Whatever the business, an incoming chief executive will arrive armed with a ‘to do’ list, the length of which depends on the state of the company.
While the immediate priorities will likely be at a tactical level – fix the broken bits, for example – there will be larger strategic aims in the mix as well, driven by whether the goal is continuity or saving a company from itself.
For new Boeing chief executive Kelly Ortberg, the list is a long one, as he attempts to staunch the bleeding from the company’s plethora of self-inflicted wounds, while also putting the airframer on a more secure footing for the future.
In the pending pile are not insignificant items like negotiating a new wage agreement with its machinists’ union, completing the acquisition of 737 fuselage supplier Spirit AeroSystems – and then integrating the aerostructures firm – mending frayed relations with the US regulator and lawmakers, ramping up production, certificating three key aircraft, oh, and making sure customers feel listened to again.
And that is just for starters. Longer term, Ortberg also needs to decide – and articulate – what the plan is for a 737 Max successor and how it will approach a low-carbon future.
If you wanted a clear illustration of the company’s malaise, then look no further than Flight International’s new ranking of the Top 100 aerospace companies. Boeing is back on top of the heap, boasting an impressive turnover of $77.7 billion in 2023, $7 billion more than its European rival.
But this from a company that recorded revenue of $101 billion in 2018 – before the 737 Max crisis, the Covid-19 downturn and various other problems, self-inflected and otherwise. And whereas Airbus booked an operating profit of $4.9 billion last year, Boeing scraped to a $773 million loss (which was at least an improvement on 2022’s almost $3.5 billion of red ink).
And that financial pain has not eased this year either: first-half operating losses stood at a wince-inducing $1.1 billion.
Despite the apparently Herculean task facing him, Ortberg’s appointment has been warmly welcomed by analysts, the financial community and by customers – with one, United Airlines chief Scott Kirby, predicting that under his stewardship Boeing will recover faster than many have predicted.
It is Ortberg’s engineering and management expertise – honed during his stewardship of Rockwell Collins and then Collins Aerospace – that has most pleased industry watchers. They see Boeing returning to its product-led roots and ditching the finance-obsessed strategy that is, in their view, at the root of the firm’s current malaise.
Having only moved into his new office at the beginning of August, Ortberg is enjoying something of a honeymoon period and has used the opportunity to build bridges with customers and unions alike.
But as the latest setback with the 777-9 has shown, problems – albeit in this case inherited ones – are presently never far away at Boeing.
And although the initial signs are positive, it should be noted that Ortberg’s predecessor David Calhoun was also initially seen as a strong appointment in 2020.
While there is no disguising the scale of the challenge in front of him and there is no guarantee of success, in Ortberg Boeing has hired one of the few people capable of reversing the company’s painful decline.
