Tough exec ‘Chainsaw Al’ dies at 81
Albert J. Dunlap, a tough-talking executive whose ardor for turning around troubled companies by laying off workers and closing factories earned him the nickname Chainsaw Al, but whose career ended in an accounting scandal, died on Jan. 25 at his home in Ocala, Fla. He was 81.
The cause was prostate cancer, said Eric Carr, a friend and executive with the fundraising arm of Florida State University athletics, to which Dunlap pledged more than $40 million.
Dunlap portrayed himself as a foe of corporate waste and a servant of the shareholders who benefited from his actions. In the 1990s, when he ran Scott Paper, he laid off 11,200 workers; it was just one measure he took that brought him financial rewards of $100 million in salary, stock profits and other compensation after engineering the company’s sale to Kimberly-Clark in 1995.
“Sure, people had to get fired, but as time goes by that company will grow and prosper and new jobs will be created,” he told The South Florida Sun-Sentinel soon after.
Dunlap was soon hired by Sunbeam Corp., an appliance maker, and within a month anticipation on Wall Street about Dunlap’s plans to overhaul the company sent its shares soaring by 73 percent. He did not disappoint the traders: He promptly announced that he would halve Sunbeam’s work force of 12,000 people; close or sell most of its plants and other facilities; and pare its number of product lines.
“I’ve done this enough times to recognize the death gurgle of a corporation,” he told the reporter Hedrick Smith for “Surviving the Bottom Line,” a PBS documentary series. “And this corporation had the death gurgle.”
Unlike other corporate executives who laid off even more employees, the preternaturally confident Dunlap unapologetically boasted that the brutal efficiency of his methods was critical to saving the jobs that were not axed. In 1996, for example, he stepped forward when dozens of other executives refused to speak to Newsweek for a cover article, titled “Corporate Killers,” about downsizing.
“We’re painted as villains, but we’re not,” Dunlap said. “We’re more like doctors. We know it’s painful to operate, but it’s the only way to keep the patient from dying.”
He said he was an advocate of corporate governance reforms, like paying directors in stock instead of cash, to better align their interests with those of shareholders, and limiting directors to single five-year terms.
Dunlap played to the image of a bull in a corporate china shop, accepting nicknames like “Rambo in Pinstripes” and “The Shredder.” He preached his motto — “You’re not in business to be liked. If you want a friend, get a dog” — and wrote an autobiography with the title “Mean Business: How I Saved Bad Companies and Make Good Companies Great” (1996, with Bob Andelman).
His critics included Robert B. Reich, the secretary of labor in 1996, when Dunlap announced that he was laying off half of Sunbeam’s workers.
“There is no excuse for treating employees as if they are disposable pieces of equipment,” Reich said in an interview with the New York Times that year.
Albert John Dunlap was born on July 26, 1937, in Hoboken, N.J. Differing family accounts say his father was either a dockworker or a boilermaker and his mother either a store clerk or a homemaker. Albert played football in high school in Hasbrouck Heights, N.J., and boxed at the U.S. Military Academy.
After graduation, he trained as a paratrooper at Fort Benning, Ga., then served as an officer at a nuclear missile facility in Maryland.
He began his business career in Kimberly Clark’s management training program, working on “the third shift at a dirty, smelly paper mill,” he wrote in his book. After four years there, and rising to project leader, he was hired by Sterling Pulp & Paper as general superintendent and started turning its faltering operations around.
A decade later he joined American Can in its strategic planning group, then moved to jobs at Lily-Tulip Cup, a large paper cup manufacturer; Crown Zellerbach, a timber and pulp corporation; and Consolidated Press Holdings, a media and publishing company in Australia.
He was named chairman and chief executive of Scott in 1994, taking on a company burdened by high debt and depressed earnings. Within two years he had arranged its sale to KimberlyClark for $6.8 billion and left to take over Sunbeam.
But in June 1998, Dunlap’s corporate career came to a quick end.
Sunbeam’s board fired him in the wake of several quarterly earnings disappointments and regulatory filings that showed that Sunbeam had essentially applied 1998 payments — from retailers buying barbecue grills — to the previous year’s books, creating a false picture of a surge in 1997 sales.