Other Free Encyclopedias » Brief Biographies » Biographies: Bob Graham (1942-) Biography - Awards to Francis Hendy Biography - Born to Sew » Carlos M. Gutierrez: 1953—: Corporate Executive Biography - Early Learned Work Ethic Paid Off, Led Kellogg Divisions Worldwide, Took Bold Steps To Save Company

Carlos M. Gutierrez: 1953—: Corporate Executive - Took Bold Steps To Save Company

kellogg times cereal sales

One of the first changes that Gutierrez implemented sent shock waves through the Kellogg empire. He decided to close down the original Battle Creek-based factory saying that it had become outdated and inefficient. The plant founded by W.K. Kellogg in 1906 was as potent a symbol of the company as Tony the Tiger. In addition in the close knit community of Battle Creek—nicknamed Cereal City—the closure would mean a loss of 550 jobs. It was a difficult decision as Gutierrez and his wife lived in Battle Creek and their three children attended its schools. "I care very much about this company and community," Gutierrez told The Florida Times Union. "These are painful but necessary decisions to make." However, they also brought him respect. "This is probably one of those decisions that should have been made years ago," a Michigan economist told The Florida Times Union. "But no one else had the guts to do it." Gutierrez's gutsy move resulted in an initial rise in profits by January of 2000. However, Kellogg was still in trouble as its sales slipped behind rival General Mills for the first time since the company's founding.

With over 75% of Kellogg's business dependent on downward-spiraling cereal sales, Gutierrez realized that the company had to expand beyond the cereal aisle if it wanted to survive. His solution would prove the most daring step of his career. In 2001 Gutierrez negotiated Kellogg's $4.4 billion purchase of snack food giant Keebler. "Carlos is betting his career on Keebler," a food industry analyst told Newsweek. "But if he'd relied on cereal alone, he was almost sure to lose." The purchase was costly for the ailing company and shortly after the deal was done Gutierrez announced that Kellogg was lowering its annual profit growth targets. However with Keebler, Kellogg's dependency on cereal sales dropped to 40%, a change that Wall Street liked. The general response was summed up by an analyst quoted in Hispanic: "These moves have inspired more confidence on my part that Kellogg's is now moving in the right direction."

By 2003 Wall Street's predictions had come true. Kellogg was back on an upward swing. Net earnings for the first quarter of the year were $163.9 million, a full seven percent above the first quarter of 2002. Cost per share of the company had increased by eight percent. The company had also achieved four percent in sales growth and amassed a $1 billion cash flow. Kellogg's board of directors were pleased and rewarded Gutierrez handsomely. His compensation package for 2002 totaled over $2.8 million dollars. Quite a difference from his days as a young Cuban exile living in a hotel with his displaced family. Some would say that Gutierrez's rise to the top of one of America's most respected corporations is an example of the American Dream come true. Gutierrez, with characteristic directness, might credit his achievement to something his father once told him. "Success is about results. Anything else is a bit fluffy," he recalled to The Florida Times Union. His drive for results has propelled his career since his eager days as a sales trainee and has resulted in Gutierrez becoming one of the most admired leaders—Hispanic or otherwise—in the business world.


Sources

Periodicals


Battle Creek Enquirer, April 26, 2003, p. A1; March 15, 2003, p. A1.

Cosmetics International, February 10, 2002, p.15.

Detroit News, January 28, 2000, p. 1; May 15, 2000 p. 1.

Financial Times, September 23, 1998, p. 31.

Florida Times Union, September 6, 1999, p. D1.

Hispanic Magazine, March 2002.

Knight Ridder/Tribune Business News, March 28, 2000.

Newsweek, November 6, 2000 p. 56.


On-line


"Thinking Out of the Box," Hispanic, www.hispanic online.com/magazine/2002/march/Features/kel loggs.html (May 15,2003).

"Carlos M. Gutierrez," Kellogg Company Official Website, www.kelloggs.com (May 19, 2003).


—Candace LaBalle

[back] Carlos M. Gutierrez: 1953—: Corporate Executive - Led Kellogg Divisions Worldwide

User Comments

Your email address will be altered so spam harvesting bots can't read it easily.
Hide my email completely instead?

Cancel or