A new chief executive takes the helm at Boeing on Thursday and plans to visit the factory near Seattle that has become the center of the aerospace giant’s troubles.
Robert “Kelly” Ortberg takes over a loss-making company that has agreed to plead guilty to conspiracy to commit fraud, is struggling to fix its aircraft manufacturing process, and cannot bring two astronauts home from the International Space Station due to flaws in the one spacecraft it built. for NASA.
“I’m excited to dig deeper!” Ortberg told employees on his first day on the job.
Boeing announced the selection of Ortberg just over a week ago, on the same day it recorded another huge loss; more than $1.4 billion in the second quarter, which was marked by a sharp drop in new plane deliveries, including the 737 Max.
The National Transportation Safety Board just wrapped up a two-day hearing into the 737 Max, which suffered an explosion in a panel on the side of the plane during an Alaska Airlines flight in January. Board investigators interviewed workers at the 737 factory in Renton, Washington, who they say are under a lot of pressure to produce planes quickly, which leads to errors.
During the hearing, a manager at the Federal Aviation Administration said the regulator 16 open execution cases against Boeing – three or four times the normal number – and half started since the door explosion.
Ortberg will try to fix Boeing after the last two CEOs failed.
Dennis Muilenburg, a perpetual Boeing, was fired in 2020 when the company was trying to convince regulators to allow Max jets to fly again after crashes in 2018 and 2019 that killed 346 people. David Calhoun, a longtime Boeing board member and General Electric executive, got the redesigned Max back in the air but has been unable to stem losses that now exceed $25 billion since the start of 2019. Calhoun announced in March that he would resign.
In a memo to employees on Thursday, Ortberg said: “While we clearly have a lot of work to do to restore trust, I am confident that, working together, we will return the company to being the industry leader we all hope for.”
Boeing is a century-old aviation innovator with roots in Seattle, although its headquarters moved to Chicago and then to the Washington, D.C. area. The new CEO is planting a symbolic flag in the Pacific Northwest.
“Because what we do is complex, I firmly believe we need to get closer to production lines and development programs across the company,” Ortberg told employees. “I plan to be based in Seattle so I can be close to the commercial airplane programs. In fact, I’ll be at the factory in Renton today, talking to employees and learning about the challenges we need to overcome, while also reviewing our safety and quality plans.”
The company declined to make Ortberg available for interviews.
Ortberg’s name came up relatively late in the CEO search. Boeing President Steven Mollenkopf, who led the research, said Ortberg has a reputation for running complex engineering and manufacturing companies.
Analysts have also been generally supportive. Richard Aboulafia, a longtime industry analyst and consultant, said Ortberg is deeply respected “and brings more hope for a better future than the company has enjoyed in decades.”
One of Ortberg’s main duties will be to fix the manufacturing process and increase production of the Max jets, Boeing’s best-selling plane. The FAA has limited Boeing to 38 per month since shortly after the Alaska Airlines explosion, but Boeing’s top safety official said this week that production isn’t that high — it’s in the low 20s per month.
Calhoun finished one job before Ortberg took over: the company reached a settlement with the Justice Department last month to plead guilty to conspiracy to commit fraud in connection with the Max development. A federal judge in Texas will decide whether to approve the settlement, which includes a fine of at least $244 million. Boeing will invest at least $455 million in quality and safety compliance programs.
Boeing’s space and defense unit is also struggling. It lost $913 million in the second quarter due to setbacks in fixed-price government contracts, including a deal to build two new Air Force One presidential jets.
