Boeing’s new outsider CEO Ortberg takes the helm, this time from the factory floor

Aerospace
veteran
Robert
“Kelly”
Ortberg
becomes


Boeing‘s
new
CEO
on
Thursday
with
a
singular
mission:
restoring
the

reputation
of
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
to
customers
large
and
small;
and
stop
burning
cash.

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.

Ortberg’s
Day
1
activity
is
walking
the
floor
of
Boeing’s
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.

“I
can’t
tell
you
how
proud
and
excited
I
am
to
be
a
member
of
the
Boeing
team,”
he
said
in
a
note
to
staff
on
Thursday.
“While
we
clearly
have
a
lot
of
work
to
do
in
restoring
trust,
I’m
confident
that
working
together,
we
will
return
the
company
to
be
the
industry
leader
we
all
expect.”

Analysts
and
industry
insiders
are
cautiously
upbeat,
painting
the
64-year-old
Ortberg
—
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
—
as
a
good
listener
with
an
engineering
background
(he
has
a
mechanical
engineering
degree).
Perhaps
most
importantly,
he
is
a
Boeing
outsider.

“This
guy
has
a
fantastic
reputation
and
level
of
experience
in
the
industry,”
said
Richard
Aboulafia,
managing
director
at
AeroDynamic
Advisory.
“He
has
a
reputation
for
listening
and
for
letting
people
push
back.”

Those
skills
will
be
key
as
Boeing
tries
to
stabilize
its
production
and
eliminate
manufacturing
flaws.

Boeing’s
top
safety
executive
for
commercial
aerospace
told
a

National
Transportation
Safety
Board
hearing
earlier
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.

The
hearing
was
part
of
the
NTSB’s
probe
of
the
midair
blowout
of
a
door
plug
from
a
packed,
monthsold
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.

Worker
testimony
at
the
NTSB
hearing
also
showed
manufacturing
pressure
and
frequent
fixes
on
planes,
putting
a
spotlight
on
Boeing’s
factories.

“I
will
be
transparent
with
you
every
step
of
the
way,
sharing
news
on
progress
as
well
as
where
we
must
do
things
better,”
Ortberg
said
in
the
memo.
He
vowed
to
share
reports
to
staff,
“giving
you
timely
updates
of
what
I’m
seeing
and
hearing
on
the
ground
from
our
teammates
and
our
stakeholders.”

Boeing
last
month

agreed
to
plead
guilty
to
defrauding
the
U.S.
government
during
the
Max
certification,
a
deal
that
will
require
an
independent
corporate
monitor
at
the
company
for
three
years.

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.

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’s
misfiring
Starliner
capsule,
which
launched
in
early
June,
has

NASA
debating
whether
to
use
SpaceX
instead
to
bring
astronauts
Butch
Wilmore
and
Suni
Williams
back
from
the
International
Space
Station.

And
on
Thursday,
NASA’s
Inspector
General

released
an
audit
of
the
agency’s
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
“ineffective
quality
management
and
inexperienced
workforce,
continued
cost
increases
and
schedule
delays,
and
the
delayed
establishment
of
a
cost
and
schedule
baseline.”

A
decision
is
also
looming
over
whether
to
launch
a
new
aircraft
as
Boeing
loses
ground
to
rival
Airbus.

The
first
100
days
of
Ortberg’s
time
as
CEO
will
be
crucial,
said
Bank
of
America
aerospace
analyst
Ron
Epstein.

“The
decisions
made
early
in
his
tenure
will
have
generational
impacts
on
the
company,”
he
said
in
a
note
Monday.

Ortberg
and
his
team
will
need
to
ensure
Boeing’s
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,

members
authorized
a
strike
if
a
deal
isn’t
reached
this
September.

“The
principles
of
safety
and
quality
should
be
equally
important
as
the
manufacturing
rates,”
Jon
Holden,
local
president
of
the
International
Association
of
Machinists
and
Aerospace Workers,
said
in
a
statement
last
week.
“This
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.”

Last
week,
alongside

another
quarterly
loss,
Boeing
announced

Ortberg
would
succeed
Dave
Calhoun,
who
had
said
in
March
he
would

step
down
by
year’s
end.

That
was
part
of
a
larger
executive
shake-up
after
the
door
plug
blowout.
Calhoun
himself

took
over
a
Boeing
in
crisis
in
early
2020,
replacing
Dennis
Muilenburg,
who
was
ousted
for
his
handling
of
the
two
Max
crashes.

While
Boeing
is
still
based
in
Arlington,
Virginia
—
where
it
announced
it
would

move
its
headquarters
in
2022
from
Chicago
—
Ortberg
will
be
based
in
the
Seattle
area,
giving
him
a
close
eye
on
where
the
majority
of
Boeing’s
commercial
jetliner
production
is
based.

“In
speaking
with
our
customers
and
industry
partners
leading
up
to
today,
I
can
tell
you
that
without
exception,
everyone
wants
us
to
succeed,”
Otberg
said
in
his
Day
1
note
to
employees.
“In
many
cases,
they
NEED
us
to
succeed. This
is
a
great
foundation
for
us
to
build
upon.”

Getting
off
on
the
right
foot
with
customers
and
the
hundreds
of
suppliers
that
are
struggling
from

pandemic-demand
whiplash
is
important
for
Ortberg
and
the
company.
Boeing’s
relationships
with
its
bread-and-butter
customers
has
suffered
recently,
and
its
leadership
shake-up
came
after
airline
CEOs
sought
a
meeting
with
the
company’s
board
as
delays
of
aircraft
piled
up
in
the
wake
of
the
door
plug
blowout.

Southwest
Airlines
is
among
Boeing’s
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’s
CEO
hinted
at
the
big
feat
Ortberg
has
ahead
of
him.

“We
look
forward
to
working
with
Kelly
Ortberg
in
his
efforts
to
return
Boeing
to
its
place
as
the
leading
American
aerospace
company,”
CEO
Bob
Jordan
said
in
a
written
statement.
“A
strong
Boeing
is
great
for
Southwest
Airlines
and
it’s
great
for
our
industry.”

—
CNBC’s
Michael
Sheetz
contributed
to
this
article.