Aerospace veteran Robert “Kelly” Ortberg becomes Boeing new CEO on Thursday with a singular mission: restoring the reputation of a U.S. manufacturing icon. Boeing’s new CEO said on Thursday he would be based in the planemaker’s birthplace Seattle, moving closer to the factory floor to rein in a safety crisis.
(Image Credit: boeing)
Boeing CEO Kelly Ortberg confirmation of earlier reports that he would move to Puget Sound, Washington, rather than Boeing’s corporate headquarters in Washington D.C.. This follows months of pressure on the company to reconnect with its industrial roots after missing bolts led to a door plug falling off a 737 MAX jet in mid-air in January.
Boeing’s production strategy
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.
Boeing leadership changes
Boeing leadership changes with Ortberg, shall be displayed from his first day itself. Ortberg, 64, will spend part of Thursday, his first day on the job, meeting workers who produce the company’s strong-selling 737 MAX jet at a factory in the Seattle suburb Renton, as he faces the steep task of “restoring trust,” according to a message to employees.
(Image Credit: boeing)
“Because what we do is complex, I firmly believe that we need to get closer to the production lines and development programs across the company,” he wrote in the letter.
Boeing is bleeding cash and beset by problems expected to take years to fix. MAX production and deliveries have slowed following the Jan. 5 mid-air panel blowout on a near-new model, while output of the 787 Dreamliner is now less than five per month due to supply-chain problems.
Boeing new CEO’s agenda
Ortberg’s to-do list includes boosting output of MAX jets from about 25 to 38 planes a month by year-end and securing a labor deal to avoid a possible strike this year.
Airline industry executives, while optimistic about Ortberg, are urging him to prioritize plane deliveries, after delays undermined carriers’ planning.
“When I meet him and I ask him one thing, it’s going to be: ‘please deliver my planes on time’,” Etihad Airways CEO Antonoaldo Neves told The National.
NTSB chair Jennifer Homendy said the independent safety agency would like to complete a probe into the flight by early next year.
Boeing’s key supplier Spirit AeroSystems
Ortberg also plans to visit employees at Boeing’s key supplier Spirit AeroSystems in Wichita, Kansas, next week, according to officials from both companies. Boeing has agreed to buy back cash-strapped Spirit, whose core plants it spun off in 2005, for $4.7 billion in stock.
U.S. Senator Jerry Moran will join Ortberg and Boeing chairman Steve Mollenkopf at Spirit, a spokesperson for the Kansas Republican said.
Spirit Aero spokesperson Joe Buccino said the high-profile visit would showcase the company’s commercial and defense operations.
In the message to employees, Ortberg reminded workers that “people’s lives depend on what we do every day.”
Boeing CEO’s aim is trust restoration
On Wednesday, NASA said Boeing’s Starliner astronauts, delivered in June to the International Space Station, could return on a SpaceX capsule in February 2025 if Starliner is still deemed unsafe to return to Earth.
The astronauts’ test mission, initially expected to last about eight days on the station, has been drawn out by issues on Starliner’s propulsion system that have called into question the spacecraft’s ability to safely return them to Earth as planned.
“Restoring trust starts with meeting our commitments – whether that’s building high-quality, safe commercial aircraft, (or) delivering on defense and space products that allow our customers to meet their mission,” the new CEO of Boeing, Ortberg said.
Ortberg, in his letter, acknowledged Boeing needs to do better.
“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,” he said.
