Albert John Dunlap (born July 26, 1937) is a dismissed American corporate executive. He was renowned as a professional turnaround and downsizer specialist, although it was later discovered that his reputation change was a complicated deception. The cruel methods he used to streamline failed companies, especially Scott Paper, won him by the nicknames "Chainsaw Al" and "Rambo in Pinstripes". However, his career effectively ended after he engineered a major accounting scandal at Sunbeam Products, now Sunbeam-Oster, which ultimately hurt the company. He is prohibited from serving as an officer of a publicly traded company in the United States. Layoffs and widespread accounting fraud have put it on some of the worst CEO lists.
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Born in Hoboken, New Jersey, Dunlap graduated from West Point before being hired by Lily Tulip Cup and Scott Paper.
He engineered a massive accounting fraud at Nitec, a paper milling company in Niagara Falls, New York. He was company president from 1974 to 1976, when he was fired for his rough management style. Audits by Arthur Young (now part of Ernst & Young) reveal many irregularities, including increased inventory and sales that do not exist - a situation similar to the next Sunbeam case. The end result is that the $ 5 million Nitec profit for 1976 is actually a $ 5.5 million loss. Nitec sued Dunlap for fraud but ultimately forced out of business. However, Dunlap never mentioned Nitec in his resume, and the scandal was not widely known until reported by the New York Times after the scandal at Sunbeam.
Dunlap guided James Packer for three years in the late 1980s.
Dunlap was CEO of Scott Paper in the 1990s. He sold Scott Paper to Kimberly-Clark in 1995 for $ 7.8 billion and walked off with a $ 100 million gold parachute.
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Sunbeam
He took over as chairman and CEO of Sunbeam in 1996. His methods resulted in Sunbeam's revenue reporting of $ 189 million in 1997. However, he was unable to find a buyer in 1998. Dunlap then decided to buy a control interest in the manufacture of camping equipment Coleman , maker of Signature Brands coffee machines (best known for making Mr. Coffee) and First Alert smoke detector maker. Within two days, Sunbeam shares jumped to an all-time high of $ 52 per share.
However, industry insiders are suspicious when they find certain seasonal items being sold at a higher than usual volume for the whole year. For example, a large number of barbecue grills are sold during the fourth quarter. It turns out that Dunlap has sold the product to a retailer at a substantial discount. The products are stored in a third party warehouse for delivery later. This strategy, known as "bill and hold", is an accepted accounting practice during sales ordered after shipment. However, Dunlap immediately ordered the sale. Many shareholders feel they have been tricked into buying shares of much lower value than they really are, and they filed a class action lawsuit against Dunlap and Sunbeam.
Reports of Dunlap's method used to inflame revenue led the board to review Dunlap's practice in June 1998. It turned out that Dunlap had sold retailers far more merchandise than they could handle. With overcrowded stores, unsold inventories accumulate in the Sunbeam warehouse. As a result, Sunbeam faced a loss of $ 60 million in the second quarter of 1998. Dunlap's search for Sunbeam buyers in 1997 was timed so that large inventory-related losses will be revealed after the sale closes. The company's financial controller also told the council that Dunlap had told him to push the limits of accounting principles. On June 13, Dunlap was fired. The shareholder's lawsuit against Dunlap continued until 2002, when he agreed to pay $ 15 million to settle the allegations.
In 2001, the Securities and Exchange Commission sued Dunlap, alleging that he had engineered a massive accounting fraud. Also mentioned in the lawsuit were four other former Sunbeam executives and Phillip E. Harlow, principal partner for Sunbeam's account with Arthur Andersen LLP. The SEC investigation revealed that Dunlap and others had created a greater impression of loss in 1996 to make it look like the company had undergone a dramatic turnaround in 1997. With SEC estimates, at least $ 60 million of Sunbeam's income in 1997 was a fraud. He also offers an incentive for retailers to sell products that should be sold by the end of the year, a practice known as "channel stuffing." The SEC also believes that the purchase of Coleman, Signature and First Alert was made to hide the growing Sunbeam problem. Sunbeam never recovered from the scandal and was forced into bankruptcy in 2002.
