Boeing CEO Kelly Ortberg Marks Successful First Year Amid Challenges
Boeing’s CEO, Kelly Ortberg, has received accolades from aerospace analysts and airline clients after a year in his role. He returned to Boeing last August, stepping out of retirement to lead the company during a tumultuous period.
When Ortberg took charge, Boeing was facing significant issues, including a major incident in January 2024 when a panel detached from a Boeing 737 Max 9, causing a hole in the aircraft. This came at a time when the company was trying to bounce back from the setbacks of the COVID-19 pandemic and the negative impact of two tragic crashes involving the Max model in 2018 and 2019.
At the start of his tenure, the company was experiencing slowed production, and 33,000 machinists at Boeing’s factories in Puget Sound were preparing to strike. However, analysts have noted Ortberg’s swift actions to stabilize the company. John Plueger, head of Air Lease, praised Ortberg’s ability to boost confidence in both the company and the airline industry.
Ortberg’s appointment sparked hope among analysts, who saw him as an ideal blend of fresh ideas and deep industry knowledge. He was viewed as an outsider with considerable experience in the aerospace sector from his time at Rockwell Collins.
A Positive Direction
One year in, while Boeing still faces challenges, analysts believe Ortberg has set a promising course for the company. Adam Pilarski, president of Avitas, stated that Ortberg’s selection was a perfect choice and expressed satisfaction with the progress made.
Starting his career as an engineer in 1983, Ortberg worked his way up in the aerospace industry. He took on various leadership roles, leading Rockwell Collins through integration efforts before retiring in 2021.
Ann McKenna, dean at Ortberg’s alma mater, The University of Iowa, mentioned that those familiar with Ortberg were not surprised he took on the Boeing role despite the prevailing challenges.
In his first year, Ortberg successfully resolved the machinists’ strike, allowed Puget Sound factories to resume production, and raised $21 billion through an expanded share sale. He also announced significant layoffs aimed at refocusing on core business areas.
Throughout the year, Ortberg ramped up the production of the Boeing 737 Max, reaching the maximum production rate allowed by the FAA. Though the FAA’s restrictions remain, Ortberg expressed optimism about pushing beyond these limits soon.
Boeing reported a significant reduction in its losses for the second quarter, with a net loss of $612 million, down from $1.4 billion during the same period the previous year. In its defense sector, Ortberg’s tenure began with a recovery, avoiding write-offs from fixed-price government contracts, which had plagued the company previously.
In March, Boeing secured a contract for the U.S. Air Force’s next-generation fighter jet, the F-47, reinforcing its position in the defense area.
Fostering a New Culture
Working from Seattle, Ortberg seems to have prioritized employee engagement and safety, which George Ferguson of Bloomberg Intelligence noted as pivotal in restoring morale and ensuring high-quality production.
Plueger observed improvements in Boeing’s product quality, with timely deliveries and fewer minor issues compared to pre-2018 concerns. Analysts believe Ortberg’s approach has shifted the company’s focus on quality beyond mere regulatory compliance.
Despite challenges such as tariffs imposed by former President Donald Trump, which affected global buyers and suppliers, Boeing has begun securing exemptions and receiving substantial orders from international clients.
Tragedy struck in June when a Boeing 787 crashed in Ahmedabad, India, resulting in a substantial loss of life. Analysts remarked on Ortberg’s handling of this difficult situation with care and communication.
Looking Ahead
Reflecting on his first year, Ortberg told investors that while there is progress, more work remains. He emphasized the need for organization and direction within the company.
For the upcoming year, Ortberg’s agenda includes addressing a work stoppage at the defense factories in St. Louis, increasing production of the 737 Max, securing FAA certification for new aircraft models, and continuing the acquisition of supplier Spirit AeroSystems.
Pilarski highlighted Ortberg’s grounded approach, noting that while challenges persist, the company is moving in a positive direction. “He didn’t promise miracles,” Pilarski said, “but he has stopped the bleeding and is steering the company forward.”
