Robert K. « Kelly » Ortberg is Boeing's new president and CEO, and will also serve on Ortberg Boeing's board of directors beginning August 8, 2024.
Courtesy: Boeing
Astronaut Robert « Kelly » Ortberg BoeingA new CEO on Thursday with a singular mission: restore the reputation of an American manufacturing icon.
That ambitious goal will involve thousands of daily decisions that will determine whether Boeing can win back the trust of regulators, airlines and the public. Ending recurring manufacturing defects; Providing timely and consistent flights to large and small customers; And stop burning money.
That cash burn is running at about $8 billion so far this year and counting. Meanwhile, Boeing shares are down 37% this year as of Wednesday.
Ordberg's Day 1 operation is underway on the Boeing factory floor in Renton, Washington, where it builds its best-selling but troubled 737 Max. He plans to speak with employees and review safety and quality programs, with similar visits coming at other Boeing plants.
« I can't tell you how proud and excited I am to be a member of the Boeing team, » he said in a memo to employees Thursday. « We have a lot of work to do in restoring trust, and I'm confident that working together, we can return the company to the industry leader we all expect it to be. »
Analysts and industry insiders are cautiously enthusiastic, painting the 64-year-old Ortberg — a veteran of more than three decades of the industry, after years at commercial and defense supplier Rockwell Collins — as a good listener. Engineering background (he holds a mechanical engineering degree). Perhaps most importantly, he is a Boeing foreigner.
« This guy has an amazing reputation and experience in the industry, » said Richard Aboulafia, managing director of Aerodynamic Advisory. « He has a reputation for listening and letting people back off. »
Trouble in business
Those skills will be key as Boeing tries to stabilize its production and eliminate manufacturing defects.
said the top security official for Boeing's commercial aerospace division The National Transportation Safety Board heard earlier this week that the company is fixing the design so the catastrophic door plug blowout it faced earlier in the year won't happen again.
It was part of the NTSB's investigation into a packed, months-old Boeing 737 Max 9 when a door plug exploded mid-air as it took off from Oregon. Although no one was seriously injured in the crash, it has thrown Boeing back into crisis mode as it tries to move on from two fatal crashes of its best-selling 737 Max planes in 2018 and 2019.
The employee's testimony at the NTSB hearing showed production pressure and frequent revisions to the planes, drawing attention to Boeing's factories.
« I will be transparent with you every step of the way, sharing news of progress as well as where we need to do better, » Ortberg said in the memo. He promised to share reports with employees, saying, « I'll give you timely updates on what I'm seeing and hearing from our teammates and our stakeholders. »
Boeing agreed last month to plead guilty to defrauding the U.S. government during MAX certification, a deal that would require an independent corporate monitor of the company for three years.
But Aardberg must address issues not only in its business jet business, but also in its defense division, including the delayed certification of new 737 and 777 models.
That division of the business is facing problems with two 747s, which will serve as the next Air Force One aircraft but are years behind schedule. Meanwhile, NASA has debated whether to use SpaceX instead to bring back astronauts Butch Wilmore and Suni Williams from the International Space Station after Boeing's misfired Starliner capsule launched in early June.
A decision is also being made on whether to launch a new aircraft as Boeing has landed a rival to Airbus.
Bank of America aerospace analyst Ron Epstein said Ordberg's first 100 days as CEO will be critical.
« Decisions made early in his tenure will have generational implications for the company, » he said in a note on Monday.
Ortberg and his team must ensure that Boeing's workforce is trained, thousands of new workers at factories after more experienced employees were bought out or laid off by the pandemic. A union representing about 30,000 Boeing factory workers in Washington state and Oregon is demanding wage increases of more than 40% and last month, members authorized a strike unless a deal is reached this September.
« The principles of safety and quality must be equally important as production rates, » John Holden, local president of the International Union of Machinists and Aerospace Workers, said in a statement last week. « This potential collaboration with the new CEO will be an important opportunity for Boeing to demonstrate its commitment to its workforce and recognize the exceptional productivity and capability of talented IAM members on the shop floor. »
Last week, with another quarterly loss, Boeing announced that Ortberg will replace Dave Calhoun, who will step down by the end of the year.
A major administrative shake-up was part of the door after the plug exploded. Calhoun took over a Boeing in crisis in early 2020, replacing Dennis Muilenburg, who was fired for handling the two Max crashes.
While Boeing is still based in Arlington, Virginia — and has announced it will move its headquarters from Chicago in 2022 — Ortberg will remain in the Seattle area, a place where most of Boeing's business jetliner production comes from.
« In talking to our customers and industry partners to date, I can tell you that without exception, everyone wants us to succeed, » Otberg told employees in his first-day memo. « In many cases, they need us to succeed. It's a great foundation for us to build on. »
Getting on the right track with customers and hundreds of suppliers struggling with pandemic-demand whiplash is critical for Ortberg and company. Relations with Boeing's bread-and-butter customers have suffered recently, and its leadership shakeup came after the airline's CEO sought a meeting with the company's board.
Southwest Airlines It remains one of Boeing's biggest customers and, like other carriers, has scaled back its growth plans, citing delays in deliveries of Boeing's new, more fuel-efficient jets. The airline's CEO pointed to the huge feat that Artberg has ahead of it.
« We look forward to working with Kelly Ortberg in her efforts to return Boeing to its place as a leading American aerospace company, » CEO Bob Jordan said in a written statement. « A strong Boeing is great for Southwest Airlines and it's great for our industry. »
— CNBC's Michael Sheets contributed to this article.
