Aerospace veteran Robert \u201cKelly\u201d Ortberg becomes\u00a0Boeing\u2019s new CEO on Thursday with a singular mission: restoring the\u00a0reputation\u00a0of a U.S. manufacturing icon.<\/p>\n
That enormous goal will involve thousands of daily decisions that will determine whether Boeing can earn back the trust of regulators, airlines and the public; end persistent production defects; deliver aircraft on time and consistently to customers large and small; and stop burning cash.<\/p>\n
Boeing\u2019s new CEO, Robert \u2018Kelly\u2019 Ortberg.<\/span>Boeing via AFP \u2013 Getty Images<\/span><\/p>\n That cash burn is running about $8 billion so far this year and counting. Meanwhile, Boeing shares are down some 37% so far in 2024, as of Wednesday.<\/p>\n Ortberg\u2019s Day 1 activity is walking the floor of Boeing\u2019s factory in Renton, Washington, where it builds its bestselling but problematic 737 Max. He plans to talk with employees and review safety and quality plans, with similar visits ahead at other Boeing plants.<\/p>\n \u201cI can\u2019t tell you how proud and excited I am to be a member of the Boeing team,\u201d he said in a note to staff on Thursday. \u201cWhile we clearly have a lot of work to do in restoring trust, I\u2019m confident that working together, we will return the company to be the industry leader we all expect.\u201d<\/p>\n Analysts and industry insiders are cautiously upbeat, painting the 64-year-old Ortberg \u2014 a more than three-decade veteran of the industry who spent years atop commercial and defense supplier Rockwell Collins after working up the ranks there \u2014 as a good listener with an engineering background (he has a mechanical engineering degree). Perhaps most importantly, he is a Boeing outsider.<\/p>\n \u201cThis guy has a fantastic reputation and level of experience in the industry,\u201d said Richard Aboulafia, managing director at AeroDynamic Advisory. \u201cHe has a reputation for listening and for letting people push back.\u201d<\/p>\n Those skills will be key as Boeing tries to stabilize its production and eliminate manufacturing flaws.<\/p>\n Boeing\u2019s top safety executive for commercial aerospace told a\u00a0National Transportation Safety Board hearing\u00a0earlier this week that the company is working on a design fix so the near-catastrophic door plug blowout it faced at the beginning of the year never happens again.<\/p>\n The hearing was part of the NTSB\u2019s probe of the midair blowout of a door plug from a packed, months-old Boeing 737 Max 9 as it climbed out of Portland, Oregon. While no one was seriously injured in the accident, it put Boeing back into crisis mode just as it was trying to move on from two fatal crashes of its bestselling 737 Max planes in 2018 and 2019.<\/p>\n Worker testimony at the NTSB hearing also showed manufacturing pressure and frequent fixes on planes, putting a spotlight on Boeing\u2019s factories.<\/p>\n \u201cI will be transparent with you every step of the way, sharing news on progress as well as where we must do things better,\u201d Ortberg said in the memo. He vowed to share reports to staff, \u201cgiving you timely updates of what I\u2019m seeing and hearing on the ground from our teammates and our stakeholders.\u201d<\/p>\n Boeing last month\u00a0agreed to plead guilty\u00a0to defrauding the U.S. government during the Max certification, a deal that will require an independent corporate monitor at the company for three years.<\/p>\n But Ortberg will have to address issues not only in the commercial jet business, including the delayed certification of new 737 and 777 models, but also in its defense unit.<\/p>\n That segment of the business is facing issues with two 747s that will serve as the next Air Force One aircraft but are years behind schedule. Meanwhile, Boeing\u2019s misfiring Starliner capsule, which launched in early June, has\u00a0NASA debating\u00a0whether to use SpaceX instead to bring astronauts Butch Wilmore and Suni Williams back from the International Space Station.<\/p>\n And on Thursday, NASA\u2019s inspector general\u00a0released an audit\u00a0of the agency\u2019s Space Launch System rocket program, which is being built for moon missions and counts Boeing as a leading contractor. The NASA watchdog slammed Boeing for its \u201cineffective quality management and inexperienced workforce, continued cost increases and schedule delays, and the delayed establishment of a cost and schedule baseline.