Sunday, September 20, 2009

The Mentch from Malden Mills

The Mentch from Malden Mills
In December 1995, Boston businessman Aaron Feuerstein, a deeply observant Jew who prays at the Young Israel of Brookline, Mass. had just returned home from his seventieth birthday party, when a phone call informed him that his Malden Mills textile factory in Lawrence, Massachusetts, burned down to the ground. Thirty employees had been injured, some seriously.
Three thousand people worked at Malden Mills. When the employ­ees saw the devastation wrought by the fire, they assumed, as one worker put it, "The fire is out of control. Our jobs are gone."
The fire was indeed out of control, but Feuerstein was not.
With the mill in ruins, people who did not know Aaron Feuerstein predicted that he would take the $300,000,000 insurance money and dissolve the business, retiring quite comfortably. His announcement the day after the fire that he intended to rebuild in Lawrence and to continue paying his workers during reconstruction made news all over the country.
He kept his promises. Workers picked up their checks for months. In all, he paid out $25 million and became known as “the Mensch of Malden Mills” - a businessman who seemed to care more about his workers than about his net worth. The press loved him, and so did politicians. He received 12 honorary degrees. He became that rare duck - the businessman as national hero. His generosity brought him international attention and admiration. In January of 1996, with Feuerstein sitting in the presidential box, Bill Clinton acknowledged his actions in the State of the Union address.
Feuerstein explained that he drew on Jewish tradition when faced with the crisis: "When all is moral chaos, this is the time for you to be a mensch."
“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,” said Feuerstein a few years ago to Sixty Minutes.
“And what would I do with the 300 million? Eat more? Buy another suit? Retire and die,” asked Feuerstein. “No, that did not go into my mind.”
"I have a responsibility to the worker," he once told Parade Magazine, "both blue-collar and white-collar. I have an equal responsibility to the community. It would have been unconscionable to put 3000 people on the streets and deliver a deathblow to the cities of Lawrence and Methuen. Maybe on paper our company is worthless to Wall Street, but I can tell you it's worth more."
“I got a lot of publicity. And I don't think that speaks well for our times,” says Feuerstein, who is now 85 years old. “At the time in America of the greatest prosperity, the god of money has taken over to an extreme.”Where did he get the inspiration? “The Torah,” he told 60 minutes. "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," says Feuerstein, who spent $300 million of the insurance money and then borrowed $100 million more to build a new plant that is both environmentally friendly and worker friendly.
No, the story is not all roses. You know, the good guys don’t always come in first… Malden Mills, the company that rose from the ashes under Reb Aaron’s inspiration and leadership, became so mired in debt that it had to file for Chapter 11 bankruptcy protection. All our great Capitalists, of course, blamed Reb Aaron. “He was too generous,” they said.
Yet astonishingly it did not go under and it continues to garner lucrative profits. Malden mills Today thriving once again.
Yet even throughout the entire turmoil, Aaron Feuerstein said, “I do not regret it for a moment. I did the right thing.”
Barbara Lee Toffler is an adjunct professor at Columbia University's Graduate School of Business and an expert on corporate responsibility. When asked by The New York Times about Mr. Feuerstein's actions in the wake of the Malden Mills fire, and about the company's newly precarious economic prospects, she suggested that "it may have been that the desire to take principled action somehow blinded him to thinking long term."
She had it exactly wrong, of course. Long term was precisely what he was thinking. Long term for Professor Toffler and long term for Aaron Feuerstein mean two very different things. For Toffler, an economist, long term thinking means that in ten years you have money to go on yet another vacation. For Reb Aaron, “long term” means thinking in terms of what will allow you to fulfill your mission for which you were created.
This is what I call soul-money. His money was infused with soulfulness. His money and his conscience were linked in a perfect, blissful marriage. Work did not drain him; it invigorated him, because he was not only working as a selfish, greedy Adam 1, but as a servant of G-d, as an Adam 2. He knew that his success is a gift and that his primary role in the world is to “cultivate the garden and nurture it.”
People sometimes don’t grasp this truth: Barnie Madoff is not incarcerated only today. Ten years ago, when still on top of the world, he was also confined to a dungeon even while enjoying his home on the ocean (which you can now buy…). He was confined to a very shallow and horrible existence. His soul was dead.

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