Aaron Feuerstein Paid Idle Workers After His Factory Burned

On December 11, 1995, a boiler explosion at Malden Mills in Lawrence, Massachusetts ignited a fire that destroyed three of the factory's buildings and injured 36 workers. Malden Mills made Polartec fleece fabric — the kind used in outdoor gear from Patagonia and REI. Aaron Feuerstein, the 70-year-old owner, could have taken the $300 million insurance settlement and moved production overseas. Instead he announced the next day that all 3,000 employees would continue receiving their full pay and benefits while the factory was rebuilt.

The pledge cost roughly $25 million. Feuerstein, who cited his Jewish faith and Talmudic ethics in interviews, said the workers had built the company's reputation and were not a cost to be managed around disaster. President Clinton invited him to the 1996 State of the Union address as a guest in the gallery. National newspapers treated him as a counterpoint to the wave of factory relocations and downsizing that had defined the early 1990s.

The story has a less tidy ending. Rebuilding took longer than expected, and Malden Mills entered bankruptcy protection in 2001, weighed down by the reconstruction debt. Feuerstein spent years trying to reclaim ownership from creditors. The company survived under new owners and still makes Polartec, now headquartered in Denver. Feuerstein's choice was not good business by any standard accounting — but it did preserve a workforce and a skill base in a mill town where both were scarce.