Boeing has named aerospace industry veteran Kelly Ortberg as its CEO to turn around the struggling planemaker after a quarter where it lost more than $1 billion.
Ortberg will start on Aug. 8 with the monumental task of rebuilding trust with regulators, the industry and the public during a quality crisis, and as its finance chief warned it would continue to burn cash.
Boeing has been mired in a reputational and safety crisis after a Jan. 5 mid-air cabin panel blowout on an Alaska Airlines-operated MAX 9 jet carrying 171 passengers.
The planemaker posted a loss of $1.4 billion on revenue of $16.9 billion, short of the consensus among analysts for $17.2 billion, according to LSEG data. It lost $2.90 a share, short of expectations for a loss of $1.97 a share.
Boeing CFO Brian West told an analyst call on Wednesday he expects cash usage in 2024 to be larger than previously thought and expects cash burn during the third quarter. The company’s free cash flow usage was $4.33 billion.
The CEO appointment lifted shares by 4.4% in a relief trade, despite the struggles across its businesses, including in defense and space. Ortberg will also have to revive production of the company’s strong-selling 737 jets from about 25 in June and July to 38 by year’s end.
The company’s crisis led to an executive reshuffle in which CEO Dave Calhoun decided to step down by the end of the year and board chair Larry Kellner said he would not stand for re-election.
Calhoun told analysts he didn’t think Ortberg’s arrival would lead to a big leadership overhaul at Boeing. Stephanie Pope, the head of Boeing Commercial Airplanes, was seen as a possible candidate to succeed Calhoun.
“My guess is he’s going to put his arms around Stephanie and the rest of the team in a big way and just try to support their work,” Calhoun told analysts.
Calhoun will be a special advisor to the board until March 2025, Boeing chair Steve Mollenkopf said on Wednesday.
