Kelly Ortberg, Boeing's new CEO, takes over

Aerospace veteran Robert “Kelly” Ortberg becomes BoeingFord's new CEO joined the company Thursday on a singular mission: restoring the reputation of an American manufacturing icon.

That massive goal will involve thousands of daily decisions that will determine whether Boeing can regain the trust of regulators, airlines and the public; end persistent production defects; deliver airplanes on time and consistently to customers large and small; and stop burning through cash.

That cash burn amounts to about $8 billion so far this year and rising. Meanwhile, Boeing shares are down 37% so far this year, through Wednesday.

Ortberg's first day includes a tour of Boeing's Renton, Washington, factory, where the 737 Max, Boeing's best-selling but troubled jet, is built. He plans to speak with employees and review safety and quality plans, and plans to make similar visits to other Boeing plants.

“I can't tell you how proud and excited I am to be a member of the Boeing team,” he said in a note to staff Thursday. “While we clearly have much work to do to rebuild trust, I am confident that by working together, we will return the company to the industry leader we all expect.”

Analysts and industry insiders are cautiously optimistic, describing Ortberg, 64 — a veteran of more than three decades of the industry who spent years running defense and commercial supplies company Rockwell Collins after rising through the ranks there — as a good listener with an engineering background (he has a degree in mechanical engineering). And perhaps most importantly, he is not part of Boeing.

“This guy has a fantastic reputation and level of industry expertise,” said Richard Aboulafia, chief executive of AeroDynamic Advisory. “He has a reputation for listening and letting people resist.”

Those skills will be key as Boeing tries to stabilize its production and eliminate manufacturing glitches.

Boeing's top safety executive for the commercial aerospace industry told a National Transportation Safety Board hearing earlier this week that the company is working on a design solution so that the near-catastrophic door stopper explosion it faced earlier this year never happens again.

The hearing was part of the NTSB’s investigation into the mid-air explosion of a door stopper on a crowded, months-old Boeing 737 Max 9 as it took off from Oregon. While no one was seriously injured in the crash, Boeing was back in crisis mode just as it was trying to move past two fatal crashes of its best-selling 737 Max jets in 2018 and 2019.

Testimony from workers at the NTSB hearing also highlighted the strain on manufacturing and frequent repairs to the planes, putting the spotlight on Boeing's factories.

“I will be transparent with you every step of the way, sharing news about progress and also where we need to do things better,” Ortberg said in the memo. He pledged to share reports with staff, “providing timely updates on what I see and hear on the ground from our teammates and our stakeholders.”

Last month, Boeing agreed to plead guilty to defrauding the U.S. government during Max certification, a deal that will require an independent corporate monitor of the company for three years.

But Ortberg will have to address problems not only in the commercial aircraft business, including the delayed certification of the new 737 and 777 models, but also in its defense unit.

That segment of the business is facing problems with two 747s that will serve as the next Air Force One aircraft but are years behind schedule. Meanwhile, the failure of Boeing’s Starliner capsule, which launched in early June, has NASA debating whether to use SpaceX instead to bring astronauts Butch Wilmore and Suni Williams back from the International Space Station.

A decision on whether to launch a new plane also looms as Boeing loses ground to rival Airbus.

The first 100 days of Ortberg's tenure as CEO will be crucial, said Bank of America aerospace analyst Ron Epstein.

“Decisions made early in his tenure will have generational impacts on the company,” he said in a note Monday.

Ortberg and his team will have to ensure Boeing’s workforce is trained, as there are thousands of new workers at factories after more experienced members took severance pay or were laid off during the pandemic. A union representing about 30,000 workers at Boeing factories in Washington state and Oregon is seeking raises of more than 40%, and last month members authorized a strike if a deal is not reached by September.

“Safety and quality principles should be as important as manufacturing rates,” Jon Holden, local president of the International Association of Machinists and Aerospace Workers, said in a statement last week. “This potential collaboration with the new CEO could be an excellent opportunity for Boeing to demonstrate its dedication to its workforce and recognize the exceptional manufacturing capability and skills of skilled IAM members on the shop floor.”

Last week, along with another quarterly loss, Boeing announced that Ortberg would replace Dave Calhoun, who had said in March that he would resign at the end of the year.

That was part of a broader executive shakeup after the door-stopper explosion. Calhoun himself took over an ailing Boeing in early 2020, replacing Dennis Muilenburg, who was ousted over his handling of the two Max crashes.

While Boeing is still based in Arlington, Virginia (where it announced it would move its headquarters in 2022 from Chicago), Ortberg will be based in the Seattle area, allowing him to keep a close eye on where the bulk of Boeing's commercial airplane production is based.

“In speaking to our customers and industry partners before today, I can tell you that, without exception, they all want us to succeed,” Otberg said in his first-day note to employees. “In many cases, they NEED us to succeed. This is a great foundation for us to build on.”

For Ortberg and the company, it’s important to get off to a good start with customers and the hundreds of suppliers who are suffering from the effects of the pandemic. Boeing’s relationships with its regular customers have taken a hit recently, and its leadership shakeup came after airline CEOs requested a meeting with the company’s board as plane delays piled up in the wake of the door stopper explosion.

Southwest Airlines is one of Boeing's biggest customers and, like other airlines, has scaled back its growth plans, citing delays in the delivery of new, more fuel-efficient Boeing planes. The airline's chief executive hinted at the big feat Ortberg has ahead of him.

“We look forward to working with Kelly Ortberg in her efforts to return Boeing to its place as America's leading aerospace company,” CEO Bob Jordan said in a written statement. “A strong Boeing is great for Southwest Airlines and great for our industry.”

— CNBC's Michael Sheetz contributed to this article.