Boeing names industry veteran Kelly Ortberg as CEO

Image credit: Sourced from Boeing

Boeing, on Wednesday, named aerospace industry veteran Kelly Ortberg as its new president and CEO, tasking the former Rockwell Collins executive in turning around the struggling planemaker, after it reported a $1.4bn loss.

Ortberg will assume his duties on August 8, Boeing said.

We’re pleased to announce Kelly Ortberg as Boeing’s new President and Chief Executive Officer.

Details here: https://t.co/qLYPKYHmLx pic.twitter.com/WnP33PTftK

— The Boeing Company (@Boeing) July 31, 2024

He will succeed Dave Calhoun, who earlier this year announced his intention to retire from the company, having served as president and CEO since January 2020, and as a member of Boeing’s Board of Directors since 2009.

“The Board conducted a thorough and extensive search process over the last several months to select the next CEO of Boeing and Kelly has the right skills and experience to lead Boeing in its next chapter,” said Steven Mollenkopf, chair of the Board.

“Kelly is an experienced leader who is deeply respected in the aerospace industry, with a well-earned reputation for building strong teams and running complex engineering and manufacturing companies. We look forward to working with him as he leads Boeing through this consequential period in its long history.”

“The Board would also like to thank Dave Calhoun for his strong leadership at Boeing, first as chair and then as CEO, when he stepped in to steer the company through the challenges of recent years,” added Mollenkopf.

“I’m extremely honoured and humbled to join this iconic company,” said Ortberg. “Boeing has a tremendous and rich history as a leader and pioneer in our industry, and I’m committed to working together with the more than 170,000 dedicated employees of the company to continue that tradition, with safety and quality at the forefront. There is much work to be done, and I’m looking forward to getting started.”

Ortberg, 64, brings over 35 years of aerospace leadership to this position, added the aircraft manufacturer’s official statement.

Financial results

The company also posted a bigger quarterly loss, as its troubled defence and space business exacerbated the financial strain on the US planemaker that has already scaled back commercial aircraft production to tackle a quality crisis.

Boeing‘s Defence, Space and Security unit, one of its three main businesses, has lost billions of dollars in 2023 and 2022, which executives attributed to cost overruns on fixed-price contracts.

Such contracts have high margins but leave defence contractors vulnerable to inflationary pressures that have dented US corporate earnings in the last few years.

The planemaker used to bid aggressively for fixed-price contracts before the pandemic, but has now said it would pivot away from such contracts to stem losses at the business, which amounted to $1.76bn last year.

Ahead of last week’s Farnborough Air Show, the unit’s head had said it was “significantly challenged” during the quarter.

Boeing CFO Brian West said, in May, the planemaker will burn rather than generate cash in 2024, hamstrung by lower jet deliveries compared to last year.

Boeing’s ongoing crisis

The company is mired in crisis after a cabin panel on a 737 MAX 9 jet blew off midair in January, which led to a slowdown in production of its top-selling plane and a management shakeup, even as it came under intense regulatory and legal scrutiny.

The US aviation regulator has capped production of 737 MAX jets at 38 per month, though Reuters has reported that Boeing has been producing jets during some weeks at a much lower level.

That has led to lower deliveries, frustrating customers.

During the second quarter, Boeing delivered a total of 92 aircraft, down 32 per cent from last year.

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