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Kellogg Chief Chosen to Lead Commerce

Times Staff Writer

President Bush on Monday nominated Cuban-born Carlos M. Gutierrez, who rose from driving a truck for Kellogg Co. to become the breakfast giant’s chairman, to be the next Commerce secretary.

It was Bush’s first appointment in what probably would be a wholesale revamping of his economic team, signaling a fresh start as the president prepared to launch two politically challenging initiatives: a restructuring of Social Security and an effort to change the tax code.

For the record:
12:00 AM, Dec. 03, 2004 For The Record
Los Angeles Times Friday December 03, 2004 Home Edition Main News Part A Page 2 National Desk 2 inches; 85 words Type of Material: Correction
Commerce nominee -- An article in Tuesday’s Section A said Carlos M. Gutierrez, President Bush’s choice to be the next Commerce secretary, had been described by Latino Leaders magazine as the only Latino chief executive of a Fortune 500 company. In addition to Gutierrez, who is chairman and chief executive of Kellogg Co., at least one other Fortune 500 company is led by a Latino. The chairman and chief executive of Advanced Micro Devices, a semiconductor maker in Sunnyvale, Calif., is Hector de J. Ruiz.

If confirmed by the Senate, Gutierrez, 51, would succeed Don Evans, a Texas oilman and longtime Bush friend whose resignation as Commerce secretary was announced earlier this month.

Bush’s economic team has been less visible than his national security team, but it is expected to gain importance as the White House attempts to build support for changes to Social Security and the tax code. The president is expected to replace a number of people in the team that will help him formulate his policy proposals and promote them in Congress.

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Bush wants to allow workers to put some of their Social Security taxes into private accounts, but he has not laid out any details, such as how to cover the resulting shortfall to pay benefits to current retirees and to people close to retirement. Bush has said he will push to simplify the tax code, but he has not committed himself to any specific changes.

In addition to Evans, Stephen Friedman, director of the White House National Economic Council, has announced his resignation. N. Gregory Mankiw, chairman of Bush’s Council of Economic Advisors, is expected to leave soon.

The most visible economic aide, Treasury Secretary John W. Snow, also may leave. White House press secretary Scott McClellan, however, declined Monday to address Snow’s future, dismissing such talk as a “Washington, D.C., speculation game.”

With Gutierrez’s nomination, Bush has named three minorities to fill six major vacancies. The others are national security advisor Condoleezza Rice, who is in line to succeed Secretary of State Colin L. Powell -- both of whom are black -- and White House Counsel Alberto R. Gonzales, who would succeed Atty. Gen. John Ashcroft.

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The president also has nominated Margaret Spellings, his domestic policy advisor, to succeed Education Secretary Rod Paige; and Deputy Chief of Staff Harriet Miers to succeed Gonzales.

McClellan told reporters that Bush intended to continue presiding over a diverse Cabinet and White House staff, saying that he was “proud of the diversity within his team.”

Until the appointment of Gutierrez, Bush had selected White House insiders for top Cabinet posts. Analysts said that when it came to building his economic team, Bush probably would pick people best able to promote his ambitious but controversial economic agenda.

“There is a perception that the economy was not a strong point for the president, whether it was policy or salesmanship,” said Stuart Rothenberg, a Washington-based political analyst. Referring to jobs lost during Bush’s first term, Rothenberg said: “Maybe a new team, which would help him sell fundamental tax reform and Social Security reform, can start fresh -- without the baggage of those job losses.”

Stephen Moore, head of the conservative Club for Growth, agreed. “If you’re going to try to enact a bold agenda, you’re going to need a kind of all-star lineup of spokesmen and aides -- people who are articulate, telegenic and have the kind of gravitas that can go on television every night and make the case for these very dramatic changes that Bush wants to bring about,” he said.

Gutierrez is the only Latino chief executive of a Fortune 500 company, according to Latino Leaders magazine.

In announcing the appointment, Bush called him “an effective, visionary executive” who was “one of America’s most respected business leaders.”

Gutierrez was 6 when he and his family became refugees as Fidel Castro’s forces took control of Cuba. His parents owned a pineapple export business in Havana, which was confiscated by the Castro regime.

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“He learned English from a bellhop at a Miami hotel,” Bush said in announcing the nomination.

After job opportunities took the family to Mexico, Gutierrez in 1975 took a job selling Frosted Flakes out of a van in Mexico City. He quickly rose up the ladder of Battle Creek, Mich.-based Kellogg, serving in Canada, the United States and Australia.

Gutierrez became the company’s chief executive in April 1999 and its chairman a year later. At the time, the company that created Tony the Tiger and Pop-Tarts found itself buffeted by changing consumer tastes. Gutierrez devised a three-year plan that was widely credited by analysts with turning Kellogg around, although more than 500 workers were laid off.

In addition to responding to Americans’ on-the-go breakfast habits, Gutierrez introduced hard-crusted Nutri-Grain bars in Mexico for sale in bodega stands and small-sized Rice Krispy treats in Malaysia, which were popular because they cost much less than the big bars Kellogg sold elsewhere. He also introduced breakfast-on-the-run to the British market.

During Gutierrez’s tenure, Kellogg’s net sales rose from $6.2 billion a year to $8.8 billion last year.

Known as a natty dresser who bought fitted suits from a personal tailor, Gutierrez told reporters that he would go virtually every weekend to supermarkets to check on Kellogg displays and to talk to shoppers about their likes and dislikes.

“The important thing is that we have a dialogue about what’s really happening in the marketplace, and not a dialogue about reports.... In our corporate offices, we talk about reports, we talk about paper, we read reports, we push them around, we write notes on paper,” he told Forbes magazine several years ago. “But how many discussions do we have about what’s happening in the stores, what are our customers saying, what are they thinking, what’s their point of view? That’s what’s important.”

He also is known for staying in touch with popular culture. A regular reader of People magazine, Gutierrez has attended Matchbox 20 concerts with his teenage children. He and his wife, Edilia, have three children.

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After Bush introduced him during a brief appearance at the White House on Monday, Gutierrez said: “We never imagined that this country would give me this great opportunity.”

The president called Gutierrez “a great American success story,” recalling that the immigrant was running Kellogg in Mexico only a decade after he had started as a salesman. “And 15 years after that, he was running the entire company,” Bush said.

According to a Kellogg proxy statement, Gutierrez last year received more than $7 million in total compensation and owns or has option rights to 2 million shares of company stock.

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(BEGIN TEXT OF INFOBOX)

Carlos M. Gutierrez

Age: 51. Born Nov. 4, 1953, in Havana.

Education: Studied business administration at the Monterrey Institute of Technology in Queretaro, Mexico.

Experience: Kellogg Co.: chairman (2000-04); chief executive (1999-2004); president (1998-2000); chief operating officer (1998-99); other positions (1990-98); president and chief executive, Kellogg Canada (1989-90); general manager, Kellogg de Mexico (1984-89); manager, international marketing services (1983-84); supervisor, Latin American marketing services (1982-83); sales representative, various sales and marketing positions, Kellogg de Mexico (1975-82).

Family: Wife, Edilia; two daughters, one son.

Source: Associated Press

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Times staff writer Terril Yue Jones contributed to this report.


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