Boeing names new CEO Robert ‘Kelly’ Ortberg as it posts quarterly loss of more than $1.4 billion

Boeing on Wednesday named an aerospace veteran with a background in mechanical engineering as its new chief executive officer, as the company looks to turn a page on a history of legal, regulatory and manufacturing woes, as well as mounting financial fallout.

Robert “Kelly” Ortberg, former CEO of aerospace equipment maker Rockwell Collins, will replace David Calhoun as CEO and chairman, effective Aug. 8, the company said. Calhoun said in March he would retire at the end of the year, and analysts generally praised the faster transformation.

“There is a lot of work to be done, and I can’t wait to get started,” Ortberg said in a statement released by Boeing.

Boeing announced a new CEO as it reported a loss of more than $1.4 billion due to falling revenue in the second quarter. The loss was wider and the company’s revenue fell short of Wall Street’s gloomy expectations as both Boeing’s commercial airplane business and its defense unit shed money.

The disappointing results come at a turbulent time for Boeing, which is the subject of numerous investigations into the company’s safety culture and manufacturing quality.

The U.S. aerospace giant agreed to plead guilty this month to federal fraud charges related to its 737 Max jet and two crashes that killed 346 people. The Federal Aviation Administration increased oversight of the company and limited the number of planes it could produce after a panel broke off an Alaska Airlines Max plane flying at 16,000 feet. No one was seriously injured in the horrific incident and subsequent scrutiny tarnished Boeing’s reputation.

Boeing Chairman Steven Mollenkopf said Ortberg was selected after a “thorough and extensive search process” and “has the right skills and experience to lead Boeing into its next chapter.” Ortberg has built a reputation for leading complex engineering and manufacturing companies, Mollenkopf said.

Calhoun, who said he was not involved in the hiring decision, is to serve as a special adviser to Boeing’s board until next March. He suggested Ortberg would support Boeing’s current executives rather than bring in his own team.

“I don’t think he came in with the intention of changing a lot of people,” Calhoun said on a call with analysts. “He knows full well that we’re in recovery mode and he knows full well that we need to get out of recovery mode and we need to stabilize this situation and move forward.”

Ortberg plans to be headquartered in Seattle, according to a person familiar with the decision who was not authorized to discuss the situation publicly. That would allow him closer contact with Boeing factories that produce several planes, notably the 737 Max.

Boeing was founded in Seattle but moved to Chicago in 2001. Then, to be closer to government officials and regulators, its headquarters moved to the Washington, Virginia, suburbs in 2022.

Ortberg emerged as a leading candidate only recently. Others who were reportedly considered for the job include Patrick Shanahan, a former Boeing executive who is now CEO of a top supplier, Spirit AeroSystems, and another longtime Boeing executive, Stephanie Pope, who recently took over the company’s commercial airplanes division.

Ortberg led Rockwell Collins from 2013 to 2018. The company, which developed electronics and other equipment for commercial and military aircraft, then merged with United Technologies and eventually became part of RTX, formerly known as Raytheon. He left RTX in 2021.

Richard Aboulafia, a longtime aerospace analyst and consultant and recent harsh critic of the company, said the hires are great news for Boeing.

“He is a deeply respected leader in the aerospace industry and gives the company more hope for a brighter future than the company has had in decades,” Aboulafia said.

Ortberg, who has experience in both commercial and defense aviation, “was probably on a relatively short list of people who were qualified to take on this challenge,” said Jeff Windau, an analyst at financial advisory firm Edward Jones.

The new CEO’s first task, Windau said, will be to work with the FAA to help Boeing achieve its goal of increasing production of the Max planes.

The company lifted the mandatory retirement age of 65 for Ortberg, a spokesman said. Boeing did the same for Calhoun days after he turned 64 in 2021.

Like Calhoun, who took over as CEO after the Max’s twin disasters, Ortberg takes on leadership of a company that has faced constant crises and criticism from both inside and outside.

Boeing, based in Arlington, Virginia, has been pushing back against whistleblower allegations that production shortcuts have compromised safety. The company is dealing with supply chain issues that have hampered production, which it hopes to resolve in part by reacquiring Spirit AeroSystems, a key contractor. The company is facing a strike threat this fall from its largest union, the International Association of Machinists.

The company is still trying to convince regulators to approve two new Max models and a larger version of its twin-aisle 777 jet. And it faces a multibillion-dollar decision about when to design a new single-aisle plane to replace the Max.

Its reputation took a further hit recently when engine failures and helium leaks in Boeing’s new Starliner capsule prompted NASA and Boeing to leave two astronauts on the International Space Station until engineers could finish working to fix the problem.

Quarterly earnings reported Wednesday reflect the scale of Boeing’s challenges. It reported a loss of $1.44 billion for the second quarter, compared with a loss of $149 million a year earlier. Boeing has lost more than $25 billion since the beginning of 2019.

Excluding special items, the second-quarter loss was $2.90 per share. Analysts had expected a loss of $1.90 per share, according to a FactSet survey.

Revenue fell 15% to $16.87 billion, below Wall Street’s average forecast of $17.35 billion. The commercial airplanes unit reported an operating loss of $715 million and revenue fell 32% as Boeing delivered fewer passenger planes to airlines — 92 planes compared with 136 a year earlier.

The FAA restricted production of Boeing’s Max planes shortly after the Alaska Airlines incident, but Boeing has not even reached the FAA limits as it scrambles to fix its manufacturing process. The company said Wednesday it is sticking to its plans to increase Max production to 38 planes per month by the end of the year.

Boeing has taken on $244 million in fines it agreed to pay as part of a settlement with the Justice Department over the development of the Max. A federal judge in Texas will soon consider whether to approve the deal, which also calls for the appointment of an independent compliance monitor and Boeing to invest at least $455 million “in its compliance, quality and safety programs.”

Many families of those killed in twin Max crashes off the coast of Indonesia in 2018 and in Ethiopia less than five months later oppose the deal and plan to ask a judge to throw it out.

Boeing’s defense and space unit lost $913 million because of $1 billion in setbacks on four fixed-price government contracts, including a deal to build two new Air Force One presidential planes. The smaller services company earned $870 million.

Boeing shares rose 4% in afternoon trading.