The Detroit News
Tuesday, November 30, 2004

Kellogg CEO worked way up to Cabinet

Commerce nominee Carlos Gutierrez rose from Cuban refugee to captain of industry.

By Francis X. Donnelly / The Detroit News

As federal commerce secretary, Carlos Gutierrez would be the chief advocate for American business.

But his resume goes far beyond dollars and cents, business acquaintances said. He's a living embodiment of the American Dream.

Gutierrez, who was nominated for the commerce job by President Bush on Monday, was 6 when his family fled Cuba with little money. He learned English from a Miami bellhop, went to work for Kellogg, rose to its top position and turned around the struggling Michigan company.

Having scaled a capitalist mountaintop, he now moves on to a governmental one.

"We never imagined that this country would give me this great opportunity," said Gutierrez, surrounded by his wife and three children in the Roosevelt Room of the White House.

Gutierrez, 51, is the second Hispanic nominated by Bush for his second-term Cabinet. Alberto Gonzalez was tapped earlier for attorney general.

With former Michigan Sen. Spencer Abraham resigning as energy secretary, the appointment would keep a Wolverine State presence in the Cabinet.

Bush and other supporters of Gutierrez said his promotion transcends matters of geography and nationality.

"He understands the world of business from the first rung on the ladder to the very top," the president said.

Gutierrez was described by co-workers and friends in seemingly contradictory ways. He has both a steely resolve and a light touch, they said. He's a workaholic and a born salesman.

While moving around the globe for Kellogg, he twice angered cities shortly after his arrival by shutting down the local cereal plant. One of those closings was in Battle Creek, the birthplace of the company in 1906.

Gutierrez faced down his critics, saying the closings were needed for the long-term health of the company.

Inside the company, however, he was known for carrying his power lightly, quick to praise others and remember the names of far-flung underlings.

"He just knew how to get along with people," former Kellogg worker Diane Dickey said before the appointment. "You get a feeling of his strength, but it's very quiet strength."

That strength has been matched by results during Gutierrez's five years as chief executive.

He inherited a sick company in a sick industry. Most people had stopped eating cereal. They especially stopped eating Kellogg cereal as the company lost its No. 1 ranking in the industry.

Enter Gutierrez, who had watched the firm's long decline as an employee for a quarter of a century. He overhauled the company in every way, from products to promotions to personnel.

Departing from past strategies, he boosted sales by focusing the company's attention on its best-selling brands and ones with higher profits. He then plowed the profits into marketing new items.

Sales and profits began to reverse themselves shortly after Gutierrez took charge. By 2002, Kellogg was once again the top maker of cereal in the nation.

"Gutierrez led the company through a critical period of change that resulted in several years of exceptional results," Kellogg board member Gordon Gund said in a prepared statement.

The company now seems to post better sales and earnings every quarter, becoming a darling of Wall Street.

Net sales have jumped 43 percent, from $6.2 billion in 1999 to $8.8 billion last year. During the same period, earnings per share rose 131 percent, from 83 cents to $1.92.

As commerce secretary, Gutierrez would lead a sprawling federal agency with 40,000 people. Kellogg has 25,000 workers in 180 countries.

Among the jobs handled by the low-profile department are compiling economic data and handling disputes over trade.

Former Michigan Gov. John Engler said his dealings with Gutierrez showed how adept he was at doing business around the world.

"He is the most international person ever to be commerce secretary," said Engler, president of the National Association of Manufacturers.

"He really knows what is happening in markets around the world."

In joining the second-term Cabinet, Gutierrez would be the first member not selected from Bush's staff. He is replacing Don Evans, one of the president's oldest friends.

Gutierrez also hasn't been a heavy political contributor to the president or Republicans in general.

All of that would make him somewhat of an outsider in his new position. But being an outsider is nothing new for Gutierrez.

His family fled Havana after Fidel Castro seized power in 1959. Gutierrez's father, Pedro, was a pineapple exporter who was arrested and jailed for a day under the new regime.

Gutierrez, his brother and parents then flew to Miami with $2,000 and 25 suitcases full of clothes. Young Carlos learned English from a bellhop at the cramped hotel where the family was staying.

"I have had the opportunity to live that American Dream so I know that the president's vision is noble," Gutierrez said Monday. "I know it's real, and I know it's tangible."

He was a natural salesman even as a youngster. During his senior year at a Fort Lauderdale high school, he went door to door selling magazine subscriptions.

Gutierrez first went to work for Kellogg in Mexico City, selling cereal from the back of his van to stores in a run-down part of the city.

He eventually was promoted and became known for turning around poorly producing units. In three years, he had transformed the company's worst producing plant, based in Mexico, into the best one.

As he rose in the ranks, however, he again experienced what it was like to be an outsider. Most of the corporate suite was lily-white. Gutierrez, with his thick thatch of black hair and perfectly styled mustache, stood out.

The lack of Hispanics in powerful positions pushed him to work even harder, he said in an earlier interview.

Even after reaching the company's top spot, Gutierrez has never slowed down. Board members have had to push him to spend more time with his family or pursue a hobby.

For the record, he does have hobbies: reading and watching baseball, especially the New York Yankees.

The Associated Press contributed to this report. You can reach Francis X. Donnelly at (313) 223-4186 or