New CEO at Malden Mills follows a legend
Like the second U.S. president who succeeded George Washington, the new head of Malden Mills Industries will try to follow in the footsteps of a legendary leader.
The name of Spillane's predecessor, Aaron Feuerstein, is practically synonymous with corporate generosity because of the lengths he went to protect workers at the Lawrence textile maker. But Spillane is eager to get going, even if filling those shoes will be difficult, if not impossible.
Feuerstein gained national acclaim when he refused to lay off his 1,200 workers and rebuilt after a 1995 fire destroyed the main factory of a company best known for its Polartec fleece.
Now it's up to Spillane, a former executive for Tommy Hilfiger U.S.A., to put his own stamp on a company that was run by the Feuerstein family for three generations before bankruptcy interrupted that legacy in 2001.
Spillane, who was named president and chief executive officer July 26, must satisfy lenders and customers who stuck by Malden Mills in hopes the company would return to profitability, even as it resists pressure to move jobs overseas.
Spillane also faces the task of winning over 1,000 workers and local residents accustomed to the Feuerstein family's centurylong commitment to the community.
"It's a tough act to follow," said Paul Coorey, president of Malden Mills' largest union, with 550 members. "Everybody's watching him like a hawk."
Spillane's appointment as CEO came a month after Feuerstein quietly stepped down as president and chairman. Two weeks later, the 78-year-old underwent emergency heart surgery, from which he is recovering.
Despite his illness, Feuerstein is trying to line up financing so he can exercise an exclusive option to buy back a controlling interest in the company, a move he says is essential to keeping local jobs. The company is controlled by creditors.
Spillane has taken over day-to-day leadership from David Orlofsky, who was appointed to temporarily oversee operations and finances during the bankruptcy. The company emerged from Chapter 11 last fall.
Spillane said it's too early to make promises about jobs and wages, which average about $12.50 an hour for production workers. But he wants to honor the Feuerstein family's legacy.
"It you wanted the prototypical plant-shutdown guy, it's not me," he said. "The board is looking to make this company profitable again, as am I. We don't yet know enough to know what's going to happen."
Spillane has been reluctant to introduce himself to Feuerstein while the company's former leader recovers from surgery: "My hope is I get to know him at some point and earn his respect."
Spillane said Feuerstein's effort to regain control of the company is not a distraction. He declined to comment on whether a return to family control would help Malden Mills. He also was cautious about prospects for gaining the workplace and community respect Feuerstein commanded. "I've tried not to think about it," he said.
Feuerstein's son, Daniel, issued a statement saying the family wishes Spillane "every success."
The brick factory where Malden Mills produces Polartec fleece for customers including Lands' End, The North Face and the U.S. military is far from New York's Garment District, where Spillane, 44, spent much of the past 14 years in the apparel industry.
Now he will devise a plan for a company he said has lacked direction because of distractions, including the fire and bankruptcy.
Orlofsky said the privately held company has been roughly breaking even, with revenue forecast at nearly $170 million this year.
"This is not a job for the faint of heart," Orlofsky said. "If you look around at the domestic textile industry, it's littered with the carcasses of companies that couldn't adapt."
One bright spot is Malden Mills' contracts to supply specialty fabrics to the military. A defense-appropriations bill signed Thursday includes $9.9 million in contracts for the company.
In addition to 1,000 employees at plants in the Merrimack Valley cities of Lawrence, Methuen and Hudson, N.H., the company has 300 workers in Europe, most at an old plant in Germany.
Cesar Aguilar, a former Malden Mills executive vice president who left in March, said Spillane faces a "real balancing act" resisting pressure to move jobs to a country like China, where Malden Mills two years ago negotiated an agreement with a firm to produce fabric.
Spillane welcomes the challenge. "There were easier, more traditional opportunities for me out there ... But this was just too great an opportunity to pass up."