{{Short description|American corporate executive (1937–2019)}} {{Use mdy dates|date=January 2019}} {{Infobox person | name = Albert J. Dunlap | birth_name = Albert John Dunlap | birth_date = {{birth date|1937|07|26}} | birth_place = Hoboken, New Jersey, U.S. | death_date = {{death date and age|2019|01|25|1937|07|26}} | other_names = Chainsaw Al (Nickname) | death_place = Ocala, Florida, U.S. | education = United States Military Academy (BS) | occupation = Corporate executive | module = {{Infobox military person | embed = yes | allegiance = {{flag|United States}} | branch = {{army|United States}} | rank = {{dodseal|USAO2-2015|25}} First lieutenant | unit = Air Defense Command | service_years = 1960–1963 }} | footnotes = {{center|<ref>{{cite news | last=Byrne | first=James | title=Chainsaw Al Dunlap Cuts His Last Deal | url=https://www.bloomberg.com/news/articles/2002-09-04/chainsaw-al-dunlap-cuts-his-last-deal | work=Bloomberg News | date=September 5, 2002 |url-access=subscription }}</ref>}} }}
'''Albert John Dunlap''' (July 26, 1937 – January 25, 2019) was an American corporate executive.<ref name=wpobit>{{cite news | title=Albert J. Dunlap, corporate turnaround specialist accused of accounting fraud, dies at 81 | url=https://www.washingtonpost.com/local/obituaries/albert-j-dunlap-corporate-turnaround-specialist-accused-of-accounting-fraud-dies-at-81/2019/01/28/652d3a34-230f-11e9-90cd-dedb0c92dc17_story.html | last=Smith | first=Harrison | newspaper=The Washington Post | date=January 28, 2019}}</ref><ref name=prominentfsu>{{cite news | title=Prominent FSU supporter Al Dunlap dies at 81 | url=https://eu.tallahassee.com/story/sports/2019/01/26/prominent-fsu-supporter-al-dunlap-passes-away/2688270002/ | work=Tallahassee Democrat | date=January 26, 2019}}</ref> He was known at the peak of his career as a professional turnaround management specialist and downsizer. The mass layoffs at his companies earned him the nicknames "Chainsaw Al"<ref>{{cite book |last1=Webber |first1=David H. |author-link=David H. Webber |title=The Rise of the Working-Class Shareholder: Labor's Last Best Weapon |date=April 2018 |publisher=Harvard University Press |isbn=978-0-674-91946-4 |page=6 |url=https://www.degruyter.com/viewbooktoc/product/511375 |access-date=15 November 2019 |url-access=subscription}}</ref> and "Rambo in Pinstripes", after he posed for a photo wearing an ammo belt across his chest.<ref>{{cite news | url=https://money.cnn.com/magazines/fortune/fortune_archive/1998/01/12/236425/index.htm | archive-url=https://web.archive.org/web/20090407002322/http://money.cnn.com/magazines/fortune/fortune_archive/1998/01/12/236425/index.htm | url-status=dead | archive-date=April 7, 2009 | title=Can Chainsaw Al Really Be A Builder? America's most ferocious cost cutter says he wants to make Sunbeam bigger. With help from Sam Walton's daughter, he's looking at a major acquisition. | first=Patricia | last=Sellers | work=Fortune | publisher=CNN | date=January 12, 1998}}</ref> It was later discovered that his reputed turnarounds were elaborate frauds and his career was ended after he engineered a massive accounting scandal at Sunbeam Products, now a division of Newell Brands, that forced the company into bankruptcy.<ref>{{cite news | last=Hagerty | first=James R. | title=Albert J. Dunlap, Cost-Slashing Sunbeam CEO Known as 'Chainsaw Al,' Dies at Age 81 | url=https://www.wsj.com/articles/albert-j-dunlap-cost-slashing-sunbeam-ceo-known-as-chainsaw-al-dies-at-age-81-11548611699?mod=hp_featst_pos2 | work=The Wall Street Journal | date=January 27, 2019 |url-access=subscription }}</ref> Dunlap is on the lists of "Worst CEOs of All Time" published by several business publications.<ref>{{cite news | url=https://www.cnbc.com/2009/04/30/Portfolios-Worst-American-CEOs-of-All-Time.html?slide=16 | title=Portfolio's Worst American CEOs of All Time | publisher=CNBC | date=April 30, 2009}}</ref><ref>{{cite news | url=https://www.businessinsider.com/worstceosever/al-dunlap/ | title=Worst CEOs Ever: Al Dunlap | work=Business Insider}}</ref> ''Fast Company'' noted that Dunlap "might score impressively on the Corporate Psychopathy checklist"<ref>{{cite web | url=http://www.fastcompany.com/magazine/96/open_boss.html?page=0%2C2 | title=Is Your Boss a Psychopath | last=Deutschmann | first=Alan | work=Fast Company | date=July 1, 2005}}</ref><ref>{{cite news | first=John A. | last=Byrne | url=http://www.fastcompany.com/53295/working-boss-hell | title=WORKING FOR THE BOSS FROM HELL | work=Fast Company | date=July 1, 2005}}</ref> and in an interview, Dunlap freely admitted to possessing many of the traits of a psychopath, but considered them positive traits such as leadership and decisiveness.