\u201d<\/p>\n A decision is also looming over whether to launch a new aircraft as Boeing loses ground to rival Airbus.<\/p>\n The first 100 days of Ortberg\u2019s time as CEO will be crucial, said Bank of America aerospace analyst Ron Epstein.<\/p>\n \u201cThe decisions made early in his tenure will have generational impacts on the company,\u201d he said in a note Monday.<\/p>\n Ortberg and his team will need to ensure Boeing\u2019s workforce is trained, with thousands of new workers in factories after more experienced staff members took buyouts or were laid off in the pandemic. A union representing some 30,000 Boeing factory workers in Washington state and Oregon is seeking more than 40% raises and, last month,\u00a0members authorized a strike\u00a0if a deal isn\u2019t reached this September.<\/p>\n \u201cThe principles of safety and quality should be equally important as the manufacturing rates,\u201d Jon Holden, local president of the International Association of Machinists and Aerospace\u00a0Workers, said in a statement last week. \u201cThis potential collaboration with the new CEO could be a prime opportunity for Boeing to prove its dedication to its workforce and acknowledge the exceptional manufacturing capability and capacity of skilled IAM Members on the shop floor.\u201d<\/p>\n Last week, alongside\u00a0another quarterly loss, Boeing announced\u00a0Ortberg would succeed Dave Calhoun, who had said in March he would\u00a0step down\u00a0by year\u2019s end.<\/p>\n That was part of a larger executive shake-up after the door plug blowout. Calhoun himself\u00a0took over\u00a0a Boeing in crisis in early 2020, replacing Dennis Muilenburg, who was ousted for his handling of the two Max crashes.<\/p>\n While Boeing is still based in Arlington, Virginia \u2014 where it announced it would\u00a0move its headquarters\u00a0in 2022 from Chicago \u2014 Ortberg will be based in the Seattle area, giving him a close eye on where the majority of Boeing\u2019s commercial jetliner production is based.<\/p>\n \u201cIn speaking with our customers and industry partners leading up to today, I can tell you that without exception, everyone wants us to succeed,\u201d Ortberg said in his Day 1 note to employees. \u201cIn many cases, they NEED us to succeed.\u00a0This is a great foundation for us to build upon.\u201d<\/p>\n Getting off on the right foot with customers and the hundreds of suppliers that are struggling from\u00a0pandemic-demand whiplash\u00a0is important for Ortberg and the company. Boeing\u2019s relationships with its bread-and-butter customers have suffered recently, and its leadership shake-up came after airline CEOs sought a meeting with the company\u2019s board as delays of aircraft piled up in the wake of the door plug blowout.<\/p>\n Southwest Airlines\u00a0is among Boeing\u2019s biggest customers and, like other carriers, has scaled back its growth plans, citing delivery delays of new, more fuel-efficient jets from Boeing. The airline\u2019s CEO hinted at the big feat Ortberg has ahead of him.<\/p>\n \u201cWe look forward to working with Kelly Ortberg in his efforts to return Boeing to its place as the leading American aerospace company,\u201d CEO Bob Jordan said in a written statement. \u201cA strong Boeing is great for Southwest Airlines and it\u2019s great for our industry.\u201d<\/p>\n \u2014 CNBC\u2019s Michael Sheetz contributed to this article.<\/em><\/p>\n<\/p>\n Aerospace veteran Robert \u201cKelly\u201d Ortberg becomes\u00a0Boeing\u2019s new CEO on Thursday with a singular mission: restoring the\u00a0reputation\u00a0of a U.S. manufacturing icon. That enormous goal will involve thousands of daily decisions that will determine whether Boeing can earn back the trust of regulators, airlines and the public; end persistent production defects; deliver aircraft on time and consistently […]<\/p>\n","protected":false},"author":0,"featured_media":7588,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-7587","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/7587","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=7587"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/7587\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/7588"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=7587"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=7587"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=7587"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}