Boeing announced today (July 31) it has named former Rockwell Collins executive Kelly Ortberg as its new president and CEO. The appointment comes after a monthslong search to replace Dave Calhoun as president. Calhoun announced earlier in the year he would step down by year-end. Board Chair Larry Kellner also announced he would not stand for reelection.
Both departures are attributed to Boeing’s struggles in the wake of multiple high-profile negative stories involving transparency, quality control and a flagging corporate culture.
Ortberg, who assumes his role as of Aug. 8, first must address financial losses and begin rebuilding trust with the aerospace industry, the public, U.S. and foreign regulators, and investors. According to a Reuters report, Boeing looks to rebound production of its strong-selling single-aisle 737 line. The target is to ramp up production to 38 aircraft per month from the 25 jets rolled out in June. Chief Financial Officer Brian West told analyst callers today that he expects the current drain on cash to continue through the third quarter and spending for the year to be greater than expected.
Ortberg’s appointment checks off two important boxes in the eyes of many Boeing critics. He is a mechanical engineer with 30 years of experience in aerospace—five years as head of avionics giant Rockwell Collins—and he plans to set up shop in Seattle. Boeing has invoked the scorn of many by displaying what is considered an undue focus on financials and not enough emphasis on engineering over the past two decades. And when the corporate headquarters moved out of Washington State 23 years ago, it was seen as a turn away from the engineering culture that made the planemaker famous.
While Ortberg’s age (64) is considered on the high side by financial analysts, his solid reputation makes the appointment “a strong and safe pick,” according to analyst Ken Herbert of RBC Capital Markets, quoted in the Reuters story. The news gave Boeing stock a 1.4% bump in today’s trading, despite news of greater-than-expected $1.4 billion in losses during the second quarter.
Reacting to the hiring, Ortberg said, “Boeing has a tremendous and rich history as a leader and pioneer in our industry, and I’m committed to working together with the more than 170,000 dedicated employees of the company to continue that tradition, with safety and quality at the forefront. There is much work to be done, and I’m looking forward to getting started.”
