Boeing names new CEO as it posts a loss of more than $1.4 billion in second quarter

Boeing lost more than $1.4 billion in the second quarter and said a longtime industry executive will take over as chief executive of the troubled aircraft manufacturer next week.

Robert “Kelly” Ortberg, 64, a former CEO at aerospace supplier Rockwell Collins, will succeed David Calhoun as CEO starting Aug. 8, the company said.

But Rep. Rick Larsen, who represents Washington’s 2nd congressional district, said in a statement Wednesday morning that Ortberg “has his work cut out for him.”

“I look forward to meeting Mr. Ortberg soon, but that is not as important as focusing on Boeing returning to the top of its game,” Larsen said. (Read the full statement at the bottom of this story.)

Ortberg will also serve on Boeing’s Board of Directors.

Earlier this year, Calhoun announced he would retire from the company. He served as president and CEO since January 2020, and was a member of Boeing’s Board of Directors since 2009.

“The Board conducted a thorough and extensive search process over the last several months to select the next CEO of Boeing and Kelly has the right skills and experience to lead Boeing in its next chapter,” said Steven Mollenkopf, Chair of the Board. “Kelly is an experienced leader who is deeply respected in the aerospace industry, with a well-earned reputation for building strong teams and running complex engineering and manufacturing companies. We look forward to working with him as he leads Boeing through this consequential period in its long history.”

Shares rose more than 2% before the opening bell Wednesday.

Boeing’s loss was wider and revenue lower than Wall Street expected. Revenue fell 15% from a year earlier, and both its commercial-airplanes business and defense unit lost money.

The disappointing results come at a tumultuous time for Boeing. The company agreed to plead guilty to fraud in connection with the Max, two of which crashed, killing 346 people. The Federal Aviation Administration has increased its oversight of the company following mistakes including the blowout of a panel on an Alaska Airlines jet. It is pushing back against whistleblower allegations of manufacturing shortcuts that crimp on safety.

The company is dealing with supply-chain problems that are hindering production, which it hopes to fix in part by re-acquiring Spirit AeroSystems, a key contractor. It is still trying to persuade regulators to approve two new models of the Max and a bigger version of its two-aisle 777 jetliner. And it faces a multi-billion-dollar decision on when to design a new single-aisle plane to replace the Max.

Ortberg emerged as a leading candidate only recently. Others who were reportedly considered for the job included Patrick Shanahan, a former Boeing executive and now CEO of its most important supplier, Spirit AeroSystems, and another longtime Boeing executive, Stephanie Pope, who recently took over the commercial-airplanes division.

Chairman Steven Mollenkopf said Ortberg was chosen after “a thorough and extensive search process” and “has the right skills and experience to lead Boeing in its next chapter.”

Mollenkopf said Ortberg has earned a reputation for running complex engineering and manufacturing companies.

Rep. Rick Larsen (D-Everett) released a statement on Boeing’s new president & CEO Wednesday morning.

Larsen is the lead Democrat on the Transportation & Infrastructure Committee:

“I am encouraged about the announcement of Kelly Ortberg as the new President and CEO of The Boeing Company. Mr. Ortberg is a mechanical engineer. I hope that means he will ensure that his top message for everyone is building the best airplane means building the safest airplane in the world.

“But Mr. Ortberg has his work cut out for him.

“First, he has to ensure a continued commitment to the safety and quality plan that is Boeing’s pathway to earning the trust and confidence of the traveling public.

“Second, he needs to listen to the women and men of the Machinists Union in the current labor negotiations to ensure they are compensated for their work and treated well for carrying much of the burden for the company over the last several years.

“Finally, Boeing needs to complete the acquisition of Spirit AeroSystems, bringing back a key part of its supply chain into the company.

“I look forward to meeting Mr. Ortberg soon, but that is not as important as focusing on Boeing returning to the top of its game.”

©2024 Cox Media Group