New boss to lead Boeing out of crisis

The struggling US aircraft manufacturer Boeing is getting help from an old veteran in the industry. The new boss will be Kelly Ortberg, who was at the helm of an aviation and defense supplier for many years.

Kelly Ortberg was actually already retired. The 64-year-old had most recently headed the aerospace and defense supplier Rockwell Collins for many years and worked for Rockwell owner RTX (formerly Raytheon) until his retirement three years ago.

Now the experienced manager and industry expert is to get the struggling Boeing Group back on its feet starting August 8. This means that the current boss, David Calhoun, will be replaced earlier than initially announced – the 67-year-old originally only wanted to leave at the end of the year.

“Very popular and very approachable”

The new boss has a mountain of problems to deal with. Since the crashes of two 737 Max aircraft more than five years ago, which killed almost 350 people, Boeing has not been able to get out of the crisis. In January, an Alaska Airlines plane lost part of its fuselage shortly after takeoff. The jet was able to return to the airport of departure with a gaping hole in the side wall. This time, no one was seriously injured.

At Boeing, Ortberg is not only tasked with getting the struggling commercial aircraft business back on track and managing the ramp-up of production. He also has to take care of the aerospace and defense business. “There is a lot of work to do and I'm looking forward to getting started,” said Ortberg. “During his time at Collins, he was very popular with employees and direct reports and very approachable,” wrote Jefferies analysts recently about Ortberg. He is considered a tough negotiator.

Ortberg thus beat out Patrick Shanahan, CEO of the supplier Spirit AeroSystems, who was considered the favorite to succeed Calhoun. Spirit is about to be taken over by Boeing. The change was well received on the stock market: the shares rose by 2.0 percent.

Boeing delivered a third fewer aircraft

The latest business figures also show the huge tasks that Ortberg has ahead of him. In the second quarter, Boeing delivered 92 aircraft, a third less than a year ago. The company is deep in the red, with losses increasing tenfold to around 1.4 billion dollars. Sales also fell by 15 percent to the equivalent of 15.6 billion euros. The loss was even greater than analysts had expected.

Aside from the commercial aircraft business, the aerospace and defense business is also in trouble. The division lost billions in the past two years because it had signed fixed-price contracts and was unable to pass on increases in energy and raw materials costs to customers. The company recently announced that it would change course.

Boeing has been battling a reputation crisis for some time now. But since then, the US aviation authority FAA has tightened the requirements for Boeing again. The Airbus rival is only allowed to build 38 737 MAX aircraft per month. It is unclear how long this limit will apply. At times, Boeing produced significantly fewer of these aircraft for weeks at a time.

With information from Ralf Borchard, ARD Washington.