<ref>{{cite book | first=Jon | last=Ronson | url=https://books.google.com/books?id=XkHZCwAAQBAJ | title=The Psychopath Test: A Journey Through the Madness Industry | publisher=Picador | date=2012| isbn=9781594485756 }}</ref><ref>{{Cite web|date=7 May 2013|title=Strange answers to the psychopath test - Jon Ronson|url=https://www.youtube.com/watch?v=TLPQ765VS6E |archive-url=https://ghostarchive.org/varchive/youtube/20211221/TLPQ765VS6E |archive-date=2021-12-21 |url-status=live|access-date=1 November 2020|website=YouTube|publisher=TED-Ed}}{{cbignore}}</ref> He was a major benefactor of Florida State University.<ref name=wsjobit>{{cite news | last=Hagerty | first=James R. | title=Albert J. Dunlap, Cost-Slashing Sunbeam CEO Known as 'Chainsaw Al,' Dies at Age 81 | url=https://www.wsj.com/articles/albert-j-dunlap-cost-slashing-sunbeam-ceo-known-as-chainsaw-al-dies-at-age-81-11548611699 | work=The Wall Street Journal | date=January 27, 2019 |url-access=subscription }}</ref>
==Early life and education== Dunlap was born in Hoboken, New Jersey in 1937.<ref name=wpobit/> He entered West Point in 1956<ref name=Sider>{{cite news | url=https://people.com/archive/the-terminator-vol-46-no-22/ | title=The Terminator | first=Don | last=Sider | work=People.com | date=November 25, 1996}}</ref> and graduated with a degree in engineering in 1960.<ref name=wpobit/> He then served in the United States Army for three years, qualifying as a paratrooper and being posted at a nuclear missile site.<ref>{{cite web |title=''The Wall Street Transcript bio page on Dunlap'' | url=https://www.twst.com/bio/albert-j-dunlap/}}</ref>
==Early career== In 1963, Dunlap entered the business world at Kimberly-Clark as part of its manufacturing operations.<ref name=wpobit/> He worked there for four years before being taken on at Sterling Pulp & Paper, where he was put in charge of the family-run business.<ref name=Sider/>
He engineered a massive accounting fraud at Nitec, a paper-mill company in Niagara Falls, New York. He was the company's president from 1974 to 1976, when he was fired owing to his abrasive management style. An audit by Arthur Young (now part of Ernst & Young) revealed numerous irregularities, including inflated inventory and non-existent sales — a situation similar to his later activities at Sunbeam. The final result was that Nitec's $5 million profit for 1976 was actually a $5.5 million loss. Nitec sued Dunlap for fraud but was ultimately forced out of business. Dunlap never mentioned Nitec on his resume, and the scandal was not widely known until reported by ''The New York Times'' after the revelation of his dishonesty at Sunbeam.<ref>{{cite news | url=https://www.nytimes.com/2001/07/16/business/incomplete-resume-special-report-executive-s-missing-years-papering-over-past.html | title=The Incomplete Resume | first=Floyd | last=Norris | author-link=Floyd Norris | work=The New York Times | date=July 16, 2001 |url-access=subscription }}</ref> Dunlap maintained his innocence even after a Nitec vice president testified under oath that Dunlap had personally ordered him to report the misleading figures.<ref name=wpobit/>
Lily Tulip Cup hired him as the president and CEO in 1983. In 1985, he was given the additional title of chairman of the company.<ref>{{cite news | last1=Gilpin | first1=Kenneth N. | last2=Purdum | first2=Todd S. |title=Lily-Tulip President Adds Chairman's Title | url=https://www.nytimes.com/1985/03/06/business/business-people-lily-tulip-president-adds-chairman-s-title.html | work=The New York Times | date=March 6, 1985 |url-access=subscription }}</ref>
From 1991 to 1993, he was CEO of the Australian firm Consolidated Press Holdings (CPH), a private company belonging to the Packer family, after Kerry Packer took a leave of absence for health reasons. At the time, CPH had a diverse portfolio in media and publishing, as well as chemical and agricultural operations. During his three years at the company, Dunlap mentored James Packer.<ref>'The Price of Fortune: The untold story of being James Packer'. Damon Kitney. Harper Collins 2018</ref>
