Boeing has appointed Robert “Kelly” Ortberg as its new president and CEO, hoping to steer the troubled planemaker out of a financial crisis that has seen significant losses linked to its 737 Max 9 aircraft. Ortberg, a seasoned aerospace industry veteran who previously led Rockwell Collins before its merger with RTX, will take on his new role starting August 8.
Boeing’s chairman, Steven Mollenkopf, highlighted the extensive search process undertaken to find the right leader for the company. “Kelly has the right skills and experience to lead Boeing in its next chapter,” Mollenkopf said in a statement.
The company recently reported a $1.4 billion loss, exacerbated by problems in its defense and space division. This unit, one of Boeing’s three main business areas, has faced severe financial strain due to cost overruns on fixed-price contracts. Historically, these contracts offered high margins but left Boeing vulnerable to inflation and cost increases. In response, Boeing plans to shift away from such contracts to mitigate further losses.
The company’s woes are compounded by production issues with the 737 Max 9, including a recent incident where a cabin panel blew off mid-flight. This led to a slowdown in production, regulatory scrutiny, and a management shake-up. The U.S. aviation regulator has imposed a cap of 38 737 Max jets per month, though reports suggest Boeing has sometimes produced even fewer, affecting customer deliveries.
Boeing CFO Brian West has indicated that the company will burn cash rather than generate it in 2024, partly due to a reduction in jet deliveries. In the second quarter, Boeing delivered only 92 aircraft, a 32% decrease from the previous year, further compounding its challenges.
