Boeing Names New CEO Amidst Financial Losses and Scrutiny
Boeing announced Robert “Kelly” Ortberg as its new CEO, effective August 8, replacing David Calhoun. This leadership change comes as the company reports a substantial loss of over $1.4 billion in the second quarter, with significant declines in revenue and ongoing issues with safety, production, and legal matters.
Robert “Kelly” Ortberg, a veteran in the aerospace industry and former CEO of Rockwell Collins, will take over from David Calhoun. Calhoun, who had announced his retirement for the end of the year, will stay on as a special adviser until March 2025. Ortberg is expected to focus on stabilizing the company and advancing its recovery efforts.
Boeing posted a second-quarter loss of $1.44 billion, a stark increase from a $149 million loss the previous year. Revenue dropped by 15% to $16.87 billion, missing Wall Street’s forecast. The commercial airplanes division reported a 32% decrease in revenue and a $715 million operating loss.
The company continues to grapple with multiple challenges:
Safety and Legal Scrutiny: Boeing has pleaded guilty to federal fraud charges related to the 737 Max, following two crashes that resulted in 346 fatalities. Increased FAA oversight and recent incidents, including a blowout on an Alaska Airlines jet, have further impacted Boeing’s reputation.
Production and Supply Chain Problems: Boeing is facing supply chain disruptions and production challenges. The company aims to increase 737 Max production to 38 per month by year-end but has struggled to meet even limited FAA production caps.
Regulatory and Development Hurdles: The company is pushing for the approval of new Max models and a larger 777 variant. Additionally, it faces pressure to decide on developing a new single-aisle aircraft to replace the Max.
Ortberg’s immediate focus will be on collaborating with the FAA to meet production goals and address safety and quality issues. Boeing is also dealing with potential labor disputes, including a threatened strike by its largest union and a multi-billion-dollar decision on future aircraft design and development.
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