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Robert “Kelly” Ortberg faces a massive to-do list as Boeing’s new chief executive: a potential labour strike next month, improving quality and stabilising commercial jet production, rebuilding relationships with customers and regulators, and keeping Boeing’s credit rating north of junk territory.
Ortberg, 64, is a veteran aerospace executive coming out of retirement to take the reins at Boeing starting August 8, and will also join its board of directors. The storied manufacturer has pleaded guilty to a criminal charge, admitting it misled US regulators about a flight control system that caused two fatal crashes of the 737 Max. It is struggling to improve safety and quality processes in production after a door panel blew off a commercial flight in January.
Boeing said in a regulatory filing that it will pay Ortberg an annual base salary of $1.5mn as well as incentives for next year valued at $20.5mn. This year, Ortberg will receive $1.25mn in cash and other remuneration valued at $16mn.
The board selected him over other potential candidates, including Pat Shanahan, the chief executive at supplier Spirit AeroSystems, and Stephanie Pope, who started as head of Boeing’s commercial planes business earlier this year. Prior to retirement, Ortberg held a series of top positions at avionics manufacturer Rockwell Collins, serving as its chief executive for five years until its $30bn sale to United Technologies.
Boeing needs “a major reset”, said Kevin Michaels, managing director of AeroDynamic Advisory, who worked with Ortberg at Rockwell Collins in the 1990s. Though he expressed optimism about Ortberg’s ability to tackle the challenge, “obviously he’s going into a cultural buzz saw”, Michaels said.
Ortberg was born in Dubuque, Iowa, and graduated from the University of Iowa in 1982 with a degree in mechanical engineering. He moved to the South-west to work as an engineer at Texas Instruments before returning to his home state in 1987 for a job as a programme manager at Rockwell Collins.
At Rockwell Collins, Ortberg helped win work on Boeing’s 787 Dreamliner after competitor Honeywell beat out the company to become the prime avionics supplier for the 777, said Melius Research analyst Robert Spingarn. He reimagined avionics undergirded by software rather than hardware, so “you didn’t have to replace a bunch of hardware to upgrade the avionics system”. The change made it possible to extend the same system to different jets and airlines and improved the company’s return on investment.
“He is an engineer and a consensus builder who knows how to sell a product vision,” Spingarn said.
Ron Corbett, vice-president of economic development at the Cedar Rapids Metro Economic Alliance, said the city’s residents worried about job losses in the wake of Rockwell Collins’s sale. Ortberg “was trying to do everything possible to keep employment numbers where they needed to be, position the company for growth, but also be sensitive to shareholders,” Corbett said.
Ortberg and his wife, Valerie, moved to Florida in 2018 after the deal closed. Now he plans to move to Seattle to lead Boeing, which has been criticised for moving its corporate headquarters far from its factories, first to Chicago and then to Arlington, Virginia.
Jon Holden, president of International Association of Machinists District 751, the union negotiating a new contract for the workers in Washington state who build Boeing’s jets, called the decision to appoint a Seattle-based chief executive “a step in the right direction”.
Rich Plunkett, director of strategic development for the union representing Boeing’s engineers, said it looked forward to working with Ortberg “in hopes of returning Boeing to its engineering principles and problem-solving culture where employees are part of the solution rather than a cost to be minimised”.
Boeing needs a “company doctor”, said Agency Partners analyst Nick Cunningham, akin to Louis Gallois, the veteran French industrial executive and company troubleshooter who was drafted in to lead EADS, the former parent of Airbus, almost two decades ago. Cunningham said Ortberg was “reminiscent” of similar qualities at Rockwell Collins, coming across as “straightforward, charismatic and not too grand”.
Chuck Hammond, owner and chief executive of Cedar Rapids manufacturer Raining Rose, knows Ortberg not as the head of a public company, but as his friend of almost three decades. Hammond described Ortberg as “the kind of person who gives a damn”.
Early in their careers, Hammond once asked Ortberg whether he thought meeting one-on-one with employees without an agenda was important. Ortberg was “a no-nonsense guy”, so he was surprised to learn he thought “one-on-ones” were critical.
“He was clearly invested in the people he worked with and wanted to learn from them,” Hammond said.
He does not fully understand why his friend wants to tackle leading a company with such large problems but thinks it might be because he wants to make a difference.
“It’s a calling,” he said. “It feels like the good side won, putting someone like that in charge of a company like that. I still don’t totally get it, but I appreciate what he’s doing.”
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