Boeing has named Robert “Kelly” Ortberg, a veteran aerospace executive with a background in mechanical engineering, as its new Chief Executive Officer, effective August 8. Ortberg, who previously led Rockwell Collins before its merger with United Technologies to form RTX (formerly Raytheon), will take over from David Calhoun. Calhoun, who announced his retirement earlier this year, is set to remain with the company as a special adviser until March 2025, ensuring a smooth transition.
Ortberg’s appointment comes at a critical juncture for Boeing, which is grappling with a host of challenges including legal issues, regulatory scrutiny, production setbacks, and financial losses. The company reported a staggering $1.4 billion loss for the second quarter, driven by declining revenue and setbacks in both its commercial and defense sectors. This loss was significantly worse than analysts’ forecasts, reflecting the broader difficulties Boeing is facing.
The appointment of Ortberg is seen as a strategic move to steer Boeing through its turbulent period. Boeing Chairman Steven Mollenkopf praised Ortberg for his extensive experience in managing complex aerospace engineering and manufacturing operations, which he believes will be crucial in navigating the company’s current difficulties. Ortberg himself expressed eagerness to tackle the challenges ahead, noting the substantial work required to stabilize and advance Boeing’s position.
Boeing’s recent troubles include a range of issues from safety culture concerns to production inefficiencies. The company has been under intense scrutiny following its agreement to plead guilty to a federal fraud charge related to the 737 Max jetliner and two tragic crashes that claimed 346 lives. This legal fallout has led to increased oversight by the Federal Aviation Administration (FAA) and restrictions on Boeing’s production capabilities. Additionally, the company has been criticized for manufacturing shortcuts and faced significant setbacks with its Starliner capsule, which encountered technical issues that delayed its mission.
Ortberg’s appointment is expected to provide a fresh perspective and leadership to address these ongoing problems. Unlike his predecessor, who was perceived as more of a caretaker during the recovery phase, Ortberg is anticipated to focus on stabilizing and rebuilding Boeing’s reputation and operations. His prior role at Rockwell Collins involved managing high-stakes aerospace projects, which aligns with the strategic needs of Boeing as it seeks to recover from its recent setbacks.
The new CEO will face immediate tasks including working closely with the FAA to resolve production issues and address regulatory concerns. Boeing’s commercial airplanes division has struggled with a significant decline in aircraft deliveries, and its defense unit has faced financial difficulties due to cost overruns on government contracts. Ortberg’s leadership will be crucial in improving these aspects and steering the company towards a more stable and profitable future.
Despite the challenging environment, there is optimism surrounding Ortberg’s appointment. Industry analysts, including Richard Aboulafia, have expressed positive views on his selection, noting his respected leadership in the aerospace sector. Analysts believe that Ortberg’s experience and leadership could be pivotal in turning Boeing’s fortunes around.
As Boeing moves forward with Ortberg at the helm, the company will need to address a range of critical issues including its production processes, regulatory compliance, and financial health. The transition to Ortberg’s leadership marks a significant moment for Boeing as it seeks to restore confidence and stability while continuing to manage its extensive list of operational and financial challenges.