Prepared Foods December 6, 2004 enewsletter

President Bush chose as secretary of commerce a native of Cuba who rose from a van-driving salesman to chief executive officer of one of the world's largest food companies. If confirmed by the Senate as expected, Carlos Gutierrez, head of Kellogg Co., would replace Don Evans as top manager of the Commerce Department and its $8.1 billion budget.

The appointment marks the beginning of the expected shake-up of Bush's economic team as the administration prepares to sell second-term overhauls of Social Security and the tax code.

The appointment of Gutierrez, who has no notable connection to Bush, came as something of a surprise. Early speculation was that the Commerce post would go to Mercer Reynolds, a member of the family that owns Georgia's Reynolds Plantation resort and Bush's top fund-raiser in the 2004 election.

In Gutierrez, Bush chose a Wall Street favorite recognized for reviving a flagging business. In a White House ceremony, Bush hailed Gutierrez, whose family moved to Florida when he was 6 to escape Communist Cuba, as "a great American success story" who understands the world of business from the "first rung on the ladder to the very top."

Gutierrez, who Bush said "learned English from a bellhop in a Miami hotel," rose through Kellogg's ranks from selling Frosted Flakes out of a van in Mexico City to heading a company that this year will market nearly $10 billion worth of cereal, cookies and crackers.

"With Carlos' leadership, we'll help more Americans, especially minorities and women, to start and grow their own small business," Bush said. "He will be a strong, principled voice for American business and an inspiration to millions of men and women who dream of a better life in our country."

Gutierrez vowed to be a forceful advocate. "I believe passionately in your leadership and the direction you've set," Gutierrez told Bush. "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."

The commerce secretary oversees a vast bureaucracy charged with measuring the $11.8 trillion American economy and promoting growth and U.S. competitiveness abroad. In addition, the Commerce Department is responsible for a broad range of activities, ranging from conducting the national census to tracking and predicting the weather.

Tim Kane, an economic policy expert with the Heritage Foundation, a conservative Washington research group, said picking Gutierrez, from a company based in Battle Creek, Mich., showed Bush wanted an outside-the-Beltway type. "You don't get more of an outsider than someone who's from a big company in a small town in rural America," Kane said.

Gutierrez rose from his salesman job to become general manager of Kellogg's Mexican manufacturing operations in 1983, taking over a facility that the company ranked last among its plants worldwide. Within two years, he had transformed it into one of Kellogg's top plants. He became chief executive of Kellogg in April 1999. Since taking over, Gutierrez narrowed the company's primary focus to cereal and wholesome snacks.

Kellogg's net sales rose from $6.2 billion in 1999 to $8.8 billion last year, a 43% increase, helping to drive earnings per share up by 131%.

Gutierrez said he has no doubt that the U.S. will remain the best country in the world with which to do business.

For its part, Kellogg Co. selected director James M. Jenness to succeed Gutierrez as chairman and chief executive. Jenness will take over when Gutierrez officially resigns.

Gutierrez, a 29-year veteran of the cereal giant, will continue to lead the company until he is sworn in as Commerce secretary.

Jenness has been on Kellogg's board since July 2000 and currently serves on four committees. He had been CEO since 1997 of Integrated Merchandising Systems LLC, a unit of ad giant Omnicom Group Inc. which handles outsource management for retail promotion and branded merchandising.