New Boeing chief to get struggling U.S. aircraft maker back on track
Boeing is currently under intense pressure due to allegations of safety flaws in its aircraft. The most recent incident causing a stir was in January when a cabin door cover fell off a 737 MAX 9 from Alaska Airlines during flight, forcing it to make an emergency landing.
Financially, the aerospace giant is also struggling to recover from the aftermath of two fatal crashes involving Boeing aircraft in 2018 and 2019, as well as the impact of the COVID-19 pandemic on the airline industry. The appointment of Ortberg as the successor to outgoing CEO Dave Calhoun was announced on July 31, the same day that Boeing's Airbus rival reported a significant loss of over $1.4 billion for the second quarter.
Ortberg, who is returning from retirement to take over from the 67-year-old Calhoun, has extensive experience as an aviation manager. He has worked in the industry for over 35 years and has led companies like Collins Aerospace, now a subsidiary of RTX, through several mergers and acquisitions.
Aviation experts noted that Ortberg's appointment brings an outsider perspective to Boeing. "We see Kelly Ortberg as a gain for Boeing," wrote analysts from Melius Research. He has "a technical background" and "experience leading a publicly traded company." Additionally, Ortberg has "decades of experience in the aerospace industry" and is "an outsider who could bring a new approach to solving Boeing's problems."
The most pressing issue for Ortberg will likely be restoring production quality. Boeing has already created a plan for this at the request of the U.S. Federal Aviation Administration (FAA). To meet the necessary quality standards, Boeing is also considering reintegrating Spirit AeroSystems, a supplier that was spun off in 2005, for $4.7 billion.
Ortberg's decision to work from Seattle, Washington, where Boeing was founded and where the assembly lines for the 737 and 777 are located, may also work in his favor. The International Association of Machinists and Aerospace Workers (IAM) District 751, which represents over 30,000 Boeing employees in the Seattle area, has already praised Ortberg's decision to live in the city as "a step in the right direction."
The support of the union is important as Boeing is currently negotiating its next labor contract, which is set to take effect in September. The union has already authorized strike action if an agreement is not reached by then.
Ortberg has not yet commented on his new role as Boeing's CEO, but he expressed in a statement that he is "extremely honored and humbled" to join this "iconic company." The outgoing CEO Calhoun will remain as a special advisor to Boeing's board until March 2025.
The newly appointed CEO of Boeing, Kelly Ortberg, has significant experience in the aviation industry, having previously led Collins Aerospace during its mergers and acquisitions. Despite flying with Alaska Airlines, where a cabin door cover fell off a 737 MAX 9 during flight, Boeing continues to face financial challenges.