In 1994, Dunlap became the CEO of Scott Paper after Philip E. Lippincott stepped down from the position.<ref>{{cite news | title=Former Scott Paper Chief Named To Top Position at Sunbeam | url=https://www.nytimes.com/1996/07/19/business/former-scott-paper-chief-named-to-top-position-at-sunbeam.html | work=The New York Times | date=July 19, 1996 |url-access=subscription }}</ref> In 1995, he sold Scott Paper to Kimberly-Clark for $9 billion, making $100 million from the deal via stock options and the appreciation of his holdings.<ref name=willjustice>{{cite news | url=https://www.nytimes.com/2002/09/06/business/will-justice-department-go-after-dunlap.html | title=Will Justice Department Go After Dunlap? | first=Floyd | last=Norris | author-link=Floyd Norris | work=The New York Times | date=September 6, 2002 |url-access=subscription }}</ref><ref>{{cite news | url=https://www.sun-sentinel.com/news/fl-xpm-1996-01-14-9601120655-story.html | title=DUNLAP: I SAVED SCOTT PAPER | first=Marcia H. | last=Pounds | work=Sun-Sentinel | date=January 14, 1996}}</ref>
==Sunbeam== Dunlap took over as chairman and CEO of Sunbeam in 1996.<ref name=wsjobit/> His methods resulted in Sunbeam's reporting record earnings of $189 million in 1997.<ref name="SECComplaint">[https://www.sec.gov/litigation/litreleases/lr17001.htm SEC complaint against Dunlap]</ref>
However, he was unable to find a buyer by the end of the year. On March 3, 1998, Sunbeam announced the acquisitions of camping gear maker Coleman Company, coffee machine maker Signature Brands (best known for making Mr. Coffee), and smoke detector maker First Alert. Sunbeam's stock rose 9% on the news; within two days, it jumped to an all-time high of $52 per share.<ref name=daniels>[http://danielsethics.mgt.unm.edu/pdf/Sunbeam%20Case.pdf Sunbeam Corporation: “Chainsaw Al,” Greed, and Recovery] {{webarchive|url=https://web.archive.org/web/20131127004533/http://danielsethics.mgt.unm.edu/pdf/Sunbeam%20Case.pdf |date=2013-11-27 }}, ''Daniels Fund Ethics Initiative''</ref><ref>{{cite news | url=https://www.latimes.com/archives/la-xpm-1998-mar-03-fi-24777-story.html | title=Sunbeam Plans to Buy 3 Firms for $2.5 Billion | first=THOMAS S. | last=MULLIGAN | work=Los Angeles Times | date=March 3, 1998}}</ref>
Industry insiders became suspicious when they discovered certain seasonal items were being sold at higher volume than normal for the time of year. For instance, large numbers of barbecue grills were being sold during the fourth quarter. It turned out that Dunlap had been selling products to retailers at large discounts. The products were stored in third-party warehouses to be delivered later. That strategy, known as "bill and hold", is an accepted accounting practice, as long as the sales are booked after delivery. However, Dunlap booked the sales immediately. Many shareholders felt they had been tricked into buying stock that was worth far less than it actually was, and they filed a class action lawsuit against Dunlap and Sunbeam.<ref name=daniels/> When an analyst questioned Dunlap about the matter in May 1998, Dunlap reportedly grabbed him by the shoulder and said, "You son of a bitch. If you want to come after me, I'll come after you twice as hard."<ref name=wpobit/>
In the second quarter of 1998, the Sunbeam board of directors investigated aggressive accounting practices and extreme discounting, carried out at the direction of Dunlap. It turned out that Dunlap had sold retailers far more merchandise than they could handle. With the stores hopelessly overstocked, unsold inventory piled up in Sunbeam's warehouses. As a result, Sunbeam faced losses of as much as $60 million in the second quarter of 1998. Dunlap's search for a buyer for Sunbeam in 1997 was timed so that the huge inventory-related losses would come to light after the sale had closed. The company's comptroller also told the board that Dunlap had told him to push the limits of accounting principles.