Boeing’s chief executive Kelly Ortberg has stressed that the company needs fundamental cultural change, and cannot embark on new aircraft development until it has stabilised its business and improved programme execution.
Ortberg spoke as the airframer – pressured by strike action, programme delays and charges, and quality-control issues – turned in a $4 billion loss from operations in its commercial aircraft division, and a 5% slip in revenues, for the third quarter.
“Boeing is an airplane company,” he says. “At the right time in the future we need to develop a new airplane. But we have a lot of work to do before then.”
Ortberg states that a “path to the next commercial aircraft” demands stabilisation of activities, and creating a more focused organisation by concentrating Boeing’s portfolio on doing “what we do well”.
He says Boeing was “once a benchmark” for “good culture”, and that its leadership needs to be more closely integrated with its core design and production personnel.
“This has to be more than the poster on the wall,” he adds. “These values will be used to hold leaders accountable in how they lead our teams in delivering safe, high-quality products and services to our customers.”
He states that this cultural change “isn’t something that’s just like a light-switch that flips”, and that the company has to reach a point where it is “self-policing” and holding itself accountable for cultural aspects.
Boeing’s immediate concern is ending industrial action by the IAM union, and Ortberg’s remarks on 23 October came as workers were due to vote on whether to accept the company’s latest offer.
He says that, if the strike ends, Boeing still has the task of restarting its operation and re-engaging the supply chain.
“It’s much harder to turn this on than it is to turn it off,” he states, pointing out that Boeing has to be “realistic” about schedule issues as the supply-chain returns, and that it could be a “little bumpy”.
While Boeing is striving to return 737 production rates to higher levels, above a monthly cap of 38, Ortberg says improvement to programme execution is crucial to the company’s recovery effort.
He says metrics “have to be trending in the right direction and meeting certain thresholds” before Boeing seeks regulatory approval to raise output.
“We won’t take it to the FAA if we’re not achieving those,” he says.
Ortberg says the first hike beyond 38-per-month is “going to be the hardest”, adding that the company “absolutely has to be sure” that it does not increase rates prematurely.
“I think the first rate increase is something for us all to watch,” he says, but suggests further hikes would be progressively easier. The company is hoping to exit 2025 with better production momentum.
Ortberg says an evaluation of Boeing’s portfolio is necessary. The company should be doing “less and better” rather than “more and not doing it well”, he says, but a view of its future portfolio has yet to become clear.
While the commercial aircraft core is “going to stay for the long run”, he says there are “fringe” activities which “could be more efficient”. But he stresses: “We don’t have a specific list of things we’re going to keep and not going to keep.”
