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Running with the Bulls

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Al Dunlap Interview, Part III

SMITH: Let me go back to -- to Scott Paper. -- um -- a couple of your fans, a couple of your strongest believers, and a couple of folks who -- who have clearly made money off betting on -- on Al Dunlap -- Linda Lieberman and Nell Minnow -- each of them independently told us that they felt that Scott Paper could have been saved without taking as drastic steps as you took. What’s your response to that?

DUNLAP: Well, I have -- I have great respect for both of those people. But, you know, three of the four years before I arrived at Scott, they restructured, three out of four years. And they never got it right. When I went into Scott, and when I go into any corporation, I don’t believe in restructuring year after year after year. I think that -- that totally destroys a corporation. In the first twelve months, I do everything that ought to be done, and then we concentrate on the growth of the company. And I think what I did at Scott clearly was the right thing to do. What was the result? The result was -- here was a company that had a market capitalization of two-point-nine billion dollars. Eighteen months later, it had a market capitalization of nine and a half billion dollars. We created six and a half billion dollars of new worth. And we merged it with Kimberly Clark, creating the second largest consumer products company in America and a real powerhouse. That is an enormous achievement.

NARRATOR: ONE YEAR INTO HIS RESTRUCTURING AT SUNBEAM, DUNLAP HAD ALREADY GENERATED SIGNIFICANT CHANGES.

DUNLAP: We’ve gone from twenty-six factories to eight. We’ve sold all the businesses that don’t make sense. We’ve cut two hundred twenty-five million of cost. We’ve put a great management team. We’re globalizing the business, coming out with thirty new products this year domestically -- unheard of in this industry -- forty-two new products internationally. And, so, we’re growing. We’re now starting to throw off great sums of cash. The natural sequence of events would be to make a major acquisition or merger, to create even more value and to further build the corporation.

SMITH: If you get in an acquisition here at Sunbeam, it will break a pattern for you. I mean, as you point out in your book, -- uh -- you know, one after another of the companies you’ve gone into, you’ve been in for awhile, a year, fifteen months, eighteen months, twenty months, something like that -- Scott Paper, twenty months. And the company is involved in a merger. Sell out, and you’re on your way. Are you about to change your pattern?

DUNLAP: Well, I think one thing -- there are really three types of executives. There are people like myself who go into the most troubled of situations and rescue the company. There’s the Jack Welch type of executive who, year in and year out, runs a very good corporation. There’s the Bill Gates type of executive who founds a technology and creates a corporation. They’re all very different people. But, if we were to do an acquisition, we would do an acquisition of a company that had some synergism to us, had good products but really needed to be rescued itself. So I would be creating my tenth rescue mission as part of Sunbeam.

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Part IV

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