Robert “Kelly” Ortberg is stepping into the role of CEO at Boeing during one of the toughest times in the company’s history. With a laundry list of issues to address, Ortberg has a daunting task ahead of him. Boeing’s reputation has taken a hit due to persistent production defects, delays in aircraft delivery, and a significant cash burn. Ortberg’s first order of business is to visit Boeing’s factory in Renton, Washington, home to the troubled 737 Max, to engage with employees and review safety and quality plans.
Challenges Faced by Ortberg
The challenges facing Ortberg are immense, with Boeing’s shares down by 37% this year and a cash burn of approximately $8 billion. Ortberg, an aerospace veteran, brings over three decades of industry experience to the table, along with an engineering background. His reputation as a good listener and an industry outsider may work in his favor as he navigates through Boeing’s production stabilization and manufacturing flaw elimination.
One of Ortberg’s primary goals is to regain the trust of regulators, airlines, and the public. Boeing has been mired in controversy following two fatal crashes involving its best-selling 737 Max planes in 2018 and 2019. The company’s agreement to plead guilty to defrauding the U.S. government during Max certification further tarnished its image. Ortberg’s promise to be transparent and provide timely updates to staff and stakeholders is a step in the right direction.
Ortberg faces immediate challenges not only in Boeing’s commercial jet business but also in its defense unit. Issues with the delayed certification of new 737 and 777 models, as well as the problems with the two 747s slated to be the next Air Force One, demand Ortberg’s attention. Additionally, Boeing’s Starliner capsule’s misfire has put its space exploration plans in jeopardy, with NASA contemplating a switch to SpaceX for future missions.
The first 100 days of Ortberg’s tenure will be crucial, as decisions made early on will have long-lasting impacts on the company. With Boeing’s workforce undergoing significant changes due to buyouts and layoffs, Ortberg and his team must ensure that the workforce is adequately trained. A looming strike by Boeing factory workers highlights the tension around pay raises and working conditions, further complicating Ortberg’s task of restoring Boeing’s reputation.
Building Relationships and Restoring Confidence
Boeing’s strained relationships with customers and suppliers pose another hurdle for Ortberg. Airline CEOs have expressed concerns over delivery delays and production issues, putting Ortberg on notice to mend these relationships. Southwest Airlines, one of Boeing’s major customers, has scaled back its growth plans due to aircraft delivery delays, underscoring the urgency for Ortberg to rebuild trust and confidence in Boeing’s capabilities.
Robert “Kelly” Ortberg’s journey as Boeing’s new CEO is fraught with challenges and obstacles. His ability to listen, lead, and make tough decisions will be put to the test as he aims to steer Boeing back on course to regain its industry leadership position. With a focus on transparency, quality, and safety, Ortberg’s efforts to restore Boeing’s reputation will be closely watched and scrutinized in the coming months.
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