of the mill's three divisions were running again at almost full capacity, and engineers were breaking ground for a new and even more advanced manufacturing facility, which is now in operation. Within seven months, 80% of the firm's 3,200 employees were back at work.

"From the moment I made the decision to [pay those salaries and benefits] and to rebuild Malden Mills, my problems were over," Mr. Feuerstein told his audience at the Boston Park Plaza Hotel, "because then my people took over, and they brought about one miracle after another.

"When the workers lined up to thank me for keeping them on, they said, 'We're going to pay back tenfold.' And they have!" said Mr. Feuerstein in a voice vibrating with emotion. Production has increased steadily, and continues to soar over pre-fire figures, he added.

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