Boeing has named Kelly Ortberg, an experienced aerospace expert, as its new CEO to help improve the company

Boeing appointed Kelly Ortberg, an experienced aerospace executive, as its new CEO to help fix the company’s problems after a tough financial quarter. Ortberg will begin his new role on August 8 and faces a big challenge in rebuilding trust with regulators, the industry, and the public. This comes amid ongoing quality issues and financial losses.

Key Points,

1. Financial Struggles:
   • Boeing reported a loss of $1.4 billion for the last quarter. Their revenue was $16.9 billion, which was lower than the expected $17.2 billion.
   • They lost $2.90 per share, which was worse than the predicted loss of $1.97 per share.
2. Crisis Background:
   • Boeing has been dealing with a reputation and safety crisis since January, when an Alaska Airlines MAX 9 jet had a mid-air incident that put 171 passengers at risk.
   • The Federal Aviation Administration (FAA) has limited Boeing’s production of its popular 737 MAX jets to 38 per month due to quality issues.
3. Leadership Changes:
   • CEO Dave Calhoun will step down by the end of the year, and board chair Larry Kellner will not seek re-election.
   • Calhoun will stay on as a special advisor to the board until March 2025.
4. Ortberg’s Role:
   • Ortberg, who is 64, has over 30 years of experience in aerospace and defense. He previously led Rockwell Collins and helped merge it with United Technologies and RTX.
   • His immediate tasks will include improving production of the 737 jets and addressing ongoing issues in Boeing’s defense and space sectors.
5. Stock Market Reaction:
   • Boeing’s stock rose by 4.4% following the announcement of Ortberg’s appointment, as investors hope for positive changes.
6. Production Challenges:
   • Boeing has been delivering fewer aircraft than last year. They delivered 92 planes in the second quarter, a 32% drop from the previous year.
   • The defense and space business has also struggled, losing billions due to cost overruns on fixed-price contracts.
7. Future Plans:
   • Ortberg will need to address these issues and also oversee the integration of Spirit AeroSystems, which Boeing recently agreed to buy back.
   • He was chosen over other potential candidates, including Patrick Shanahan, a former Spirit Aero CEO.
8. Defense Sector Issues:
   • Boeing’s Defense, Space, and Security unit has faced significant losses. The company plans to move away from fixed-price contracts to reduce financial risks in this area.

Overall, Ortberg’s appointment is seen as a critical move to guide Boeing through its current difficulties and improve its performance across all sectors.

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