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Boeing’s new CEO Kelly Ortberg relocates to Seattle amid planemaker’s safety crisis – Spirit AeroSystems Hldgs (NYSE:SPR), Boeing (NYSE:BA)


Boeing’s new CEO Kelly Ortberg relocates to Seattle amid planemaker’s safety crisis – Spirit AeroSystems Hldgs (NYSE:SPR), Boeing (NYSE:BA)

The newly appointed CEO of Boeing BA, Kelly Ortberghas decided to relocate to Seattle, the company’s original headquarters, to address the ongoing security crisis.

What happened: Ortberg’s move from Boeing’s Washington DC headquarters to Puget Sound, Washington, follows criticism that the company has lost touch with its manufacturing roots, sparked by an incident in January when a door stopper on a 737 MAX jet fell off in mid-flight because screws were missing, Reuters reported on Friday.

On his first day, Ortberg, the former head of an aerospace company, Rockwell Collins, spent time at the Renton plant where the 737 MAX jet is manufactured. He stressed the importance of “getting closer to the production lines and development programs across the company,” he explained in a letter to employees.

Ortberg’s challenges include increasing production of MAX jets from about 25 to 38 aircraft per month by year’s end, negotiating a labor agreement to avert a possible strike and resolving supply chain issues that have led to delivery delays. Aviation industry executives have urged Ortberg to prioritize on-time aircraft deliveries.

The National Transportation Safety Board (NTSB) has criticized Boeing for ignoring repeated warnings about unauthorized production. NTSB Chairman Jennifer Homendy said an investigation into the flight would likely be completed early next year.

See also: Tesla CEO Elon Musk reiterates the need to make the Cybertruck cheaper: “It’s a great truck. We need to make it more affordable.”

Ortberg plans to visit employees of Boeing’s most important supplier, Spirit AeroSystems SPnext week in Wichita, Kansas. Boeing has agreed to buy back the financially troubled Spirit for $4.7 billion in stock.

In a message to employees, Ortberg stressed that “restoring trust begins with fulfilling our commitments,” whether it be building safe commercial aircraft or delivering defense and space products.

Why it is important: Ortberg’s appointment as CEO came after Boeing reported a 15% year-over-year revenue decline to $16.866 billion, below the company’s forecast of $17.23 billion. The move is seen as a step toward addressing the safety issues plaguing the company.

Boeing and Spirit AeroSystems executives testified at a hearing on the Boeing 737-9 MAX accident in January. That incident had a number of consequences for Boeing, including a temporary grounding of the MAX 9, a production halt by the Federal Aviation Administration (FAA), a criminal investigation and the resignation of several key executives.

In response to the incident, Boeing announced plans to implement design changes to prevent future in-flight cabin element explosions.

Price promotion: According to Benzinga Pro, Boeing traded 0.25% higher at $169.30 in premarket trading on Friday after closing at $168.87 on Thursday.

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This story was created with Benzinga Neuro and edited by Pooja Rajkumari

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