Malden Mills owner applies religious ethics to business


After many in the normally skeptical MIT audience wiped away tears while watching an NBC video on the Malden Mills fire, owner Aaron Feuerstein quoted the Torah and Shakespeare as he discussed his personal and business philosophy last Thursday in Kresge Auditorium.

It was, said Sloan School Dean Glen Urban afterwards, "a great lesson in technology and innovation, corporate responsibility, labor relations and morality."

Before Mr. Feuerstein spoke, the audience watched a 10-minute NBC Nightly News feature on the Dec. 11, 1995 conflagration and the impact of the event on Mr. Feuerstein and his employees.

In contrast to normal practice in an era of corporate downsizing and layoffs, Mr. Feuerstein told his employees on the night of the fire that they were the business and he was keeping all of them on the payroll for 90 days. It was an emotional moment. A man who worked at the plant told NBC, "I have never seen so many grown men cry."

Following the video, Dean Urban introduced Mr. Feuerstein.

At age 71, tall and lean with a chiseled face, penetrating eyes and wavy gray hair, Mr. Feuerstein is the patriarch of the family business that his grandfather founded at the turn of the century.

"I remember as a young boy, five or six years old, sitting at my father's table," he told the audience during the question-and-answer period. The discussion was about his grandfather who, when he started the business, insisted on paying his workers before sunset. His father explained that the practice was cited in the Torah, in the book of Deuteronomy (24: 14-15). Mr. Feuerstein read the passage in Hebrew and English.

"`You should not oppress the worker. He is poor and needy, whether he be thy brethren or a stranger'--and by stranger they meant all people, all faiths, all races," he said. "`And the very day of his work, you have to pay him his wages. And the sunset should not appear upon these unpaid wages because he can't afford it, and he would cry out against you to God, and you would have sinned.'"

Mr. Feuerstein condemned excessive pay to corporate CEOs, which he said was the result of "an unholy alliance between the moguls of Wall Street and executives with stock options."

He spoke as an advocate for research and development, for technology, for marketing and advertising, and for quality manufacturing.

The source of quality, he said, is the blue-collar workers, the doers--not just the engineers and the thinkers. "You can have the best engineers, the best R&D guy, the best technical expert, figure out how to get better quality. But in the last analysis, it is the man on the floor who is going to get that quality for you. If he feels he is a part of the enterprise and he feels he is treated the way he should be treated, he will go the extra mile to provide that quality."

`SAD COMMENTARY'

Entitling his talk "The People and the Community," he spoke principally as an advocate for an ethical policy towards employees and the community--to treat people the way "we expect them to treat us."

Mr. Feuerstein said, "A lot of the publicity I'm receiving is really not deserved. It is, rather, a sad reflection and commentary on our times.

"If you think of your business as a commodity business, that you are going to make the same thing as the next guy makes--that is a commodity marketplace. Then maybe one could argue that the only way to eke out a little more profit is to cut down on the hourly wages.

"Our vision of our business is not that we are in the commodity business. We want to distance ourselves as much as humanly possible from that commodity market. We are interested in making something different, to innovate, and with our research and development, and with our engineers, to make a product that is of better quality and has a better performance than anything else in the marketplace.

"If such is the case, then we are not into figuring out how to take the labor component and squeeze it by reducing the wages...

"We probably spend 10 times as much as the rest of our competitors put together on research and development. The ball game is in the marketing, the merchandising and the branding--in order to combine the better quality with a brand.

"We are probably spending 100 times more than our competitors on advertising. The brand is critically important. When the consumer goes to the store, how can he possibly know what he is buying--how can he give preference to Malden Mills and Polartec with our superior quality and performance--if there is no label, no advertising?"

A GIANT FIREBALL

Turning to a discussion of the fire, he described watching it in the midst of a terrible late-night traffic jam in Lawrence after a surprise 70th birthday party. "Everyone was gaping at the incredible scene--a veritable holocaust. Fire belching out of the windows of the old mill complex, joining together into a giant fireball covered by black smoke, going all the way up to heaven. What could one do in such a situation? It seemed hopeless.

"I held myself back. No time for crying, no time for weeping. As King Lear said, `Do you think I'll weep? No, I'll not weep. I have full cause of weeping but this heart shall break into a hundred thousand flaws or ere I'll weep.'

"Because," said Mr. Feuerstein, "the weeping is a way of feeling sorry for yourself," and one can't think creatively when weeping.

Three huge buildings were burning to the ground, even though Malden Mills had the latest fire-sensing devices and sprinkler system. "How it happened and what happened, we still don't know."

The fourth building, the critical building where the Polartec fleece is finished, was saved, Mr. Feuerstein said, by "a miracle. But as you know, every miracle is connected with people. Thirty-six of my people were in that building, fighting the fire all night long, and they succeeded," even when local and state fire officials said it was hopeless.

"I had to rebuild. There was no way I was going to take 3,000 people and throw them in the streets. And there was no way that I should be the one to condemn that community, which had suffered so much in the 20th century, to economic oblivion. No sir."

"Within four months we had 85 percent of the people back. Were it not for the slow payments of the insurance company, we would have over 100 percent back today."

The fourth plant, which prior to the fire had never produced more than 130,000 yards a week, is producing more than 200,000 yards of Polartec, he said.

Since the fire, "there's an extra responsibility on my shoulders because I acted the way that the people of America want corporate America to behave," Mr. Feuerstein said. The audience responded with immediate applause.

Mr. Feuerstein's talk, initiated by students in the Leaders for Manufacturing program, was sponsored by the Center for Technology, Policy and Industrial Development lecture series on Industry Leaders in Technology and Management.

A version of this article appeared in MIT Tech Talk on April 16, 1997.


Topics: Business and management

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