<ref name=daniels/> On June 13, 1998, Dunlap was fired. According to Charles Elson, one of several directors appointed by Dunlap, the board was angered when Dunlap tried to explain the lackluster financials by claiming 1998 was a "transition year." Elson moved to terminate Dunlap, a motion that carried unanimously. According to a Sunbeam executive close to the board, the directors felt that Dunlap had deceived them about Sunbeam's numbers and intended to withhold his $35 million golden parachute.<ref>{{cite news | url=https://www.nytimes.com/1998/06/16/business/sunbeam-s-board-in-revolt-ousts-job-cutting-chairman.html | title=Sunbeam's Board, in Revolt, Ousts Job-Cutting Chairman | first=Dana | last=Canedy | author-link=Dana Canedy | work=The New York Times | date=June 16, 1998}}</ref> As the fraud was further uncovered in late 1998, Sunbeam was forced a number of times to restate financial results dating back to 1996.<ref>{{cite news | url=https://money.cnn.com/1998/08/06/companies/sunbeam/ | archive-url=https://web.archive.org/web/20011220165120/http://money.cnn.com/1998/08/06/companies/sunbeam/ | url-status=dead | archive-date=December 20, 2001 | title=Sunbeam to restate results | work=CNN | date=August 6, 1998}}</ref><ref>{{cite news | url=https://money.cnn.com/1998/11/12/companies/sunbeam/ | archive-url=https://web.archive.org/web/20020220121907/http://money.cnn.com/1998/11/12/companies/sunbeam/ | url-status=dead | archive-date=February 20, 2002 | title=Sunbeam restates results | work=CNN | date=November 12, 1998}}</ref><ref>{{cite news | url=https://www.nytimes.com/1998/10/21/business/sunbeam-restates-results-and-fix-shows-significant-warts.html | title=Sunbeam Restates Results, and 'Fix' Shows Significant Warts | first=Dana | last=Canedy | author-link=Dana Canedy | work=The New York Times | date=October 21, 1998}}</ref>
In 2001, the U.S. Securities and Exchange Commission sued Dunlap, alleging that he had engineered a massive accounting fraud. Also named in the suit were four other former Sunbeam executives and Phillip E. Harlow, the lead partner for Sunbeam's account with Arthur Andersen.<ref>{{cite press release | title=SEC Sues Former CEO, CFO, Other Top Former Officers of Sunbeam Corporation in Massive Financial Fraud | url=https://www.sec.gov/news/headlines/sunbeamfraud.htm | publisher=U.S. Securities and Exchange Commission | date=May 15, 2001}}</ref> An SEC investigation revealed that Dunlap and others had created the impression of a greater loss in 1996 in order to make it look like the company had experienced a dramatic turnaround in 1997. By the SEC's estimate, at least $60 million of Sunbeam's 1997 earnings were fraudulent. He also offered incentives for retailers to sell products that would have otherwise been sold later in the year, a practice known as "channel stuffing", and used illegal bill and hold practices. The SEC also argued that the purchases of Coleman, Signature, and First Alert were made to conceal Sunbeam's growing problems. Sunbeam never recovered from the scandal and was forced into bankruptcy in 2002.<ref name="SECComplaint"/> The shareholder lawsuit against Dunlap dragged on until 2002, when he agreed to pay $15 million to settle the allegations.<ref>{{cite news | url=http://www.niagarafallsreporter.com/gallagher50.html | title=Once a Bum, Always a Bum | last=Gallagher | first=Bill | work=Niagara Falls Reporter}}</ref>
Dunlap was also suspected of irregularities at Scott Paper. Not long after the shareholder settlement, he reached a settlement with the SEC. Although he did not admit or deny wrongdoing, he agreed to pay a $500,000 fine and accepted a lifetime ban from serving as an officer or director of a public company.<ref name=willjustice/><ref>{{cite news | url=https://www.chicagotribune.com/news/ct-xpm-2002-09-05-0209050164-story.html | title=Dunlap barred, must pay $500,000 | first=Andrew | last=Countryman | work=Chicago Tribune | date=September 5, 2002}}</ref> The United States Department of Justice investigated Sunbeam's management during Dunlap's tenure but ultimately did not file any charges.<ref>{{cite news | last=Norris | first=Floyd | author-link=Floyd Norris | url=https://www.nytimes.com/2005/05/20/business/20norris.html | title=At Sunbeam, Big Guys Won, Public Lost | work=The New York Times | date=May 20, 2005 |url-access=subscription }}.</ref>
==Death== Dunlap died at his home in Ocala, Florida, on January 25, 2019, following a short illness. His death was announced by Florida State University.
