Boeing announced on Wednesday the appointment of Kelly Ortberg, a seasoned aerospace industry executive, as its new president and CEO following an extensive search. Ortberg, who previously held a top position at Rockwell Collins, is tasked with the significant challenge of reviving the troubled aircraft manufacturer. At 64, he will assume his role on August 8, addressing critical issues such as restoring jet production and rebuilding confidence among regulators, the industry, and the public. The company's shares saw a 2.9 percent increase prior to the market opening.
Boeing, one of the world's two major aircraft manufacturers, has faced a severe crisis in reputation and safety since a mid-air incident involving an Alaska Airlines-operated MAX 9 jet on January 5. This event, which led to a $1.4 billion loss in the second quarter, resulted in the resignation of CEO Dave Calhoun and the exit of the previous board president. The U.S. Federal Aviation Administration (FAA) subsequently restricted Boeing's production expansion of the 737 MAX series, requiring a comprehensive plan to rectify quality-control issues, which Boeing submitted in May.
Ortberg, a mechanical engineer with over 30 years in aerospace and defense, notably led Rockwell Collins through its merger with United Technologies and RTX before retiring from RTX in 2021. Analysts at Jefferies praised his leadership style and negotiation skills, highlighting his ability to manage diverse customer and supplier relationships. He edged out Patrick Shanahan, former CEO of Spirit Aero, for the top position at Boeing.
During the second quarter, Boeing's aircraft deliveries fell by 32 percent year-over-year, contributing to a loss of $2.33 per share. The company's Defence, Space and Security unit has faced significant financial losses due to cost overruns on fixed-price contracts, prompting a strategic shift away from such contracts to mitigate further losses. Boeing's CFO projected continued cash burn in 2024 due to lower jet deliveries.
