How Kelly Ortberg is rebuilding Boeing from the inside out |
How Kelly Ortberg is rebuilding Boeing from the inside out
Before Boeing named Kelly Ortberg as CEO in August of 2024, the airplane-maker was an enterprise in crisis, and faith was fading that arguably the most iconic of American manufacturers would ever regain its lost luster.
Just as Boeing was slowly recovering from the Lion Air and Ethiopian Airlines 737 Max crashes in 2018 and 2019 that killed 346 passengers and crew, a Max door-plug blowout over Portland, Ore. in January of 2024 trained the spotlight on its manufacturing practices, which had increasingly put profits over quality. Federal regulators cracked down, freezing Max production at a third below its prior peak. Boeing’s defense and space division, meanwhile, was booking multi-billion losses on federal contracts spouting big cost overruns.
The laundry list of problems got longer: The challenge of integrating stricken Spirit AeroSystems, the fuselage supplier Boeing had sold two decades and just agreed to re-acquire, greatly upped its risk profile going forward. To make matters worse, Boeing was facing a potentially crippling strike from its powerful union of 33,000 machinists in the Puget Sound area, whose leaders claimed that since management couldn’t do it, the rank-in-file needed to “save Boeing from itself.”
The job looked so tough that Boeing struggled to find a taker. Among the marquee names the airplane colossus reportedly courted, sans sale, were CEOs Larry Culp of GE Aerospace, Dave Gitlin of Carrier Global, and its own chairman, Steve Mollenkopf, the former Qualcomm chief.
Ortberg was a total dark horse. He’d served successfully as CEO of aerospace and defense manufacturer Rockwell Collins for five years. United Technologies acquired Rockwell in 2018, and then sold to RTX less than two years later. Soon thereafter, Ortberg retired. By the time he took the Boeing job, Ortberg hadn’t filled an operating role for over four years.
Ortberg’s demeanor is so understated, and he keeps such a low public profile, that the scale of his achievement since then hasn’t gotten the kudos it deserves—but that’s beginning to change. Put simply, Boeing’s en route to one of the most dramatic, and quickest, comebacks on record for a formerly ailing corporate giant. “Boeing found its change-agent in Ortberg,” says Scott Mikus, an analyst at Melius Research. “Thanks to Ortberg, the dream of a great industrial company is still alive.”
Ortberg brings the right stuff as a seasoned engineer who features a history of promoting smooth labor relations. He’s reinstated “an engineering-first” culture at Boeing, a sharp departure from the falling interest and lack of investment in innovation, and focus on share buybacks, that reigned in the pre-Max-crash period from 2014 to 2018.........