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The Chainsaw cuts deep
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November 12, 1996: 9:02 p.m. ET
Dunlap revs up again at Sunbeam, cutting half the work force
From Correspondent Rhonda Schaffler
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NEW YORK (CNNfn) - Sunbeam Corp CEO Al Dunlap lived up to his nickname "Chainsaw Al" Tuesday when he announced the company will cut half its work force as part of a major restructiruing.
The appliance maker will cut 6,000 jobs, drop 87 percent of its product line, including clocks, thermometers, and scales, and cut its facilities from 53 to 14.
In addition, it will take a charge of $300 million to pay for one-time costs associated with the plan.
Appearing on CNN's Moneyline with Lou Dobbs, Dunlap also said he would sell some of the company's assets. (190K WAV) or (190K AIFF)
The bold executive adopted a "take no prisoners" attitude when he took over Sunbeam in July, and he promised to reverse the company's lackluster earnings.
Last month, the company announced a loss of $28.7 million in the third quarter as sales fell 2 percent to $245 million from the same period in 1995.
With this latest restructuring, Dunlap promised to double revenues to $2 billion by 1999 and increase Sunbeam's operating margin to 20 percent of sales.
Household Products Analyst Deepak Raj of Merrill Lynch believes Dunlap can make it happen. (123K WAV) or (123K AIFF)
Dunlap is known for doing what others believe can't be done. He made similar dramatic moves at Scott Paper Co., cutting costs and slashing 35 percent of the workforce.
But Consumer Products Analyst Lynn Hyman of CS First Boston said that, even for Dunlap, the Sunbeam solution is too ambitious and the job cuts too deep.
"It's hard for me to believe the company had that much fat." said Hyman.
Sunbeam's shares have doubled since Dunlap took over. Trading on its stock was halted for over an hour on Tuesday, and its shares fell 1/2, closing at 25-3/8.
Dunlap has promised to improve on that performance, but some analysts speculated that his next move may actually be to put the pared-down Sunbeam up for sale. 
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