Wednesday, August 14, 2002
More proof that Wall Street believes that people who play by the rules are suckers. You may know the story of Malden Mills. Makes Polartec Mill in Lawrence, MA burned down in 1995. The owner, Aaron Feuerstein, paid his employees out of the insurance money and rebuilt the mill in Lawrence with double the previous capacity. They essentially are the market for fabrics for outdoorsmen everywhere. Unfortunately, they had to borrow to get the mill where it needed to be, and had to file for Chapter 11 as a result of the recession.
Their main creditor is GE Capital, one of those who only care about the bottom line - the consequence of this attitude was today's business scandals and book-cooking. So not surprisingly, since Feuerstein focuses on making Polartec and not the bottom line, GE Capital wants him out when Malden Mills emerges from bankruptcy.
I fear for their future now. GE will want their own kind in there, and that kind will just ruin that market, not to mention Malden Mills and Lawrence. They'll do the same thing the GOP did when they shifted spending to their own districts - cut out the expensive stuff (in Congress' case pork projects, in Malden Mills case R&D) while keeping the relatively cheap stuff (in business' case that's obscene CEO pay). You know, focus on quarterly profits while missing the the purpose of the business, which in Malden Mills case is to make Polartec.