Dunlap is also suspected of deviation in Scott Paper. Shortly after the shareholder completion, he agreed to pay $ 500,000 to complete the SEC fee. He is also prohibited from serving as an officer or director of a public company. The Justice Department investigated the management of Sunbeam during Dunlap's tenure but in the end did not file any charges.
Business philosophy
Dunlap believes that the ultimate goal of any business should be to earn money for its shareholders. With all these records, this pursuit of profit is wholly uncontrolled by anything for human dignity or compassion. To that end, he believes in making extensive cuts, including massive dismissals, to streamline operations. By sacking thousands of employees at once and closing factories and factories, he drastically changed the economic status of companies such as Scott Paper and Crown Zellerbach.
In 2005, Fast Company's business magazine including Dunlap in the article "Is Your Boss a Psychopath", noted he "may score impressive scores on the Corporate Psychopathy checklist." The magazine editor. John A. Byrne, noted: "Over the years I have reported, I have never encountered an executive as manipulative, cruel, and destructive as Al Dunlap, until the Securities and Exchange Commission forbade him to serve as a public official, the corporation, Dunlap sucked life and the soul of the company and the people He steals the dignity, purpose, and taste of the organization and replaces those ideals with fear and intimidation. "
In the book The Psychopath Test, the author, Jon Ronson, recounts an interview he did with Dunlap where he asked Dunlap if he felt that he fit the characteristics of a psychopath, even without using his label first â € " psychopath. "According to Ronson, Dunlap freely admits to having many psychopathic traits, but he considers them positive traits such as leadership and assertiveness.In the book review, Business Week reported that Dunlap" scored high enough on Hare Psychopathy Checklist. "Ronson, however, also notes that Dunlap has no other psychopathic elements, such as the history of juvenile delinquency or an unstable romantic relationship.
In May 2009, Conde Nast Portfolio.com named Dunlap became the 6th worst CEO of all time.
In popular culture
A documentary film was made about Dunlap in 1998 entitled Cutting to the Core - Albert J. Dunlap.
The documentary by the BBC about the UK business titans featuring Dunlap titled The Mayfair Set was released in 1999.
In 2001, he was a caricature in the Titans of Finance (Alternative Comic, 2001, ISBNÃ, 1-891867-05-9) by R. Walker and Josh Neufeld. This comic book is a collaboration between cartoonists and financial columnists, who threw Wall Street executives and merchants as heroes and criminals. This main story features Ronald O. Perelman, and Mike Vranos and Victor Niederhoffer are included.
In the 1997 episode Mystery Science Theater 3000 , the flagship movie Time Chasers depicts an evil boss who shot his employee with Uzi after grumbling: "You're fired." The characters of the show replied: "He's still a better boss than the Sunbeam."
On November 29, 2012, "Frank's Back in Business" episode of It's Always Sunny in Philadelphia series (season 8, episode 7) aired. Frank (Danny DeVito) was recalled by the board of directors of his old company to take over the role of CEO of "Warthog", who would ruthlessly reduce companies and dismiss individuals. DeVito wore a white French cuff and collar shirt that was identical to the clothes worn by Al Dunlap.
Publications
- Dunlap, Albert J.; Bob Andelman (1997). Means Business: How I Sow a Bad Company and Make a Good Company Great . New York: Fireside. ISBN 0-684-84406-0.
- Byrne, John A. (1999). Chainsaw: Famous Career of Al Dunlap in Profit-at-Any-Price Era . New York: HarperBusiness. ISBN: 0-06-661980-7.
- Byron, Christopher M. (2005). Testosteron Inc: Tales of CEOs Gone Wild . New York: John Wiley & amp; Children. ISBNÃ, 0-471-70623-X. Ã,
References
External links
- Highlights from Dunlap v Sunbeam (2000-2001)
- "Businessweek": How Al Dunlap Self Destructed
- "Chainsaw Al" Businessweek book quote by John A. Byrne
- Student Success Center Albert J. and Judith A. Dunlap at Florida State University
Source of the article : Wikipedia
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