Boeing Names Robert Ortberg As New CEO Following Plea Deal and $1.4 Billion Loss

By Thea Felicity

Jul 31, 2024 10:06 PM EDT

Boeing Names Robert Ortberg As New CEO Following Plea Deal and $1.4 Billion Loss — A person walks past an unpainted Boeing 737-8 MAX parked at Renton Municipal Airport adjacent to Boeing's factory in Renton, Washington on January 25, 2024. Alaska Airlines said Thursday it expects a $150 million hit from the Boeing 737 MAX grounding, which will limit its capacity growth in 2024. The airline, which executed an emergency landing on a MAX on January 5 following the mid-flight blowout of a panel on the jet, disclosed the estimates in a securities filing, saying capacity growth will be "at or below the lower end" of its prior estimate.
(Photo : JASON REDMOND/AFP via Getty Images)

Boeing has appointed Robert "Kelly" Ortberg as its new CEO, effective August 8, 2024. AP News reported that Ortberg, a veteran in the aerospace industry, will succeed David Calhoun, who is retiring at the end of the year.

However, the new CEO appointment comes as the company had been left with major financial losses and ongoing regulatory challenges.

In its second-quarter earnings report, Boeing revealed a staggering loss of $1.4 billion, surpassing Wall Street's expectations. The company's revenue fell by 15% to $16.87 billion, driven by a sharp decline in deliveries of commercial airplanes and increased costs in its defense and space divisions.

This loss contrasts sharply with the $149 million loss reported in the same period last year. Analysts had predicted a loss of $1.90 per share, but Boeing's actual loss worked out to $2.90 per share.

Boeing Pleads Guilty to Fraud

The company's financial troubles were mostly driven and worsen by a series of legal and regulatory issues.

Earlier this month, VCPost reported that Boeing agreed to plead guilty to federal fraud charges related to its 737 Max jetliner, which was implicated in two fatal crashes.

At the same time, the Federal Aviation Administration (FAA) has intensified its oversight of the company, raising concerns about manufacturing quality following an incident involving an Alaska Airlines jet. Boeing is also dealing with supply chain disruptions and ongoing production issues.

Ortberg's appointment comes after a thorough search process, according to Boeing Chairman Steven Mollenkopf. Ortberg, previously CEO of aerospace supplier Rockwell Collins, is expected to address the company's challenges, including improving safety standards and managing production setbacks.

Investors are optimistic about Boeing's new leadership as reflected in its stock seeing a 2% increase in premarket trading, according to Nasdaq.