Boeing has named an aerospace industry veteran and engineer as its new chief executive as the troubled plane-maker looks for a turnaround.
Robert K “Kelly” Ortberg, a long-time leader at aircraft electronics supplier Rockwell Collins, will start in the position next month, Boeing said.
He will replace Dave Calhoun, who announced plans to step down this spring, after the mid-air blowout of a piece of a new plane flown by Alaska Airlines reignited criticism of Boeing’s manufacturing and safety record.
The announcement came as the firm reported deepening financial losses.
Boeing board chairman Steven Mollenkopf said Mr Ortberg had the “right skills and experience to lead Boeing in its next chapter”.
“He is an experienced leader who is deeply respected in the aerospace industry, with a well-earned reputation for building strong teams and running complex engineering and manufacturing companies,” he wrote in a letter to Boeing staff.
Mr Ortberg, a 64-year-old Iowa native, had been seen as a “bright star” in the industry before his retirement in 2021, known for steering a key industry supplier through several mergers.
In Boeing, he is taking on a company struggling to repair its reputation, which was badly damaged after it was implicated in fatal crashes of two of its 737 Max planes more than five years ago.
It recently pleaded guilty to a fraud charge related to those tragedies, agreeing to a criminal fine of nearly $244m (£190m).
It continues to face other lawsuits and government probes sparked by the Alaska Airlines incident, as well as mounting financial losses.
On Wednesday, Boeing said it had lost $1.4bn between April and June, compared with a roughly $150m loss last year.
As well as the troubles in its commercial unit, the hole reflected increased costs in the company’s defence business, which often involves fixed price contracts and has been hit by the sharp run-up in prices in recent years.
Mr Ortberg said he would put “safety and quality at the forefront” as he takes on the new role leading more than 170,000 people around the world.
“There is much work to be done, and I’m looking forward to getting started,” he said.
Mr Ortberg spent more than two decades at Rockwell Collins before being named named chief executive in 2013.
The role sometimes brought him into conflict with Boeing, a client and sometimes competitor, such as when the bigger firm opposed plans to merge Rockwell Collins with United Technologies in 2018.
Among employees, Mr Ortberg, a former Boy Scout, won a reputation for being focused on the rank-and-file, at one point eliminating parking perks that had been granted to executives, according to an account in a local Iowa newspaper when he retired from the combined company.
On a call with analysts on Wednesday, Mr Calhoun, who was not involved in the pick, said his successor was a “seasoned operator” who was aware of the challenge ahead.
“He knows full well that we’re in recovery mode and he knows full well that we’ve got to complete the recovery mode,” he said.
Boeing, one of the world’s two major manufacturers of commercial airplanes, currently has a backlog of about 5,400 aircraft on order, it reported on Wednesday.
The troubles at the firm, which have forced it to slow production, have spilled over into the wider aerospace industry, contributing to significant delays in delivering new planes for airlines looking to expand routes and improve fuel efficiency.
Christopher Carey, portfolio manager at Carnegie Investment Council, said it would be a “wait-and-see story” as to whether the new appointment marks a turning point for the company.
“All eyes really will be on the coming quarters to see if Boeing is able – and he himself is able – to live up to that promise,” he said.
Shares rose more than 1% after the announcement, signalling optimism among investors.
Representative Rick Larsen, the senior Democrat on a key House Transportation Committee, wrote on social media that he was “encouraged” to see the company appoint a mechanical engineer to the top role.
“I hope that means he will ensure that his top message for everyone is building the best airplane means building the safest airplane in the world,” he said.
Mr Calhoun, who will stay on as a special advisor to the board of directors until March 2025, said the firm was already making progress.
He pointed to the deal announced earlier this month to acquire Spirit Aerosystems, as well the plan the company submitted to regulators related to its manufacturing process.
Boeing also said it had managed to increase production of commercial planes over the three months to June although it still faces a cap on output that was imposed by the federal government after the Alaska Airlines incident.
“Despite a challenging quarter, we are making substantial progress strengthening our quality management system and positioning our company for the future,” Mr Calhoun said.
