Aviation experts and analysts are singing the praises of Kelly Ortberg, who is returning from early retirement on Thursday to take on the challenge of getting Boeing back on track after a series of quality and financial problems.
The appointment of 64-year-old Ortberg to succeed outgoing Boeing CEO Dave Calhoun was announced on July 31, the same day the U.S. aerospace giant reported a second-quarter loss of more than $1.4 billion.
“I am extremely honored and humbled to join this iconic company,” Ortberg said in a statement. He has not made any public comments since his appointment.
Calhoun, meanwhile, will remain a special advisor to Boeing’s board of directors until March 2025.
The aircraft manufacturer’s finances are struggling to recover from the effects of two fatal plane crashes in 2018 and 2019 and the Covid-19 pandemic.
But Dave Calhoun’s ouster, announced at the end of March, is the result of a series of quality and compliance problems in Boeing’s commercial aviation division.
“We view Kelly Ortberg as an asset to Boeing,” aviation experts Melius Research wrote in an analyst note, adding that his experience as CEO of Rockwell Collins – now an RTX subsidiary called Collins Aerospace – “checks many boxes.”
“He has an engineering background, experience running a publicly traded company, decades of experience in the aerospace industry and is a Boeing outsider, which should give him a fresh approach to solving Boeing’s problems,” they said.
Given his industry experience and his role as manager of a major supplier, Ortberg is “a positive hire,” wrote Angelo Zino, senior equity analyst at CFRA Research, in a note to clients.
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Ortberg’s most pressing concern is undoubtedly restoring Boeing’s production quality, which has been criticized in several audits. The company has already drawn up a roadmap for this, as requested by the US Federal Aviation Administration (FAA).
To achieve the required quality standards, Boeing will also regain control of Spirit AeroSystems, a company it spun off in 2005.
The $4.7 billion purchase, announced in early July, is expected to be completed by mid-2025.
The appointment of Ortberg, who began his career as an engineer at Texas Instruments in 1983, came after two long days of hearings convened by the National Transportation Safety Board (NTSB) as part of its investigation into a January flight incident involving a 737 MAX 9.
The consequences of the incident were a reshuffle of the management, a halt to 737 production by the FAA, the initiation of investigations and the reopening of criminal proceedings against the company.
These are just some of the problems Ortberg has to deal with.
Another factor in favor of the new CEO is that he wants to work from Seattle, the birthplace of Boeing, where the assembly lines for the 737 – the company’s flagship – and the 777 are located.
After years of delays, the new 777X generation also seems to be finally within reach of approval. The 737 MAX 7 and MAX 10, on the other hand, are still idling along.
The IAM District 751 union, which represents more than 30,000 Boeing employees in the Seattle area, called Ortberg’s decision to settle in the city “a step in the right direction.”
The union’s approval is important at a time when Boeing is currently negotiating its next collective bargaining agreement, which is set to take effect in September.
In the event that no agreement is reached by this date, the union has already approved strike action.
Another important issue for Boeing is the guilty plea announced on July 24 in the criminal case related to the plane crashes. The company is still waiting for the judge’s decision and for the initiation of civil proceedings.
Robert Clifford, a lawyer for the victims’ families, also reacted positively to Ortberg’s appointment, pointing to his “high reputation” and the fact that he does not come from within the company.
