Boeing has named the aerospace industry veteran Robert “Kelly” Ortberg as its new president and CEO as the struggling planemaker fights to repair its reputation and shore up its business.
A terrifying cabin panel blowout in January sparked the company’s biggest safety crisis since two fatal crashes in 2018 and 2019, which killed 346 people.
Unveiling its new boss on Wednesday, Boeing posted a $1.4bn loss for the second quarter. It has spent months scrambling to reassure regulators, airlines and passengers.
Ortberg, 64, led the aerospace supplier Rockwell Collins before it became part of the aerospace and defence giant RTX. He will assume his duties on 8 August, Boeing said. He will replace Dave Calhoun, the current CEO, who announced he would step down earlier this year.
Earlier this month, Boeing agreed to plead guilty to a US criminal fraud charge stemming from the two crashes, after federal prosecutors found it in breach of a 2021 agreement which had protected the company from prosecution.
“The board conducted a thorough and extensive search process over the last several months to select the next CEO of Boeing and Kelly has the right skills and experience to lead Boeing in its next chapter,” Boeing’s chairman, Steven Mollenkopf, said on Wednesday.
“I’m extremely honored and humbled to join this iconic company,” said Ortberg, who claimed that safety and quality would be “at the forefront” on his watch. “There is much work to be done, and I’m looking forward to getting started.”
Executives at the company claimed workers have been emboldened to speak up in recent months. But as staff and union officials described “panic mode” on its production line, a series of whistleblowers came forward with allegations about their experiences working for Boeing – and the safety of its planes.
Justin Green, partner at Kreindler & Kreindler law firm, said Ortberg’s “first step” should be meet relatives of those who died. Kreindler & Kreindler is representing 34 families who lost loved ones on Ethiopian Airlines Flight 302, one of two fatal crashes. Such a move would be “necessary to appreciate the horrific cost of Boeing’s deadly negligence”, said Green.
Boeing, which has scaled back commercial aircraft production amid concerns over the quality of its jets, posted a bigger quarterly loss on Wednesday as its troubled defense and space business exacerbated the financial strain on the US planemaker.
Shares in the company rose 2% during pre-market trading in New York. Its stock market value has dropped by a quarter since the start of the year.
Boeing’s defense, space and security unit, one of its three main businesses, has lost billions of dollars in 2023 and 2022, which executives attributed to cost overruns on fixed-price contracts.
Such contracts have high margins but leave defense contractors vulnerable to inflationary pressures that have dented US corporate earnings in the last few years.
Brian West, Boeing’s CFO, said in May the planemaker would burn rather than generate cash in 2024, hamstrung by lower jet deliveries compared with last year.
The company’s latest crisis began in January when a door plug blew off a brand-new 737 Max 9 shortly after it took off from Portland, Oregon, forcing an Alaska Airlines crew to conduct an emergency landing. It raised questions about Boeing’s production processes, and led to a marked drop in manufacturing of its bestselling Max jets.
That has led to fewer deliveries, frustrating customers. During the second quarter, Boeing delivered a total of 92 aircraft, down 32% from last year.
Reuters contributed reporting
