New Boeing boss Kelly Ortberg brings engineering background, aerospace roots
Adds source on Ortberg's plans to be based in Seattle in second paragraph, analyst comment in fifth paragraph and list of uninterested leaders; adds Breakingviews link
By Allison Lampert
July 31 (Reuters) -Kelly Ortberg, the former Rockwell Collins boss tapped to lead Boeing BA.N, has a background that threads a delicate needle for the planemaker - a company outsider untethered to Boeing's past, but an industry insider with anengineering background.
Ortberg willhave a lengthy to-do list when he comes out of retirement and starts onAug. 8. He plans to be based in Seattle where the 737 MAX and 777 jets are produced, a source familiar with the matter told Reuters, in an apparent nod to Boeing's engineering roots far from its Arlington head office.
He'll have to strengthen relations between Boeing and its airline customers, and earn trust with the regulators and lawmakers that have put the company under a microscope following a January 5 mid-air panel blowout that turned into a full-blown safety crisis.
Ortberg, a mechanical engineer, took over as head of key aerospace supplier Rockwell Collins in 2013 and steered the company's integration with United Technologies and RTX RTX.N until his retirement in 2021. Still, questionsremained about whether he would drive radical change favored by some politicians and industry analysts.
"While we hold Kelly in high regard, we note that it has been some time since he was a public company CEO, and as he is 64 it will probably fall to others to continue the work of fixing Boeing," said Vertical Research Partners analyst Rob Stallard.
Bob Jordan, CEO of Southwest Airlines LUV.N said the company looks forward "to working with Kelly Ortberg in his efforts to return Boeing to its place as the leading American aerospace company."
Ortberg also served as chair of the U.S. aerospace advocacy group Aerospace Industries Association (AIA) during the COVID-19 pandemic.
"I think Mr. Ortberg is likely a great choice for CEO. He has an impressive resume with an engineering background, which is crucial for operating in a complex technical environment," said Tony Bancroft, portfolio manager at Gabelli Funds, which holds shares of Boeing.
Industry insiders had previously hoped Boeing would hire someone on the younger side, in the expectation that it will take years to turn the company around. Ortberg is 64, however, and Boeing said it waived the mandatory retirement age of 65 just like it did for CEO Dave Calhoun, who is departing after a management shakeup earlier this year.
AeroDynamic Advisory analyst Kevin Michaels, who first met Ortberg at Rockwell Collins in 1996, said Ortberg is young-looking and energetic and he didn't see his age as a barrier for the top job.
“We all thought that he retired too young,” Michaels said.
Ortberg is said to have beaten out Boeing Commercial Airplanes CEO Stephanie Pope and Spirit AeroSystems SPR.N boss and former Boeing executive PatShanahan for the job.
“I think it’s a positive," said one portfolio manager that holds Boeing stock. "The narrative had been, 'I can’t believe only Boeing insiders wanted this job.'”
GE Aerospace CEO Larry Culp, Carrier Global CEO and Boeing board member Dave Gitlin and American Airlines Chairman and former Boeing CFO Greg Smith were seen as potential contenders but all indicated they were unwilling to be considered for the role, industry watchers said
Boeing had faced pressure from industry executives and U.S. lawmakers to choose new leadership with an engineering background and without lengthy ties to the company. Whether that is enough for lawmakers scrutinizing Boeing's operations remains to be seen.
"Mr. Ortberg is a mechanical engineer. I hope that means he will ensure that his top message for everyone is building the best airplane means building the safest airplane in the world," said Rep Rick Larsen, top Democrat on the House Transportation Committee who represents a district in Washington State home to major Boeing operations.
Analysts and acquaintances described Ortberg as being a good listener, honest and willing to take decisive action. "We believe during his leadership at Collins he was well liked by employees and direct reports and very personable," said Jefferies analyst Sheila Kahyaoglu in a note.
"This was while being a tough negotiator dealing with a diverse set of customers and suppliers and managing the complexity of its diverse customer base."
BREAKINGVIEWS-Boeing’s new CEO has vital copilot training to do nL4N3JN1T9
UPDATE 8-Boeing names Kelly Ortberg CEO to steer turnaround as cash burn rises nL4N3JN1JW
Reporting By Allison Lampert in Montreal. Additional reporting by Tim Hepher in Paris, Rajesh Kumar Singh in Chicago and David Shepardson in Washington. Editing by Nick Zieminski
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
