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Robert “Kelly” Ortberg faces a long to-do list as Boeing’s new chief executive: a possible labor strike next month, improving quality and stabilizing commercial airplane production, rebuilding relationships with customers and regulators, and keeping Boeing’s credit rating above junk territory.
The 64-year-old veteran aerospace executive has come out of retirement to take the reins of Boeing from August 8, and will also join its board of directors.
His appointment comes after the storied manufacturer pleaded guilty to a criminal charge, admitting it misled U.S. regulators about a flight control system that caused two fatal 737 Max crashes. It is also struggling to improve safety and quality processes in production after a door panel exploded on a commercial flight in January.
Ortberg held a series of senior positions at avionics maker Rockwell Collins, serving as its chief executive for five years until its $30 billion sale to United Technologies.
The board selected him over Other potential candidatesincluding Pat Shanahan, chief executive of supplier Spirit AeroSystems, and Stephanie Pope, who started as head of Boeing’s commercial airplane business earlier this year.
He will receive an annual base salary of $1.5 million, as well as incentives for next year valued at $20.5 million, according to a regulatory documentThis year, Ortberg will receive $1.25 million in cash and other compensation valued at $16 million.
Boeing needs “a big reset,” said Kevin Michaels, chief executive of AeroDynamic Advisory, who worked with Ortberg at Rockwell Collins in the 1990s. While he expressed optimism about Ortberg’s ability to meet the challenge, “he’s obviously entering a cultural spiral,” Michaels said.
Ortberg was born in Dubuque, Iowaand graduated from the University of Iowa in 1982 with a degree in mechanical engineering. He moved to the Southwest to work as an engineer at Texas Instruments before returning to his home state in 1987 to work as a program manager at Rockwell Collins.
At Rockwell Collins, Ortberg helped land work on Boeing’s 787 Dreamliner after competitor Honeywell beat out the company to become the leading supplier of avionics for the 777, said Melius Research analyst Robert Spingarn. He reinvented software-based avionics rather than hardware-based avionics so that “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 planes and airlines and improved the company’s return on investment.
“He’s an engineer and a consensus builder who knows how to sell a product vision,” Spingarn said.
Ron Corbett, vice president of economic development for the Cedar Rapids Metropolitan Economic Alliance, said city residents were concerned about job losses in the wake of the Rockwell Collins sale. Ortberg “was trying to do everything he could 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. He now plans to move to Seattle to run Boeing, which has been criticized for moving its corporate headquarters away from its factories, first to Chicago and then to Arlington, Virginia.
Jon Holden, president of the International Association of Machinists District 751, the union negotiating a new contract for Washington state workers who build Boeing planes, called the decision Appoint a Seattle-based CEO “A step in the right direction.”
Rich Plunkett, director of strategic development for the union that represents Boeing engineers, said he looked forward to working with Ortberg “in the 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 minimized.”
Boeing needs a “company doctor,” said analyst Nick Cunningham of Agency Partners, akin to Louis Gallois, the veteran French industrial executive and corporate problem-solver who was recruited to run EADS, the former parent of Airbus, nearly two decades ago. Cunningham said Ortberg “recalled” similar qualities in Rockwell Collins, coming across as “easy-going, charismatic and not overly bombastic.”
Chuck Hammond, owner and chief executive of Cedar Rapids-based manufacturer Raining Rose, doesn’t know Ortberg as the head of a publicly traded company, but rather as a friend of nearly three decades. Hammond described Ortberg as “the kind of guy who doesn’t give a damn.”
Early in their careers, Hammond once asked Ortberg if he thought it was important to meet one-on-one with employees without an agenda. Ortberg was “a no-nonsense guy,” so he was surprised to learn that he thought one-on-one meetings were critical.
“He was clearly engaged with the people he worked with and wanted to learn from them,” Hammond said.
He doesn’t quite understand why his friend wants to take over a company with such big problems, but he thinks it might be because he wants to make a difference.
“It’s a calling,” he said. “It seems like the good side won out by putting someone like that in charge of a company like that. I still don’t fully understand it, but I appreciate what he’s doing.”