In the winter of 1995, a fire broke out in the Malden Mills factory and was the largest fire that Massachusetts had seen in the last century. No one was killed, but the town was devastated. Malden Mills was one of the few large employers in a town that was already in desperate straights. Employing over 3,000 employees from Lawrence, Massachusetts and its neighboring communities.
“The only thing going on my mind was how could I possibly recreate it… I was proud of the family business and I want to keep that alive and I want that to survive. But I also felt the responsibility for all my employees, to take care of them and give them jobs…” – Aaron Feuerstein’s words from “60 Minutes” interview.
Aaron Feuerstein is the owner of Malden Mills, the CEO of the company and the third generation of his family to run the mills. The company during that time was contributing to the US economy approximately $100 million a year. The company is known for creating the textile known as Polartec, which gave them a 50% growth in sales in the height of its popularity. After the fire that occurred, Aaron made a decision, one that others in the textile industry found hard to believe. He decided to rebuild the factory in its original site. But that was not all; he made another shocking decision. “For the next thirty days, all our employees will be paid their full salary.” – Aaron Feuerstein, this was his statement when he announced to his employees his decision and again restated this a month later when he renewed his pledged to his employees to pay them their full salary. Total cost of this generosity amounted to $25 million.
However, not all good beginnings have good endings to it. Malden Mills borrowed money to rebuild the mill; beyond the money he would eventually receive from the insurance company. He built a large facility, counting on that his Polartec business would expand and his upholstery brand of fabrics would continue. His debt, however, was more than his...
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