Kelly Ortberg Takes the Helm at Boeing

Boeing’s new President and CEO, Kelly Ortberg. Image – Boeing

In a significant move aimed at revitalizing the aerospace giant, Boeing’s Board of Directors has appointed Robert K. “Kelly” Ortberg as the company’s new president and chief executive officer. Effective August 8, 2024, Ortberg will succeed Dave Calhoun, who announced his retirement earlier this year.

Ortberg brings a wealth of experience to the role, having spent over 35 years in the aerospace industry. His career trajectory includes key leadership positions at Rockwell Collins, where he ultimately served as president and CEO. He was instrumental in the company’s merger with United Technologies, which formed RTX.

His appointment comes at a crucial juncture for Boeing as the company has faced a series of challenges in recent years, severely impacting its reputation and financial performance.

Problems with Boeing’s 737 MAX first emerged following the two fatal crashes of the Boeing 737 MAX in 2018 and 2019, which led to a global grounding of the aircraft, resulting in significant financial losses and damage to Boeing’s reputation.  Beyond the crashes, the 737 MAX program faced production issues, including concerns about quality control and rushed development.   Then, in January 2024, an Alaska Airlines Boeing 737 experienced a terrifying incident mid-flight when a door-sized section of the fuselage blew open. This event raised serious questions about aircraft integrity and manufacturing processes, adding to Boeing’s safety concerns.

As a result, the FAA has taken significant steps to increase its oversight of Boeing. It has increased its on-site presence at Boeing’s manufacturing facilities, slowed production of the 737MAX as it reviews processes, and audited the line finding multiple non-compliance issues related to manufacturing process control, parts handling, and product control.

As a result of these challenges, Boeing has incurred substantial financial losses. For the second quarter of 2024, Boeing reported that revenues dropped 15 percent to $16.9 billion, from $19.8 billion a year ago.  The company posted a loss of $1.4 billion for the quarter compared to a loss of $149 million in the second quarter of 2023.  These trends are expected to continue in the near term.  The company recently plead guilty to one count of conspiracy related to the two 737 MAX crashes and will pay over $940 million as result of the deal. Meanwhile, production delays with the 737 MAX and other aircraft programs have led to increased costs, and reduced deliveries, impacting Boeing’s bottom line.

The confluence of safety crises, financial setbacks, and regulatory scrutiny has created an unprecedented challenge for Boeing. The 737 MAX debacle, in particular, has cast a long shadow over the company’s reputation and financial performance. The subsequent revelations of quality control issues and the fuselage incident have only exacerbated these problems. This perfect storm of challenges requires a leader with exceptional crisis management skills, a deep understanding of the aerospace industry, and the ability to restore public confidence.

 

 

A military history enthusiast, Richard began at Forecast International as editor of the World Weapons Weekly newsletter. As the Internet grew in importance as a research tool, he helped design the company's Forecast Intelligence Center and currently coordinates the EMarket Alert newsletters for clients. Richard also manages social media efforts, including two new blogs: Defense & Security Monitor, covering defense systems and international issues, and Flight Plan, which focuses on commercial aviation and space systems. For over 30 years, Richard has authored the Defense & Aerospace Companies, Volume I (North America) and Volume II (International) services. The two books provide detailed data on major aerospace and defense contractors. He also edits the International Contractors service, a database that tracks all the contractors involved in the programs covered in the FI library. More recently he was appointed Manager, Information Services Group (ISG), a new unit that encompasses developing outbound content for both Forecast International and Military Periscope.

About Richard Pettibone

A military history enthusiast, Richard began at Forecast International as editor of the World Weapons Weekly newsletter. As the Internet grew in importance as a research tool, he helped design the company's Forecast Intelligence Center and currently coordinates the EMarket Alert newsletters for clients. Richard also manages social media efforts, including two new blogs: Defense & Security Monitor, covering defense systems and international issues, and Flight Plan, which focuses on commercial aviation and space systems. For over 30 years, Richard has authored the Defense & Aerospace Companies, Volume I (North America) and Volume II (International) services. The two books provide detailed data on major aerospace and defense contractors. He also edits the International Contractors service, a database that tracks all the contractors involved in the programs covered in the FI library. More recently he was appointed Manager, Information Services Group (ISG), a new unit that encompasses developing outbound content for both Forecast International and Military Periscope.

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