Sunbeam and "Chainsaw Al"
Albert Dunlap, a.k.a "Chainsaw Al"
In June of 1996, Sunbeam had over 12,000 stock-keeping units (SKUs), which are individual variations of product lines. Every different style or color of a product had a different SKU. Sunbeam also had 12,000 employees as well as 26 factories worldwide, 61 warehouses, and 6 headquarters. This is when "Chainsaw Al" came into the picture. Albert Dunlap, also known as "Chainsaw Al," "Rambo in Pinstripes," or "The Shredder," received his reputation as one of the country’s meanest executives because he ruthlessly eliminated thousands of jobs. He was known for his ability to restructure and turn around troubled companies. Sunbeam Corporation needed help: its earnings had been rapidly declining since December 1994, and by 1996, the stock was down 52 percent and earnings had declined by 83 percent.
Dunlap’s reputation and business theory preceded him throughout the world. His operating philosophy was to make extreme cuts in all areas of operations, including massive layoffs, to streamline business. The concept of team work and group dynamics seemed to be foreign to Dunlap. He operated as if people are dispensable and fired them if they cost more than he felt they were worth. Dunlap even authored a book, Mean Business, in which he stated that making money for shareholders is the most important goal of any business. His philosophy was deficient in regards to ethical responsibility. Shareholder wealth, at any cost, was his only goal.
In order to make money for shareholders, Dunlap created and followed four simple rules of business: 1) get the right management team, 2) cut back to the lowest costs, 3) focus on the core business, and 4) get a real strategy. In following those four rules, Dunlap helped turn around companies in seventeen states and across three continents. According to Dunlap in the preface of his book Mean Business, the list of companies he has worked with include Sterling Pulp & Paper (1967-77), American Can (1977-82), Lily-Tulip (1983-86), Diamond International, Canenham Forest Industries (formerly Crown-Zellerback) (1986-89), Australian National Industries (1989), Consolidated Press Holdings (1991-91), and Scott Paper Company (1994-95).