Robert K. “Kelly” Ortberg is the new president and chief executive officer of The Boeing Company, effective August 8, 2024. Member of the board.
Courtesy: The Boeing Company
Aerospace veteran Robert “Kelly” Ortberg becomes boeing companyOn Thursday, the new chief executive was tasked with a unique mission: restoring the reputation of an American manufacturing icon.
This massive goal will involve thousands of daily decisions that will determine whether Boeing can regain the trust of regulators, airlines and the public; eliminate persistent production defects; and deliver aircraft on time and consistently to customers large and small. ; and stop burning money.
Cash burn has reached about $8 billion so far this year and is rising. Meanwhile, Boeing shares have fallen about 37% this year as of Wednesday.
Ortberg’s first day included a walk on the factory floor at the Boeing factory in Renton, Washington, where the company builds the best-selling but troubled 737 Max. He plans to talk to employees and review safety and quality programs, and plans similar visits at other Boeing plants.
“I can’t tell you how proud and excited I am to be a part of the Boeing team,” he said in a note to employees Thursday. “While we clearly have more work to do to restore trust, I am confident that by working together we will position the company to be the industry leader we desire.”
Analysts and industry insiders are cautiously optimistic, portraying Ortberg, 64, an industry veteran with more than 30 years of experience at commercial and defense suppliers, as a good listener. After rising through the ranks at Rockwell Collins, he held senior positions at the company for several years. Perhaps most importantly, he is a Boeing outsider.
“This is a guy who has a great reputation in the industry and a lot of experience,” said Richard Aboulafia, managing director of Aerodynamics Consulting. “He’s known for being a good listener and getting people to talk back.”
Cross-enterprise troubles
These skills will be key as Boeing tries to stabilize its production and eliminate manufacturing defects.
Boeing’s top commercial aerospace safety chief tells The National Transportation Safety Board learned earlier this week that the company was working on designing a fix so that the near-catastrophic door jam burst it faced earlier this year would never happen again.
The hearing was part of the NTSB’s investigation into a door jam burst in the air on a months-old Boeing 737 Max 9 aircraft as it climbed out of Oregon. Although no one was seriously injured in the crash, the accident plunged Boeing back into crisis mode just as it was trying to recover from two fatal crashes of its best-selling 737 Max aircraft in 2018 and 2019. .
Worker testimony at the NTSB hearing also showed the stress and frequent repairs involved in manufacturing the planes, putting the spotlight on Boeing plants.
“I will be transparent with you every step of the way, sharing progress and what we must do better,” Ortberg said in the memo. He vowed to share the report with employees and “provide you with my The latest from what we’re seeing on the ground and hearing from our teammates and stakeholders.”
Boeing agreed last month to admit deceiving the U.S. government during Max certification, a deal that will require the company to have an independent corporate monitor for three years.
But Ortberg not only has to deal with problems in its commercial aircraft business, including delays in certification of new 737 and 777 models, but also in its defense unit.
The business unit is facing problems with two 747s that will serve as the next generation of Air Force One but are years behind schedule. Meanwhile, NASA is discussing whether to use SpaceX to lift astronauts Butch Wilmore and Suni Williams from international space after a fire broke out in Boeing’s Starliner capsule that launched in early June. Bring it back to the station.
The decision on whether to launch new planes also looms as Boeing loses ground to rival Airbus.
Bank of America aerospace analyst Ron Epstein said Ortberg’s first 100 days as CEO will be critical.
“The decisions he makes early in his tenure will have an impact on the company for generations,” he said in a note Monday.
Ortberg and his team need to make sure Boeing workers are trained, with thousands of new workers at the factory after experienced workers were bought out or laid off amid the pandemic. The union representing about 30,000 Boeing factory workers in Washington state and Oregon is seeking a raise of more than 40%, and last month members authorized a strike if a deal is not reached by September.
“Safety and quality principles should be as important as productivity,” Jon Holden, local president of the International Association of Machinists and Aerospace Workers, said in a statement last week. “Potential collaboration with the new CEO could be Boeing A great opportunity to demonstrate their dedication to their employees and recognize the manufacturing excellence and capabilities of skilled IAM members on the shop floor.”
Last week, amid another quarterly loss, Boeing announced Ortberg would replace Dave Calhoun, who said in March he would step down by the end of the year.
It’s part of a larger executive shakeup that comes after the door jam bursts. Calhoun himself took over the crisis-ridden Boeing in early 2020, replacing Dennis Muilenburg, who was fired over his handling of two Max crashes.
While Boeing remains headquartered in Arlington, Virginia (the company announced it will move its headquarters there from Chicago in 2022), Ortberg will be based in the Seattle area, making him Ability to keep tabs on Boeing’s production base for most of its commercial jetliners.
“In speaking with our customers and industry partners today, I can tell you that without exception, everyone wants us to succeed,” Ortberg said in a first-day note to employees. “In many cases, they need us to be successful. It’s a good foundation for us to build on.”
It’s important for Ortberg and the company to maintain good relationships with customers and hundreds of suppliers struggling due to intense pandemic demand. Boeing Co.’s relationship with its major customers has been affected recently, with a leadership shake-up in the wake of increased aircraft delays caused by burst door jams and airline CEOs seeking a meeting with the company’s board.
Southwest Airlines Boeing, one of its biggest customers, has like other airlines scaled back growth plans, citing delays in deliveries of Boeing’s new, more fuel-efficient jets. The airline’s chief executive hinted that Ortberg was on the verge of accomplishing a great feat.
“We look forward to working with Kelly Ortberg as we work to return Boeing to its position as America’s leading aerospace company,” Chief Executive Bob Jordan said in a written statement. “A strong Boeing is important to Southwest Airlines and our There are benefits to the industry.”
—CNBC’s Michael Sheetz contributed to this article.
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