`Chain Saw Al' gets axed from Sunbeam

MIAMI -- Sunbeam Chairman "Chain Saw Al" Dunlap now knows what it's like to be on the wrong end of the ax.

Sunbeam's board unanimously voted to remove Dunlap over the weekend after his pitiless cost-cutting failed to turn the company around. In recent months, the home appliance maker's stock sank and sales lagged.

Dunlap, who spent less than two years at Sunbeam, was replaced as chairman by board member Peter Langerman, who represents Sunbeam's largest shareholder, Franklin Mutual Advisers. "We lost confidence in his leadership and his earnings forecast," Langerman said. Jerry Levin, executive vice president of another large Sunbeam stockholder, MacAndrews & Forbes Holdings, was given Dunlap's position of chief executive. Dunlap's attorney did not immediately return a call for comment. The self-promoting Dunlap, 60, had promised to turn the Delray Beach-based company into a top performer. As recently as February, he was in good graces with the board, signing a three-year contract that prompted him to boast: "You can't overpay a great executive. Don't you think I'm a bargain?" The contract calls for him to get $2 million a year through January 2001 and benefits including a country club membership in the event of his dismissal. On Friday, Sunbeam stock fell to a one-year low of $18 -- compared with $50 a share when Dunlap signed his new contract -- after Barron's magazine reported that 1997 profits were based largely on accounting gimmicks. Dunlap denied the accusation. Also, Sunbeam lost $45 million in the first quarter on a 4 percent drop in sales after the ever-optimistic Dunlap predicted double- digit growth. He blamed a one-time blunder on holiday grill sales. Sunbeam said it also expects to post a second quarter operating loss and annual profits of only $1 a share for the year, much lower than Dunlap had indicated. "Let's face it, there were a lot of people who were excited to see Al go down in flames," said Nick Heymann, an analyst for Prudential Securities. "Once the credibility washed out, that was it." In November 1996, Dunlap announced plans to eliminate half of Sunbeam's 12,000 jobs and unload 87 percent of a 5,000-item product lineup. Dunlap's latest round of cost-cutting was announced last month with plans to drop 6,400 jobs as Sunbeam consolidated ownership of Coleman, Signature Brands and First Alert. Levin said the cuts are now being reviewed. Previously, Dunlap cut jobs and lines of business at Scott Paper. He did the same earlier at Lily-Tulip, a paper cup manufacturer, and Consolidated Press Holdings, an Australian TV and magazine empire.

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