Boeing has appointed Kelly Ortberg as its new CEO, effective August 8, following a significant core operating loss of $1.4 billion in the second quarter of 2023. This loss is more than triple the amount reported in the same period last year, highlighting the ongoing challenges the company faces in achieving profitability amidst increased scrutiny over its safety and quality standards. Ortberg, who previously served as CEO of Rockwell Collins, brings a wealth of experience in engineering and management, which may help address the issues that have plagued Boeing, particularly those related to the troubled 737 Max airliner, which has been linked to two fatal crashes that killed 346 people. Under Ortberg's leadership, Boeing aims to prioritize safety and quality, essential elements in restoring public trust and regulatory confidence.
Despite the change in leadership, Boeing's path to recovery remains fraught with challenges. The company has reported a staggering total of $33.3 billion in core operating losses since 2019, and its struggles extend beyond the 737 Max issues. The defense sector has also seen significant losses, and recent operational setbacks, including problems with the Starliner spacecraft, have compounded the company's difficulties. Ortberg's immediate focus will be on convincing regulators that Boeing has adequately addressed its safety and quality concerns, which are critical for the company's future profitability. The aviation giant has already faced legal repercussions, including a plea agreement related to defrauding the Federal Aviation Administration (FAA) during the 737 Max certification process, and will operate under court supervision as part of this agreement.
- The appointment of Kelly Ortberg comes at a crucial time for Boeing, as the company has not reported a profitable year since 2019. The financial results released alongside the CEO announcement indicate a significant decline in commercial aviation deliveries and ongoing losses in the defense sector. Ortberg's engineering background may provide a fresh perspective on the company's operations, which have been criticized for prioritizing financial performance over quality and safety.
- Boeing's challenges are not limited to the 737 Max. The company has faced scrutiny over its defense contracts, including a recent loss of $913 million in its defense, space, and security unit. Additionally, the ongoing issues with the Starliner spacecraft and the costly Air Force One project have further strained Boeing's financial health. As Ortberg steps into his new role, he will need to navigate these complexities while rebuilding the company's reputation and ensuring the safety of its aircraft.
