Boeing names Kelly Ortberg President and CEO
Ortberg succeeds Dave Calhoun; Boeing Q2 revenue down 15% on lower deliveries.
Boeing announced the appointment of Robert K. "Kelly" Ortberg as President and Chief Executive Officer, effective August 8, 2024.
Ortberg, who will also join Boeing's Board of Directors, will succeed Dave Calhoun, who announced his intention to retire earlier this year, according to an official release by Boeing.
Calhoun served as President and CEO since January 2020, and has been a member of Boeing's Board of Directors since 2009.
"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," says Steven Mollenkopf, Chair of the Board. "Kelly 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. We look forward to working with him as he leads Boeing through this consequential period in its long history.
"The board would also like to thank Dave Calhoun for his strong leadership at Boeing, first as Chair and then as CEO, when he stepped in to steer the company through the challenges of recent years.”
Ortberg, 64, brings over 35 years of aerospace leadership to the position, says the release. “He began his career in 1983 as an engineer at Texas Instruments, and then joined Rockwell Collins in 1987 as a programme manager and held increasingly important leadership positions at the company prior to becoming its President and CEO in 2013. After five years leading Rockwell Collins, he steered the company's integration with United Technologies and RTX until his retirement from RTX in 2021. He has held a number of important leadership posts in industry, including serving on the Board of Directors of RTX. Additionally, he serves on the Board of Directors of Aptiv PLC, a global technology company and an industry leader in vehicle systems architecture. He is the former Chair of the Aerospace Industries Association (AIA) Board of Governors.”
Ortberg holds a bachelor's degree in mechanical engineering from the University of Iowa, the release added.
"I'm extremely honoured and humbled to join this iconic company," says Ortberg. "Boeing has a tremendous and rich history as a leader and pioneer in our industry, and I'm committed to working together with the more than 170,000 dedicated employees of the company to continue that tradition, with safety and quality at the forefront. There is much work to be done, and I'm looking forward to getting started."
Q2 revenue down 15%
Boeing reported second quarter revenue of $16.9 billion, down 15 percent, and net loss of $1.4 billion compared to a net loss of $149 million in Q2 2023.
“Results primarily reflect lower commercial delivery volume and losses on fixed-price defence development programmes,” says an official release.
Calhoun says: "Despite a challenging quarter, we are making substantial progress strengthening our quality management system and positioning our company for the future. We are executing on our comprehensive safety and quality plan and have reached an agreement to acquire Spirit AeroSystems. While we have more work ahead, the steps we're taking will help stabilise our operations and ensure Boeing is the company the world needs it to be. We are making important progress in our recovery and will continue to build trust through action and transparency."
Operating cash flow for the quarter was -$3.9 billion, reflecting reduced commercial deliveries and unfavourable working capital timing.
Commercial Airplanes reported revenue of $6 billion and an operating margin of -11.9%, reflecting lower deliveries and higher planned costs, including research and development.
The division delivered 92 aircraft during the quarter, and the backlog includes over 5,400 airplanes with a total value of $437 billion.
“During the quarter, the company submitted a comprehensive safety and quality plan to the Federal Aviation Administration (FAA). The 737 programme gradually increased production and aims to reach 38 aircraft per month by year-end. The 787 programme continues its plan to return to five aircraft per month by the end of the year. In July, the 777X programme began FAA certification flight testing after receiving type inspection authorisation.”
Defence, Space & Security second quarter revenue was $6 billion. The second-quarter operating margin of 15.2% primarily reflects $1 billion in losses on certain fixed-price development programmes. “This includes a $391 million loss on the KC-46A programme, mainly due to a slowdown in commercial production and supply chain constraints. Losses associated with the T-7A, VC-25B, and commercial crew programmes are attributed to higher estimated engineering and manufacturing costs, along with technical challenges.”
Global Services second quarter revenue of $4.9 billion and operating margin of 17.8 percent reflect higher commercial volume and mix, the release added.