He is survived by his wife Judy Dunlap and son Troy Dunlap.<ref name="prominentfsu" />
==In popular culture== A documentary film was made about Dunlap in 1998 called ''Cutting to the Core—Albert J. Dunlap''.<ref>{{cite web |title=Cutting to the core[videorecording] :Albert J. Dunlap /Hedrick Smith Productions. | url=http://www.nlb.gov.sg/biblio/12216212 | website=National Library Board – Singapore | date=1998}}</ref>
A 1999 BBC documentary film called ''The Mayfair Set'', about business titans in Britain, prominently featured Dunlap.<ref>{{cite web | title=The Mayfair Set, Episode 3 – Destroy the Technostructure (1999) by Adam Curtis | url=https://www.youtube.com/watch?v=BwkbA9NJy9g | website=YouTube | date=1999}}{{cbignore}}{{Dead YouTube link|date=February 2022}}</ref>
In 2001, he was caricatured in ''Titans of Finance'' (Alternative Comics, 2001, {{ISBN|1-891867-05-9}})<ref>{{cite book | title=Titans of Finance: True Tales of Money & Business | year=2007|isbn = 978-1891867057|last1 = Walker|first1 = Rob|last2 = Neufeld|first2 = Josh| publisher=Alternative Comics}}</ref> by Rob Walker and Josh Neufeld. The comic book is a collaboration between a cartoonist and a finance columnist, which casts Wall Street executives and traders as heroes and villains. The lead story features Ronald O. Perelman, and Mike Vranos and Victor Niederhoffer are among those included.<ref>{{cite news | url=https://www.nytimes.com/2001/06/03/business/private-sector-dumbed-down-on-wall-st-junk-finance-with-pictures.html | title=Private Sector; Dumbed Down on Wall St.: Junk Finance, With Pictures | last=McGeehan | first=Patrick | work=The New York Times | date=June 3, 2001 |url-access=subscription }}</ref>
He was interviewed by Jon Ronson for his 2011 book ''The Psychopath Test''. Ronson gave Dunlap the Hare psychopathy test and noted that Dunlap possessed a number of traits common to psychopaths.<ref>{{cite news | url=https://www.npr.org/2011/05/21/136462824/a-psychopath-walks-into-a-room-can-you-tell | title=A Psychopath Walks Into A Room. Can You Tell? | work=NPR | date=May 21, 2011 }}</ref>
In 2002, a documentary film by the U.S. television program ''Frontline'' was released named ''Bigger than Enron''. It detailed the events that occurred at Sunbeam when Dunlap was CEO and investigated the accounting practices that were implemented.<ref>{{cite web |title=Introduction: Bigger Than Enron | url=https://www.pbs.org/wgbh/pages/frontline/shows/regulation/etc/synopsis.html | website=PBS | publisher=Frontline | date=June 20, 2002}}</ref>
==References== {{Reflist}}
==Further reading== By Dunlap: * {{cite book | last=Dunlap | first=Albert J. | author2=Bob Andelman | title=Mean Business: How I Save Bad Companies and Make Good Companies Great | publisher=Fireside | location=New York | year=1997 | isbn=0-684-84406-0 | url-access=registration | url=https://archive.org/details/meanbusinesshowi00dunl }}
About Dunlap: * {{cite book | last=Byrne | first=John A. | title=Chainsaw: The Notorious Career of Al Dunlap in the Era of Profit-at-Any-Price | publisher=HarperBusiness | location=New York | year=1999 | isbn=0-06-661980-7 | url-access=registration | url=https://archive.org/details/chainsawnotoriou00byrn_0 }} * {{cite book | last=Byron | first=Christopher M. | title=Testosterone Inc.: Tales of CEOs Gone Wild | publisher=John Wiley & Sons | location=New York | year=2005 | isbn=0-471-70623-X}} * {{cite court |litigants=Dunlap v. Sunbeam Corporation |vol= |reporter= |court=Court of Chancery of Delaware, New Castle County |date=June 23, 1999 |url=https://casetext.com/case/dunlap-v-sunbeam-corporation |archive-url=https://web.archive.org/web/20230307015652/https://casetext.com/case/dunlap-v-sunbeam-corporation |url-status=dead |archive-date=March 7, 2023 }}
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{{DEFAULTSORT:Dunlap, Albert J.}} Category:1937 births Category:2019 deaths Category:Businesspeople from Hudson County, New Jersey Category:Corporate scandals Category:Military personnel from Hudson County, New Jersey Category:People from Hoboken, New Jersey Category:United States Military Academy alumni Category:United States Army officers Category:20th-century American businesspeople