Seattle, WA
Boeing's new CEO already seems to have given a major indication of where his priorities lie
The Seattle Times first reported that Ortberg has chosen to be based in Seattle, where Boeing was founded in 1916, and where it had its headquarters for over 80 years.
Both Reuters and industry publication The Air Current also reported that Ortberg plans to move to Seattle.
It’s an early sign that the former boss of Rockwell Collins will prioritize production quality over financial performance — a much-needed shift, especially in the wake of the Alaska Airlines blowout.
Boeing moved its headquarters from Seattle to Chicago in 2001 and then to Virginia in 2022. Most of its commercial planes are still manufactured in Washington state, with another facility in South Carolina.
In February, a Federal Aviation Administration investigation found “a disconnect between Boeing’s senior management and other members of the organization on safety culture.”
Later that month, The Seattle Times reported that Boeing’s board shut down a shareholder’s bid to move its headquarters back to Seattle.
When he takes over next Thursday, Ortberg will also have to contend with supply-chain disruption and certification delays for new jets like the 777X.
Boeing declined to comment when asked by Business Insider about Ortberg’s plans.
REUTERS/Lindsey Wasson
“It’s a good first step that the CEO will be based in Seattle, and now the rest of the headquarters needs to move back home to rejoin our world-class aviation workforce,” Maria Cantwell, a Washington senator who chairs the Committee on Commerce, Science, and Transportation, said in a Wednesday statement.
“When it comes to quality and safety, being close to the workforce on the ground matters,” she added.
Outgoing CEO Dave Calhoun last year faced criticism from employees after commuting to Boeing’s HQ by private jet, The Wall Street Journal reported. He was rarely seen in the office despite a crackdown on remote working, the report added.
After Calhoun announced his resignation in March, he acknowledged that Boeing has a “bad habit” of being too focused on speed at the expense of quality.
Airline bosses like Emirates’ Tim Clark had called on Boeing to appoint a new CEO with an engineering background.
Calhoun is an accounting graduate and former head of portfolio operations at Blackstone, whereas Ortberg has a mechanical engineering degree and over 35 years of experience in aerospace.
Courtesy of Boeing
“He knows full well that we’re in a recovery mode, and he knows full well we’ve got to complete the recovery mode, and we’ve got to get to stable and move forward,” Calhoun said of his successor in a Wednesday call related to the company’s second-quarter earnings.
“But I don’t think this is intended to be a large leadership overhaul,” he added.
The reports that Ortberg will be based in Seattle instead suggest a considerable change of tack.
Wall Street reacted positively to Ortberg’s appointment. Despite Boeing’s second-quarter earnings being lower than expected, the company’s stock rose 2% on Wednesday.
“We think Ortberg is a good pick, as his experience leading Rockwell Collins before and during its integration into RTX offer the qualities we think Boeing most needs going forward in a leader,” Nicolas Owens, an equity analyst at Morningstar, said in a note.
Ortberg has an “appreciation for the aerospace engineering and manufacturing process plus the ability to incentivize and foster continuous problem solving and collaboration on the shop floor,” Owens said
Even one of the planemaker’s biggest critics is on board with Ortberg, too.
“While this man is an industry insider, he does come from outside of Boeing and, on the face of it, has a well-regarded reputation in the industry,” said Bob Clifford, an attorney representing the families of 737 Max crash victims.
“Maybe he can bring the company back to the stature it once held before it criminally and preventively killed 346 people,” he added.