Bush's Nominee Runs Kellogg Co.

By Mike Allen and Jonathan Weisman
Washington Post Staff Writers

President Bush began reshaping his economic team for a second term yesterday by nominating Carlos M. Gutierrez, the Cuban-born chief executive of the Kellogg cereal company, to replace Bush's friend Donald L. Evans as secretary of commerce.

The selection of Gutierrez, one of the nation's most prominent Hispanic corporate executives, was the opening move of what administration officials said will be a near-total remake of Bush's economic team over the next few months.

Bush, who smiled broadly as he presented his surprise choice in the White House's Roosevelt Room, called Gutierrez "a great American success story" and said he "will take office at a time of historic opportunity for our changing economy."

"With Carlos's leadership, we'll help more Americans, especially minorities and women, to start and grow their own small business," Bush said.

Administration officials said Bush and senior adviser Karl Rove believe their economic lineup was a shortcoming of the first term and are determined to seat a stronger team to sell Congress on Bush's campaign promises to add private accounts to Social Security and rewrite major portions of the tax code.

As part of the White House's desire to signal a fresh start on economic policy, Gutierrez is the first of the four Cabinet members Bush has named since his reelection who is not a White House aide. In choosing Gutierrez, the president passed up an ally described by aides as the original front-runner for the job -- Mercer Reynolds, a Cincinnati businessman who was partners with Bush in the Texas Rangers baseball team and finance chairman of the president's $255 million reelection campaign.

Republicans said more than half the Cabinet will turn over before Bush is finished. Gutierrez, whose appointment continues Bush aides' aggressive courting of Hispanics, is an unusual choice because Bush does not know him well and the post has traditionally gone to confidants of presidents. The nomination now goes to the Senate for confirmation.

Speaking briefly after Bush, Gutierrez said he left Cuba as a political refugee in 1960, joined Kellogg Co. of Battle Creek, Mich., by selling cereal out of a van in Mexico City, and became Kellogg's president and chief executive in 1999. He said his experience shows him that Bush's vision of an "ownership society" is "real, and I know it's tangible."

Bush noted during the 10-minute ceremony that Gutierrez learned English from a bellhop at a Miami hotel. "At every stage of this remarkable story, Carlos motivated others with his energy and optimism and impressed others with his decency," the president said.

Although virtually unknown in Washington, Gutierrez turned Kellogg into a corporate titan and Wall Street darling through smart deals, strict fiscal management and a shift of focus from peddling cereal by the ton to selling higher-end products.

Many people had indicated an interest in being commerce secretary, but White House officials said they sought out Gutierrez instead of the other way around. The officials said Bush had met Gutierrez on a few occasions over the past few years and had always been impressed with him. They met two weeks ago at the White House and Bush made the decision early last week at his Texas ranch, the officials said. Gutierrez informed his board on Friday, but word did not leak.

Bush aides said that in addition to Gutierrez's inspiring immigrant's story, they see his background in sales as a crucial credential, since Bush has used his economic team primarily to promote the White House agenda rather than to make policy. Officials familiar with the search process said that, Gutierrez notwithstanding, the White House has found it harder to attract a top-flight team because some candidates are unwilling to give up lucrative posts to come to Washington to be White House cheerleaders.

One economist, who was rumored to be up for a position on the Council of Economic Advisers, said he could not take a job that has been steadily pushed to the sidelines over the past two years. "You can't be attracted to a job where you'd be out of the loop," he said.

A top White House official disputed that, saying: "The idea we can't recruit people to serve because they don't want to be cheerleaders is absolutely wrong."

Massachusetts Institute of Technology economist James Poterba, the top choice to replace N. Gregory Mankiw as chairman of the Council of Economic Advisers, has declined the post, sources inside and outside the White House said. Poterba told White House officials he did not want to move to Washington and disrupt his teenage children's lives.

Stanford University's John Cogan, a top economist for President George H.W. Bush, has declined invitations to join the administration as a point man for Social Security reform, White House officials say.

White House officials, who spoke on the condition of anonymity, said both cases involved personal circumstances and were not a reflection of the desirability of White House employment. The officials asserted that the new team at the National Economic Council and the Council of Economic Advisers will be involved in crafting policies that will make up the core of Bush's plans to overhaul Social Security and the tax code.

But some Republican economists say the administration's top economic jobs have been marginalized, while their inhabitants have been publicly humiliated.

"Why would you want to take a job where you have no influence?" asked Bruce Bartlett of the conservative National Center for Policy Analysis. "What's the point?"

Stephen Friedman, who had said last week that he planned to step down as Bush's chief economic adviser, submitted a letter of resignation yesterday saying he planned to return to the private sector.

The dismissals of Treasury Secretary Paul H. O'Neill and chief economic adviser Lawrence B. Lindsey two years ago signaled that Bush would accept no dissent or friction in his administration, Bartlett said.

Treasury Secretary John W. Snow is seen as more of a promoter of White House policymaking than a policymaker, and Snow faces anonymous quotes predicting his departure. "It doesn't look like the White House treats its economic advisers very well, regardless of competence or loyalty," Bartlett said.

Among those mentioned as a possible Snow successor is New York Gov. George E. Pataki, who said in Utica, N.Y., yesterday that he is not interested. When asked why his name keeps popping up for one Bush administration job or another, Pataki replied, "God only knows."

© 2004