Advertisement

Our coronavirus coverage is free for the first 24 hours. Find the latest information at tampabay.com/coronavirus. Please consider subscribing or donating.

  1. Archive

"Chainsaw Al' says: Let's make a deal

Corporate turnaround chief "Chainsaw" Al Dunlap enters a room like he enters a new company: fast, loud and like he owns the place.

Within 10 minutes, he has named his heroes: MacArthur and Patton; his eccentricities: three dogs named Cadet; and his plan for a rehabilitated Sunbeam: Sell it, merge it, or use it to take over a competitor.

The West Point graduate and former paratrooper, who earned his moniker by parachuting into troubled companies and slashing costs and jobs, is used to making an entrance.

"Some people think I'm the second coming and some people think I'm the antichrist, but you can't ignore me," says the 60-year-old Dunlap.

Usually, he leaves just as suddenly after imposing military discipline on companies on the brink of disaster.

This time he may do something different: stay.

After turning around nine companies, Dunlap is considering buying a competing company instead of selling his own. In that case, he says, he'll stick around _ just long enough to whip it into martial shape.

Ideally, a takeover target would be poorly managed, with strong brands in complementary products that have been "tarnished" in customers' eyes, as Scott Paper and Sunbeam products were when he started with them.

If another company buys Sunbeam instead, Dunlap says, he'll leave. The buyer would have to be an expanding global firm with strong franchises and a solid balance sheet, he says. One possibility would be a European firm seeking to make major inroads into the United States.

Wall Street demonstrated its faith in Dunlap's abilities by driving up Sunbeam stock by more than 50 percent in July 1996, when the company announced he would lead its turnaround.

They were rewarded last month with the news that the Delray Beach-based company exceeded analysts' expectations by earning $34.5-million in the third quarter, reversing an $18.1-million loss in the comparable 1996 quarter.

It was a repeat of Dunlap's turnaround of Scott Paper, which was losing $277-million in 1993. He sold it to Kimberly-Clark for $6.8-billion. Some analysts remain skeptical he can do the same at Sunbeam.

"This is not the paper industry, where you have a whole roster of billion-dollar companies that have experience in operating these kinds of plants," says Daniel Noll of Chapman Securities.

Sunbeam has been harder all around, Dunlap says. His colleagues, even his wife warned him he couldn't fix the appliance maker.

"This one was the worst," Dunlap says. "This was a corpse. We found a little pulse and hit it with a defibrillator. I'll tell you, it was hard to find that pulse. If there ain't no pulse, it doesn't matter if you wear sandals and come from Bethlehem _ you're done."

Not everyone's impressed.

To put Sunbeam in the black, Dunlap slashed half of the company's 12,000 jobs. Workers point out that he walked away from the deal with more than $100-million, mostly in stock.

"I understand what he's doing," says Mary Graeser, an alderwoman in McMinnville, Tenn., where Sunbeam cut 500 of a local plant's 700 jobs. "But that doesn't mean that we have to like it."

Blame the managers who put Sunbeam on the brink of extinction, says Dunlap, son of a union steward at a Hoboken, N.J., shipyard.

"When I come to a company, it's bad. It's either Dr. Kevorkian or me, and I've got a better record than he does," he says. "I don't think Sunbeam would've survived another nine or 11 months."

His popularity also suffers among members of the American Medical Association, which signed a contract to endorse Sunbeam products in exchange for royalty fees in the millions, then backed out after doctors and patients expressed outrage.

Dunlap sued, saying the AMA should honor its deal or pay $20-million.

"No one is above the law, including the AMA," he says. "If people do not honor contracts in the United States of America, our whole business establishment would come to a screeching halt."

Constitutionally incapable of mincing words, Dunlap often rushes in where other corporate chiefs fear to tread, including over his colleagues' feet.

On executive compensation: Most CEOs are "grossly overpaid."

On former AT&T chief Robert Allen, whom Dunlap blames for many of the long-distance company's problems: "He attempted to fix them, drew heat, and wrinkled like a cheap suit."

On professional corporate directors: "There's only one profession that rivals professional directors _ the oldest profession."

YOU MIGHT ALSO LIKE

Advertisement
Advertisement