Bush Picks Kellogg CEO for Commerce Post

By: Associated Press
By: Associated Press

President Bush on Monday chose Carlos Gutierrez, a native of Cuba who rose from truck driver to chief executive officer of Kellogg Co., to be secretary of Commerce.

If confirmed by the Senate, Gutierrez would succeed Commerce Secretary Donald Evans, a Texas confidant of Bush's, who announced his resignation shortly after the Nov. 2 election. The president called the 51-year-old Gutierrez, 51, a "great American success story" and a visionary executive, who understands the world of business from the "first rung on the ladder to the very top."

"Carlos's family came to America from Cuba when he was a boy," Bush said in the Roosevelt Room. "He learned English from a bellhop in a Miami hotel and later became an American citizen. When his family eventually settled in Mexico City, Carlos took his first job for Kellogg as a truck driver, delivering Frosted Flakes to local stores."

Gutierrez, who was joined by his wife, son and two daughters, is the first new member of Bush's economics team for his second term. Bush's chief economics adviser, Stephen Friedman, announced last week that he is leaving. Other changes also are anticipated, although Treasury Secretary John Snow would like to stay.

"The secretary views his service to the president as an honor and a privilege," Rob Nichols, a Treasury Department spokesman, said of Snow. "Like all his Cabinet colleagues, he serves at the pleasure of the president."

Looking ahead to his second term, Bush is already making changes to his current economics team. And, private economists say it is possible that could include a change at the Treasury post. In early February, Snow, 65, a former chief at railroad giant CSX, replaced Paul O'Neill, who was fired by Bush as part of a shake-up of the president's economic team.

The White House said Bush appreciates the job Snow is doing but refused to say he would remain in his job. "I'm not going to get into talking about individual members of the Cabinet," White House press secretary Scott McClellan said.

Gutierrez, whose family fled Cuba in 1960 when he was 6, joined Kellogg in 1975. Known for having a strong work ethic and a seemingly endless stream of ideas, he worked all over the world for the company before being promoted to president and chief operating officer in June 1998.

"I believe passionately in your leadership and direction you've set," Gutierrez told Bush. "I believe in your call for a vibrant, growing, entrepreneurial society where everyone has the opportunity to experience the joy and the pride of ownership, where everyone can contribute and where everyone can benefit. I have had the opportunity to live that American dream, so I know that the president's vision is noble, I know it's real and I know it's tangible."

Gutierrez, Kellogg's CEO since April 1999, is credited with shaping a major corporate and marketing overhaul at Kellogg, narrowing the company's primary focus to cereal and wholesome snacks and reducing the company's debt. Under Gutierrez, Kellogg's net sales rose from $6.2 billion in 1999 to $8.8 billion last year, a 43 percent increase. Earnings per share increased 131 percent, from 83 cents to $1.92, and cash flow went up 82 percent, from $529 million to $961 million.

He is known as a charismatic and approachable executive, widely admired in business circles for reviving a flagging company.

"Carlos is a superb choice to head this important department and join the president's economic team," said John Dillon, a member of the board of directors of Kellogg Co. and former chairman and CEO of International Paper Co. "He has deftly managed the Kellogg Company through both strong and weak economic currents. He understands the need for sustained economic growth and will be an articulate spokesperson and a strong member of the president's team."

Last year, Gutierrez received about $7.4 million in total compensation, including salary, bonus and incentive payments, according to a Kellogg proxy statement. He owns or has option rights to 2 million shares of company stock.

Unlike predecessor Evans, however, Gutierrez doesn't appear to be a major Republican fund-raiser or donor. He isn't one of Bush's $100,000-and-up fund-raising "pioneers" and "rangers," and isn't listed as a donor to either of Bush's presidential campaigns.

Gutierrez made $10,500 in campaign donations at the federal level in the 2003-04 election cycle, including $4,000 to the U.S.-Cuba Democracy PAC and $6,500 to Republican congressional candidates, data compiled by the nonpartisan Center for Responsive Politics shows.


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