Regardless of the industry, a new CEO arrives with a to-do list, the length of which depends on the situation of the company.
The immediate priorities are likely to be tactical – for example, fixing broken parts – but there will also be higher-level strategic objectives at play, depending on whether it is about continuity or about saving the company from itself.
For the new Boeing CEO Kelly Ortberg, the list is long: He is trying to heal the company’s numerous self-inflicted wounds and at the same time put the aircraft manufacturer on a more secure footing for the future.
The pile of remaining tasks includes not insignificant items such as negotiating a new collective bargaining agreement with the machinists’ union, completing the acquisition of 737 fuselage supplier Spirit AeroSystems – and then integrating the aerostructures company – repairing strained relations with U.S. regulators and lawmakers, increasing production, certifying three key aircraft and, oh yes, making sure customers feel heard again.
And that’s just the beginning. In the longer term, Ortberg must also decide – and formulate – what the plan for the successor to the 737 Max looks like and how it will approach a low-CO2 future.
If you want to have a clear picture of the company’s malaise, then look at Flight InternationalThe new ranking of the 100 largest aerospace companies. Boeing is back at the top, boasting an impressive turnover of $77.7 billion in 2023, $7 billion more than its European rival.
But this is from a company that had revenues of $101 billion in 2018—before the 737 Max crisis, the Covid-19 downturn, and various other problems both self-inflicted and not. And while Airbus posted an operating profit of $4.9 billion last year, Boeing narrowly ended up with a loss of $773 million (which is at least an improvement on the nearly $3.5 billion losses in 2022).
And the financial problems have not abated this year either: in the first half of the year, operating losses amounted to a shocking $1.1 billion.
Despite the seemingly herculean task ahead, Ortberg’s appointment was warmly welcomed by analysts, the financial community and customers, one of whom, United Airlines CEO Scott Kirby, predicted that under his leadership, Boeing would recover faster than many had predicted.
It is Ortberg’s engineering and management skills – honed during his time at Rockwell Collins and later Collins Aerospace – that most please industry observers, who see Boeing returning to its product-focused roots and abandoning the finance-obsessed strategy that they believe is the cause of the company’s current malaise.
Ortberg only moved into his new office at the beginning of August and is currently enjoying something of a honeymoon phase. He has used the opportunity to build bridges with customers and unions.
But as the recent setback with the 777-9 has shown, problems – even if inherited in this case – are never far away at Boeing.
And although the initial signs are positive, it must be taken into account that Ortberg’s predecessor, David Calhoun, was also initially considered a strong new hire for 2020.
While the magnitude of the challenge ahead cannot be hidden and there is no guarantee of success, in Ortberg, Boeing has hired one of the few people capable of reversing the company’s painful decline.
