Boeing appoints aerospace veteran Kelly Ortberg as CEO to lead turnaround

Boeing selected aerospace industry veteran Kelly Ortberg as CEO on Wednesday, aiming to turn around the faltering planemaker after losing more than $1 billion in the previous quarter.


Ortberg will begin on August 8 with the huge task of rebuilding trust with regulators, the industry, and the public amid a quality crisis, as its finance chief warned it would continue to lose funds.

Boeing has been embroiled in a reputational and safety crisis since a mid-air cabin panel burst on an Alaska Airlines-operated MAX 9 jet with 171 passengers on January 5.

According to LSEG data, the planemaker lost $1.4 billion on $16.9 billion in revenue, falling short of analyst expectations of $17.2 billion. It lost $2.90 per share, falling short of the expected loss of $1.97.

Boeing CFO Brian West said on an investor call on Wednesday that he anticipates cash usage in 2024 to be higher than previously estimated and cash burn in the third quarter. The company’s free cash flow was $4.33 billion.

Despite the company’s challenges throughout its industries, including military and space, the CEO appointment boosted shares by 4.4% in relief trading. Ortberg will also have to increase production of the company’s best-selling 737 jets from around 25 in June and July to 38 by the end of the year.

The company’s problems prompted a managerial shift, with CEO Dave Calhoun deciding to step down by the end of the year and board chair Larry Kellner announcing he would not run for re-election.

Calhoun told analysts that he did not believe Ortberg’s arrival would result in a major leadership turnover at Boeing. Stephanie Pope, the head of Boeing Commercial Airplanes, was considered a likely successor to Calhoun.

“My guess is he’s going to put his arms around Stephanie and the rest of the team in a big way and just try to support their work,” he told the analysts.


Boeing chairman Steve Mollenkopf announced on Wednesday that Calhoun will serve as a special advisor to the board until March 2025.

Shortly after the January accident, the United States Federal Aviation Administration (FAA) prohibited Boeing from increasing the production of its cash-cow 737 MAX series of jets over 38 per month, without specifying how long the restriction would remain.

West confirmed a Reuters claim that Boeing has been producing airplanes at a significantly lower level for several weeks in order to close quality gaps.

Wall Street celebrates appointment.

Ortberg, a mechanical engineer, is 64 years old and has worked in aerospace and military for almost 30 years, including several management positions.

“There is much work to be done, and I’m looking forward to getting started,” Ortberg said in a statement after Boeing waived his obligatory retirement age of 65 years.

After managing Rockwell Collins for five years, he oversaw the company’s merger with United Technologies and RTX until his retirement in 2021.

“This is a powerful and safe choice. We understand that Ortberg’s age may be higher than some investors would want to see. However, we feel Ortberg’s reputation at Rockwell Collins and United Technologies/RTX is solid,” RBC Capital Markets analyst Ken Herbert wrote in a note.

Ortberg’s experience integrating acquisitions, such as guiding Collins through a $8.3 billion purchase of BE Aerospace in 2016, will be put to the test again at Boeing.


Following a deal to purchase back Spirit AeroSystems earlier this year, the planemaker is attempting to bring the fuselage manufacturer into its fold.

His selection also answers the industry’s request to hire an outsider to steer Boeing out of difficulty. He was picked over Patrick Shanahan, the former CEO of Spirit Aero, who was regarded as the front-runner to succeed Calhoun by several analysts and investors. Boeing plans to acquire the company.

Defense business difficulties

Boeing shipped 92 airplanes in the second quarter, a 32% decrease from the same period previous year. It reported a $2.33 per share loss as its ailing defense and space businesses added to the company’s financial hardship.

The Defense, Space, and Security segment, one of Boeing’s three core businesses, lost billions of dollars in 2023 and 2022, executives said, due to cost overruns on fixed-price contracts.

Such contracts offer strong margins, but they make defense contractors exposed to inflationary pressures, which have harmed US business earnings in recent years.

Prior to the pandemic, the planemaker actively bid for fixed-price contracts, but it has since stated that it will shift away from such contracts in order to reduce losses, which totaled $1.76 billion last year.