Sunbeam Corp. was once a mainstay of Chicago industry, as venerable as Sears Roebuck. Founded as Chicago Flexible Shaft in the 1890s as a maker of sheep shearers and horse trimming, Sunbeam invaded the mid-century household with its flagship Mixmaster blender and other products that included toasters, irons and electric shavers.
A tool that Sunbeam didn't make — a chainsaw — came to be associated with its demise.
"Chainsaw Al" was the nickname of Albert Dunlap, the CEO known for his cutthroat tactics who dismantled the company. He died at age 81 on Jan. 25 in Ocala, Fla., according to reports.
Sunbeam closed its Chicago headquarters, which had once employed 4,000, in 1982 and later moved them to Milwaukee in a merger with another unit of Allegheny International. But Schaumburg remained the base of it housewares division, which accounted for more than half its revenue.
That is, until Dunlap arrived in 1996, the same year he published, "Mean Business: How I Save Bad Companies and Make Good Companies Great," which recounted his slashing at Scott Paper and elsewhere.
On his second day at Sunbeam, he axed Chief Operating Officer James Clegg, who headed the Schaumburg office. Later that year, Dunlap trumpeted plans to halve the 12,000-person workforce, shutter or sell 18 of 26 factories and jettison many of its products.
"Chainsaw Al is sort of a pussycat name for you. If you pull this off, you should be called Nuclear Al," an analyst told Dunlap in a conference call. "This has been planned like the invasion in Normandy," Dunlap replied.
Except there was no V-E Day for Sunbeam. Dunlap proved to be a cost-cutter without a method for increasing revenue. He was fired in 1998, and Sunbeam, by then headquartered in Fort Lauderdale, Fla., filed for bankruptcy protection in 2001.
The Sunbeam name and some of its other brands, such as Mr. Coffee, eventually made their way to Jarden Consumer Solutions, which is now part of Newell Brands Inc.
In 2001, Dunlap and four other Sunbeam executives were sued by the Securities & Exchange Commission, which alleged they cooked Sunbeam's books to falsely portray the extent of a turnaround in 1997. Sunbeam's stock plunged after the scheme was exposed, costing investors billions of dollars.
Sunbeam's board launched an investigation in June 1998, which led to Dunlap's resignation. He later settled a shareholder lawsuit for $15 million and the SEC action for $500,000, agreeing never to serve as a public company officer or director.
"He had a quick-trigger temper and was a no-nonsense guy who wouldn't hesitate to close down conference calls with analysts when he didn't like the tenor of questions," said H. Lee Murphy, a Crain's Chicago Business correspondent who interviewed Dunlap several times. "Execs working with him were in mortal fear."
During his tenure at Sunbeam, Dunlap hired Chicago investment banker Bill Strong to advise on acquisitions, including the ill-fated 1998 purchase of camping equipment maker Coleman. Four days after the transaction, Sunbeam's stock tanked, and seller Ronald Perelman sued Strong's firm, Morgan Stanley, accusing it of misleading him about the value of Sunbeam.
Perelman won a $1.5 billion verdict that was later overturned on appeal.
In 2005, when John Byrne edited business magazine Fast Company, he said of Dunlap: "In all my years of reporting, I had never come across an executive as manipulative, ruthless and destructive as Al Dunlap. Until the Securities & Exchange Commission barred him from ever serving as an officer of a public corporation, Dunlap sucked the very life and soul out of companies and people. He stole dignity, purpose and sense out of organizations and replaced those ideals with fear and intimidation." Byrne later wrote a book, "Chainsaw: The Notorious Career of Al Dunlap in the Era of Profit-At-Any-Price."