Boeing (BA) Max 737" width="970" height="647" data-caption='Boeing’s current CEO announced plans to retire following a 737 Max incident in January. <span class="media-credit">Kevin Carter/Getty Images</span>'>
Amid a slew of quality control issues, slowed production, and crumbling trust amongst regulators and the public, 2024 hasn’t been Boeing’s year. Now, the aerospace company is hoping Robert “Kelly” Ortberg, an industry veteran who will step up as its new CEO and president on Aug. 8, can turn the company’s future around. Ortberg will succeed Dave Calhoun, who announced plans to retire earlier this year following a January incident where the door plug of a Boeing 737 Max flight blew off midair. The near-catastrophe exacerbated troubles at the aircraft maker, which has not posted an annual profit in five years. Today (July 31), it reported a massive core operating loss of $1.4 billion for the April-June quarter, 250 percent larger than last year. Quarterly revenue came in at $16.9 billion. Both earnings numbers fell short of Wall Street estimates.
Ortberg, 64, is originally from Dubuque, Iowa and studied mechanical engineering in college—a fact that will likely please the critics and airline leaders who say Boeing leadership should emphasize engineering over finance. While Calhoun’s background is in business and accounting, his predecessor, Dennis Muilenburg, studied aerospace engineering but was still fired following two fatal 737 Max crashes in 2018 and 2019. Boeing recently pled guilty to misleading regulators who approved the 737 Max ahead of the crashes.
In addition to his engineering chops, Ortberg has more than three decades of experience as an aerospace executive. Starting in the early 1980s as an engineer at semiconductor company Texas Instruments, he joined the aerospace company Rockwell Collins in 1987 and eventually became its CEO in 2013. He notably oversaw its 2018 integration with United Technologies. He stayed at the merged company to run its aerospace unit and act as a special advisor to then-CEO Greg Hayes before retiring in 2021.
Ortberg will be based in Seattle, according to the Seattle Times, which cited a source familiar with the matter. The decision could point to a potential location shift for the company. While Boeing was initially established in Seattle more than a century ago, it has been based in Arlington, Va. for the past two years.
The company will also waive its mandatory retirement age of 65 for Ortberg, as it did for Calhoun. Age shouldn’t be a concern for Ortberg, who “looks like he’s in his late 40s and possesses high energy,” said Kevin Michaels, the founder of aerospace consultant AeroDynamic Advisory, who previously worked with Ortberg at Rockwell Collins, in a LinkedIn post. “He has a deep understanding of aerospace. And he’s willing to take decisive action.”
Following January’s 737 Max incident, the U.S. Federal Aviation Administration blocked Boeing from raising its monthly production of the aircraft above 38 units. This production cap has impacted the company’s commercial division, which lost $715 million during the quarter. Its defense, space and security division, which is currently dealing with a troubled Starliner spacecraft and facing challenges in building two Air Force One aircraft, lost $913 million. However, a third Boeing division focused on repairs and part supply was profitable, bringing in $870 million over the past three months. (Boeing recorded a $634 million loss from other operations.)
Ortberg is committed to putting “safety and quality at the forefront,” said the incoming CEO in a statement. “There is much work to be done, and I’m looking forward to getting started.”
