Boeing on Wednesday named aerospace industry veteran Robert “Kelly” Ortberg as its new president and CEO, tasking the former Rockwell Collins executive in turning around the struggling planemaker after it reported a $1.4bn loss.
Ortberg, 64, led aerospace supplier Rockwell Collins before it became part of aerospace and defence giant RTX. He will assume his duties on 8 August, Boeing said.
“The board conducted a thorough and extensive search process over the last several months to select the next CEO of Boeing and Kelly has the right skills and experience to lead Boeing in its next chapter,” Boeing’s chairman, Steven Mollenkopf, said in a news release on Wednesday.
The company also posted a bigger quarterly loss, as its troubled defense and space business exacerbated the financial strain on the US planemaker that has already scaled back commercial aircraft production to tackle a quality crisis.
Boeing’s defense, space and security unit, one of its three main businesses, has lost billions of dollars in 2023 and 2022, which executives attributed to cost overruns on fixed-price contracts.
Such contracts have high margins but leave defense contractors vulnerable to inflationary pressures that have dented US corporate earnings in the last few years.
The planemaker used to bid aggressively for fixed-price contracts before the pandemic, but has now said it would pivot away from such contracts to stem losses at the business, which amounted to $1.76bn last year.
Ahead of last week’s Farnborough airshow, the unit’s head had said it was “significantly challenged” during the quarter.
Boeing CFO Brian West said in May the planemaker will burn rather than generate cash in 2024, hamstrung by lower jet deliveries compared with last year.
The company is mired in crisis after a cabin panel on a 737 Max 9 jets blew off midair in January, which led to a slowdown in production of its top-selling plane and a management shake-up, even as it came under intense regulatory and legal scrutiny.
The US aviation regulator has capped production of 737 Max jets at 38 each month, though Reuters has reported that Boeing has been producing jets during some weeks at a much lower level.
That has led to fewer deliveries, frustrating customers. During the second quarter, Boeing delivered a total of 92 aircraft, down 32% from last year.
Reuters contributed reporting