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Dunlap's role as self-appointed messiah for shareholder value, meanwhile, is up for another casting call. Sunbeam shares were as high as $53 early this year and have fallen 79%--to $11.25, which is lower than the level at which the stock traded ($12.50) when Dunlap was hired. The collapse has crushed morale at Sunbeam, where workers who survived Dunlap's initial slashing and burning (he cut half the company's 12,000 jobs) were rewarded with a company-wide stock-option plan that for a painfully brief period was gratifying but now represents lost dreams. Said an employee on lunch break last week at Sunbeam headquarters in Delray Beach, Fla.: "I popped open a bottle of champagne when I heard the news [about Chainsaw]."
Dunlap appears to have given up on himself even before the board did. Members insist that firing Dunlap never crossed their minds until the man also known as "Rambo in pinstripes" raised the issue himself. At a fateful meeting on June 9, Dunlap said half a dozen times that he would go away quietly if the board were to buy him out of his contract. That was when the board lost confidence. "I was shocked," recalls board member Howard Kristol, a New York lawyer who represented Dunlap in his initial contract negotiation with Sunbeam. "We felt he had already left."
The board moved swiftly. Within days it discovered that business was much worse than Dunlap had let on just weeks before. What he had termed an aberration--the inventory glut--was in fact a continuing problem. Dunlap was fired June 13.
I tried repeatedly to get Dunlap or his lawyer on the phone but was unsuccessful. And I should note for the record that in the past I have written favorably of Dunlap, whose policy of fast and deep cost cutting at troubled companies, I believe, makes sense. Clearly, though, I was wrong about how far he could take Sunbeam.
It falls to another turnaround pro, Jerry Levin, 54, to pick up the pieces, and few expect fast answers. "The business is in lousy shape," says Andrew Shore, an analyst at Paine Webber. Shore, a Dunlap critic who recently baited Chainsaw Al by publicly asking him to work for $1 a year until the stock recovered, pegs any turnaround at two years.
By most accounts, Levin is the person for the job. He fixed cosmetics company Revlon in the early 1990s, and most recently was doing the same for outdoor-equipment company Coleman--both efforts on behalf of controlling shareholder Ronald Perelman. Levin's selection is no accident. On March 2, Perelman sold Coleman to Sunbeam in a stock swap, and he is now Sunbeam's second-largest investor, with a 13% stake. The largest is activist money manager Michael Price, who controls 17%. As a measure of how quickly Dunlap's career unraveled, Price only two weeks earlier had publicly, emphatically supported Dunlap. But he became as willing as anyone for the ax to fall.