Boeing’s New C.E.O.

Yesterday, October 23, 2024, Boeing announced their 3rd quarter 2024 financial results. Obviously they weren’t good. They reported a loss of more than $6 billion.

Additionally, 33,000 members of the International Association of Machinist and Aerospace workers voted down the recent contract proposed by the company by 64%.

In August 2024, Boeing appointed Kelly Ortberg as C.E.O. He has an engineering background, and came from Rockwell Controls, another aerospace company.

The first thing that he did was to announce that he was locating to Seattle, WA., to be close to Boeing’s major manufacturing facility. Boeing’s Corporate Office is in Arlington, Va. and their Chief Financial Officer is located in Connecticut.

He announced that he planned to spend time on the manufacturing floor, “managing by walking around.”

He indicated that Boeing needed to reset their relationship with labor and this would be his first move. He has also held meetings with union leadership.

In recent letters to employees, Mr. Ortberg said that “Boeing needed to improve and stabilize their defense business as well as their 737 and 777 programs.” At the present time, because of the strike, Boeing is unable to deliver any 737 or 777 aircraft. He also indicated that the company is carrying too much debt and is considering selling assets. He said that there is “no quick fix.” They are also looking at raising additional capital, via a stock offering.

The thing that struck me the most about his comments yesterday, was that he is requiring his executives to spend time on the manufacturing floor, in engineering and in the shops that feed manufacturing. This is where Boeing lost its way.

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What a “unique concept.” This is exactly what Fairchild experienced in 1966 and it took an outside manufacturing executive to turn the ship around.

My experience with Boeing in the 1960’s was that they were an exceptional company, because of their engineering and manufacturing expertise. When they moved their corporate office out of Seattle to Chicago and subsequently to Arlington, Va., things changed. You cannot manage a company such as Boeing, remotely.

They currently have a backlog of over half a trillion dollars, but it will be a long way back, and take time. They have to settle the current strike, get their supply chain working efficiently. They also have to improve their labor relations. They need executives, particularly financial type’s, that understand the manufacturing process. The finance office has to be relocated to where the action is.

The new C.E.O. has a herculean task before him. However, I believe if anyone can “right the ship,” he can.

As most of you know, I spent part of my career in the aerospace world. From 1966 until late 1968, I was with the Aircraft Division of Fairchild Hiller. We had similar issues as to what Boeing is currently facing. It took a new General Manager, with manufacturing experience, to get the company on track.

I wrote about this experience on my Blog, March 19, 2024. I followed up with another article dated March 30, 2024. For those of you who haven’t read these articles, my Blog can be found on my website- jesssweely.com. There, you will find various writings that have interested me.

Jess Sweely

Madison, Va. 

October 24, 2024