Boeing has announced the appointment of Robert “Kelly” Ortberg as its new president and CEO, effective August 8, 2024. Ortberg, a seasoned aerospace industry veteran, will replace Dave Calhoun, who is stepping down amid a series of crises and financial losses for the company.
Key Highlights
- Robert “Kelly” Ortberg named new president and CEO of Boeing.
- Ortberg to replace Dave Calhoun, effective August 8, 2024.
- Boeing reports a $1.4 billion loss for the second quarter of 2024.
- Ortberg previously led Rockwell Collins and has a background in engineering.
- Boeing faces ongoing challenges including safety issues, production problems, and legal troubles.
Leadership Change at Boeing
Boeing has named Robert “Kelly” Ortberg as its new president and CEO, effective August 8, 2024. Ortberg, who previously led aerospace supplier Rockwell Collins, will take over from Dave Calhoun, who announced his retirement earlier this year.
The appointment comes at a critical time for Boeing, which is grappling with multiple challenges, including safety scandals, production issues, and significant financial losses.
Financial Struggles
Boeing reported a net loss of $1.4 billion for the second quarter of 2024, more than triple the loss from the same period last year.
The company’s revenue also fell to $16.8 billion, down 14% from the previous year. The disappointing financial results are attributed to ongoing production problems and increased scrutiny of the safety and quality of its aircraft.
Safety and Quality Concerns
The company has been under intense scrutiny following a series of safety incidents, including a cabin panel blowout in January 2024 and two fatal crashes in 2018 and 2019 that killed 346 people.
These incidents have raised questions about Boeing’s production processes and have led to a marked drop in the manufacturing of its bestselling 737 Max jets.
Legal and Regulatory Challenges
Boeing recently agreed to plead guilty to a US criminal fraud charge related to the two fatal crashes, after federal prosecutors found it in breach of a 2021 agreement that had protected the company from prosecution.
The Federal Aviation Administration (FAA) has also increased its oversight of the company, further complicating its efforts to stabilize production and regain the trust of regulators, airlines, and passengers.
Ortberg’s Vision and Challenges
Ortberg, 64, brings a wealth of experience to Boeing, having led Rockwell Collins before it became part of aerospace and defense giant RTX.
He has a background in engineering, which may help address concerns that Boeing’s leadership has been too focused on financial results rather than engineering quality. Ortberg has expressed his commitment to prioritizing safety and quality as he takes on his new role.
“I’m extremely honored and humbled to join this iconic company,” Ortberg said. “There is much work to be done, and I’m looking forward to getting started.”
Future Outlook
Boeing’s board chairman, Steven Mollenkopf, stated that Ortberg was chosen after a thorough and extensive search process. “Kelly has the right skills and experience to lead Boeing in its next chapter,” Mollenkopf said.
Despite the challenges ahead, Boeing’s leadership is optimistic that Ortberg’s appointment will help steer the company towards a more stable and prosperous future.
Boeing’s stock saw a slight increase in pre-market trading following the announcement of Ortberg’s appointment, although its market value has dropped by a quarter since the start of the year.
The company’s defense, space, and security unit has also been a significant financial drain, losing billions of dollars due to cost overruns on fixed-price contracts.
As Ortberg prepares to take the helm, Boeing faces a daunting task of addressing its myriad issues while striving to restore its reputation and financial health.
