[email protected] 3 - The Mensch of Malden Mills

Nearly 30 years ago, a massive fire destroyed 3 buildings at Malden Mills, the textile company in Lawrence, Mass. that invented the fabric Polartec. It was the largest fire Massachusetts had seen for a century.  By the grace of God no one was killed. But it devastated the town. Just two weeks before Christmas, thousands of workers faced unemployment and fear that the owner would take the insurance money and get out of town.  Such was not the case. 

"I was proud of the family business and I wanted to keep that alive, and I wanted that to survive. But I also felt the responsibility for all my employees, to take care of them, to give them jobs." said owner Aaron Feuerstein, this week's Honorary Groove Enhancer! 

So the day after the fire, he announced he would rebuild the factory in Lawrence. Then in an uncommon display of generosity, he committed to continue paying his workers during the time it would take to rebuild the mill his family had operated for three generations in one of the state’s poorest cities.

 "I think it was a wise business decision, but that isn't why I did it. I did it because it was the right thing to do," he said. Others might have said the right thing to do would have been to take the $300 million in insurance and retire.  

"And what would I do with it? Eat more? Buy another suit? Retire and die?"  

And so for months afterwards, workers picked up their checks as if the factory were still open. All told he paid out $25 million and became known as the Mensch of Malden Mills. 

“I got a lot of publicity. And I don't think that speaks well for our times," said Feuerstein. "At the time in America of the greatest prosperity, the god of money has taken over to an extreme." 

Just 6 years later, the world would see just how extreme.

In 2001, with CEO Ken Lay at the helm, the energy giant Enron was brought down by a spectacular accounting fraud scheme masterminded by its executives. Resulting in what was then the largest bankruptcy filing in US history - to the tune of $74 Billion.

The very next year in 2002, WorldCom, once the second largest long-distance company in the US, filed for bankruptcy after it revealed that its executives had inflated its assets by $11 billion dollars!  Leading to losses of over $100 BILLION, tens of thousands of jobs, and the freedom of their CEO Bernard Ebbers who was sentenced to 25 years in prison.

Corporate and political corruption shows no signs of slowing down. The news is littered with these stories every day.  That is why I will shine a light each week on inspiring leaders to serve as desperately needed role models.

I hope that you will share their stories with others and help keep their contributions alive through people they never met and likely never even knew existed. 

Feuerstein was not guided by greed, butby love and by the values he took from the Torah, the book of Jewish Law.

"You are not permitted to oppress the working man, because he's poor and he's needy, amongst your brethren and amongst the non-Jew in your community," 

He spent the $300 million insurance money and borrowed another $100 million to build a new plant that is both environmentally friendly and worker friendly. And it's a union shop that never had a strike.

Polartec is used by many of the largest outdoor wear companies in the world including LL Bean, Eddie Bauer, Patagonia, and North Face.  Time Magazine also named it as one of the greatest inventions of the 20th Century.  

All of which makes the fact that this story doesn’t have a fairy tale ending that's much harder to tell.  Sadly, the millions he spent to keep his promises led to him ultimately losing control of the company.  

20 years after the fire, hundreds of workers' worst fears came true when under new ownership, Polartec LLC announced it was closing the Lawrence factory. 

Feuerstein who was no longer involved in the business called the decision “a disgrace.”

“All those jobs are lost, after we dedicated ourselves to keeping them. We considered our workers stakeholders, a part of the factory. A part of our family. They consider workers just a pair of hands. You can get a pair of hands in many places.”

Feuerstein led from his heart.  Perhaps there may have been other ways to navigate through the aftermath of the fire that might have prevented the ultimate demise of the factory in Lawrence.  In business, making decisions from the heart has a connotation of being lofty and naïve and arguably some of them probably are.

But for me and thousands of families in Massachusetts, the decisions that Aaron Feuerstein made from his heart were bold and courageous.  

When companies like Enron and WorldCom make decisions based on greed to help line the pockets of a very few, the world desperately needs more leaders like Feuerstein.

That is the goal of The Groove Enhancers Leadership Academy:  To train future leaders in the foundations, responsibilities and values of a healthy business. Most importantly how to lead with love . . . 

just like the Mensch of Malden Mills. 


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