Amid a crisis over quality, Boeing has announced its next CEO. On Wednesday, the company named aerospace veteran Kelly Ortberg their next CEO. Kelly is expected to turn around the planemaker in legal and regulatory problems, which has lost more than $1 billion. Ortberg will start his journey as the CEO of Boeing on 8 August to rebuild trust with regulators, investors, the industry and the public.
Boeing has been embroiled in a reputational and safety crisis after the 5 Jan incident, which saw a mid-air cabin blowout on an Alaska Airlines-operated MAX 9 jet carrying 177 passengers. Moreover, the planemaker posted a revenue loss of around $1.4 billion with a revenue of $16.9, even less than experts’ predicted $17.2 billion. It also lost $2.9 per share, more than many experts and analysts expected.
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Boeing’s CFO, Brian West, told analysts on a conference call that cash use in 2024 will be far more than what the company previously expected and that the company will keep on burning cash all through the third quarter. Boeing’s second-quarter free cash flow use was $4.3 billion. However, the announcement of a new CEO has worked in Boeing’s favor, as its share closed 2% higher at $190.60 on Wednesday.
The company’s crisis has led to a massive reshuffle of leadership. The current CEO, Dave Calhoun, decided to step down by the end of the year, and the board chair, Larry Kelner, will not stand for reelection. Calhoun seemed optimistic about the CEO change and said, “My guess is he’s going to put his arms around Stephanie ( head of Boeing Commercial Airplanes) and the rest of the team in a big way and just try to support their work.”
Only time will tell how the CEO change will affect the company’s reputation in the industry and public.
