Boeing CEO outlines changes needed to return company to 'leadership position'

Boeing president and CEO Kelly Ortberg stated (23-Oct-2024) the company is "at a crossroads" and said: "The trust in our company has eroded", "We're saddled with too much debt", and "We've had serious lapses in our performance across the company which have disappointed many of our customers". Mr Ortberg also highlighted opportunities for the company, with a backlog of approximately USD500 billion, a customer base "that want us and need us to succeed" and employees "who are thirsty to get back to the iconic company they know". Mr Ortberg said restoring Boeing to "the leadership position that we all know and want" will require changes in the following areas:

• A fundamental culture change:
  • Boeing's leaders "need to be closely integrated with our business and the people who are doing the design and production of our products";
  • The company needs to "prevent the festering of issues and work better together to identify, fix, and understand root cause";
  • The company will redefine its values, which "will be used to hold leaders accountable in how they lead our teams in delivering safe, high-quality products and services to our customers";
  • Mr Ortberg commented: "We will be relentless in changing the Boeing culture through action, not just words on a page";
• Stabilise the business:
  • Ending the strike by the International Association of Machinists and Aerospace Workers (IAM) and restarting the factories and the supply chain. Mr Ortberg said he is "committed to resetting the relationship" with IAM;
  • Implementation of the safety and quality plan, which has been reviewed with the US FAA and will be used to measure the stability of Boeing's production system. Measuring production system stability is necessary to gain FAA authority to increase 737 MAX production rates;
  • Managing the balance sheet to support retaining Boeing's investment grade credit rating. Mr Ortberg said: "I'm confident that we have a good path forward to manage the realities of our business and retain our investment grade rating";
• Improve execution discipline on new platform commitments, including commercial derivatives of the 737 MAX and 777:
  • Mr Ortberg said: "We have to be better at understanding and managing the risks on these projects more proactively", including disciplined programme and risk management in all phases. He added: "We need the management team much more focused on their programmes and much more active working with their customers on ensuring success and anticipating risks before they happen";
  • Mr Ortberg said supply chain management improvements "will be critical";
• Build a new future for Boeing:
  • Mr Ortberg said: "At the right time in the future we need to develop a new airplane", but added: "We have a lot of work to do before then". He added: "We need to reset priorities and create a leaner, more focused organisation";
  • Boeing recently announced a workforce reduction, which will focus on "consolidation of areas where we're not efficient". Mr Ortberg said the company needs to "continue to focus on reducing non-essential activity". [more - original PR]