Aaron Feuerstein: The CEO Who Chose People Over Profit
December 11, 1995. Just two weeks before Christmas. Around 8pm, a boiler exploded at Malden Mills in Lawrence, Massachusetts,
The Night Everything Burned
December 11, 1995. Just two weeks before Christmas. Around 8pm, a boiler exploded at Malden Mills in Lawrence, Massachusetts, setting off one of the worst fires the state had seen in a century. Flames shot 50 feet into the air. More than 200 firefighters battled the blaze for 16 hours. When the smoke cleared, three buildings were rubble and 40 percent of the factory was gone.
Seven hundred people had been at work that night. Now 3,000 employees faced unemployment in a town that was already struggling. The timing couldn’t have been worse. Everyone assumed the same thing: the owner would pocket the insurance money and move operations somewhere cheaper, like every other textile company had done.
Aaron Feuerstein had different plans.
The Decision
The day after the fire, with one building still smouldering behind him, Feuerstein stood in the ruins and made a promise. He would rebuild right there in Lawrence. More than that, he would keep every single employee on the payroll whilst the factory was being rebuilt.
“I’m not throwing 3,000 people out of work two weeks before Christmas,” he said.
He started with 30 days of full wages. Then he extended it to 90 days. Benefits continued for six months. He even paid out holiday bonuses. In total, Feuerstein spent $25 million of his own money keeping his workers afloat.
The press loved him. Politicians queued up to shake his hand. President Clinton invited him to the State of the Union Address as an honoured guest. He received 12 honorary degrees. They called him the Mensch of Malden Mills, a businessman who demonstrated moral leadership in business at a time when most executives prioritised shareholders over workers.
Feuerstein didn’t see what the fuss was about. “I got a lot of publicity,” he told reporters. “And I don’t think that speaks well for our times.”
Why He Did It
Feuerstein was a devout Orthodox Jew, and his faith shaped how he ran his business. He often quoted from the Torah: “You are not permitted to oppress the working man, because he’s poor and he’s needy.”
But there was also a practical side to his thinking. Malden Mills made Polartec, the lightweight synthetic fleece that outdoor companies like Patagonia and The North Face built their reputations on. His workers knew how to make it better than anyone. Losing them would mean losing the expertise that made the company successful.
His grandfather had founded Malden Mills in 1906. Three generations of Feuersteins had run it. This wasn’t just a business to Aaron. It was a responsibility.
When asked what he would have done with the insurance money otherwise, he was blunt: “Eat more? Buy another suit? Retire and die? No, that did not go into my mind.”
The Factory Rises Again
The rebuilt factory opened in September 1997. It was state-of-the-art, with better lighting and working conditions. Workers were grateful to be back. Productivity jumped 40 percent in the months after reopening.
For a while, it looked like the story would have a happy ending. Malden Mills was back in business, stronger than before. Feuerstein had proved that doing the right thing could work.
But then the bills came due.
When Good Intentions Meet Cold Reality
The rebuild had been expensive. The company was carrying $140 million in debt. Then three unusually warm winters hit in a row, crushing sales of cold-weather fleece. Customers who’d gone elsewhere during the rebuild didn’t all come back.
In November 2001, Malden Mills filed for bankruptcy. Feuerstein was forced to step down as CEO. He lost control of the company his family had owned for three generations.
The company limped along for a few more years, but filed for bankruptcy again in 2007. This time, there was no coming back. A private equity firm bought what was left, closed the Lawrence factory, and moved operations to Tennessee.
The Polartec brand survived. The jobs didn’t.
No Regrets
In 2002, a 60 Minutes interviewer asked Feuerstein if he’d do it all again, knowing how it would end.
“Yes,” he said without hesitation. “It was the right thing to do.”
His commitment to moral leadership in business never wavered, even as the company crumbled around him. When asked what he wanted on his tombstone, he replied: “Hopefully it’ll be, ‘He done his damnedest.’ You know, that I didn’t give up and I try to do the right thing.”
Feuerstein never apologised for his choices. He knew the textbooks would debate whether his generosity caused the bankruptcy. Market forces, warm winters, heavy debt from rebuilding, they all played a part. But to him, the question missed the point entirely.
Some decisions aren’t about profit and loss. They’re about who you are when everything’s on fire.
The Legacy
Aaron Feuerstein died on November 4, 2021, at age 95. By then, the factory was long gone. The jobs had moved south. The family business belonged to someone else.
But thousands of workers in Lawrence remember the winter when their boss refused to give up on them. They remember getting paid when they shouldn’t have. They remember a man who believed moral leadership in business meant something more than quarterly earnings.
In a world where companies routinely put shareholders above everyone else, Feuerstein’s story feels almost quaint. He paid a steep price for his principles. He lost everything his grandfather had built.
And he’d do it again in a heartbeat.
That’s not naivety. That’s character.
Sources:
- CBS Boston – Aaron Feuerstein Dies at 95
- CBS News 60 Minutes – The Mensch of Malden Mills
- The Boston Globe – Aaron Feuerstein Obituary
- Wikipedia – Aaron Feuerstein
- Wikipedia – Malden Mills:
- Mass Moments – Fire Destroys Malden Mills:
- Times of Israel – Mensch of Malden Mills
