Boeing faces a tumultuous year marked by quality control issues, production delays, and eroded public trust. The aerospace giant has struggled to regain footing after a series of setbacks, including a recent near-catastrophic incident involving its 737 Max aircraft. With no annual profit in five years and a significant operating loss reported for the recent quarter, Boeing aims for a turnaround with new leadership. Robert “Kelly” Ortberg, an experienced aerospace executive, is set to take over as CEO and president on August 8, with the daunting task of restoring the company’s reputation.
Ortberg’s Extensive Aerospace Experience
Ortberg, 64, hailing from Dubuque, Iowa, studied mechanical engineering in college. His career began at semiconductor company Texas Instruments before moving to Rockwell Collins in 1987. As CEO of Rockwell Collins, Ortberg managed its integration with United Technologies in 2018, later overseeing the merged company’s aerospace unit until his retirement in 2021. His technical background could resonate with critics emphasizing engineering proficiency over financial expertise, a common critique of past Boeing leadership.
Boeing’s Challenges and Future Directions
The challenges at Boeing are multifaceted. The January incident involving a Boeing 737 Max led to the U.S. Federal Aviation Administration capping production at 38 units per month, impacting the commercial division, which reported a $715 million loss last quarter. The defense, space, and security division faced a $913 million loss, highlighting difficulties with the Starliner spacecraft and new Air Force One aircraft. However, Boeing’s repair and supply unit remained profitable, bringing in $870 million.
Ortberg’s appointment may also hint at a shift for Boeing’s headquarters. While based in Arlington, Virginia for the past two years, he will be operating from Seattle, Boeing’s original home. This move could signal a return to its roots, potentially influencing future corporate strategies. Additionally, Boeing will waive its mandatory retirement age for Ortberg, ensuring his extensive expertise is fully utilized.
Ortberg, expressing his commitment to safety and quality, stated,
“There is much work to be done, and I’m looking forward to getting started.”
His focus will be on addressing critical issues, strengthening regulatory relations, and rebuilding customer trust.
Boeing’s history of challenges with the 737 Max, including two fatal crashes in 2018 and 2019, has led to substantial scrutiny. The company recently admitted to misleading regulators, further tarnishing its reputation. Ortberg’s engineering background contrasts with previous CEOs, potentially altering the company’s approach to leadership and problem-solving. The decision to base him in Seattle might reemphasize Boeing’s engineering roots, distancing from recent financially-focused leadership paradigms.
Although Boeing’s recent financial results revealed significant losses, there is hope that experienced leadership can navigate these turbulent times. Ortberg’s track record and engineering focus aim to rectify past mistakes and steer the company towards stability and profitability.
