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NEWSMAKER-New Boeing boss Kelly Ortberg brings engineering background, aerospace roots
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NEWSMAKER-New Boeing boss Kelly Ortberg brings engineering background, aerospace roots
Jul 31, 2024 8:38 AM

July 31 (Reuters) - Kelly Ortberg, the former Rockwell

Collins boss coming out of retirement to take the reins

of Boeing ( BA ), is known as an aerospace veteran with an

engineering background that contrasts with the troubled

planemaker's former leadership.

Ortberg will have a lengthy to-do list when he starts on

Aug. 8. He'll have to strengthen relations between Boeing ( BA ) and

the airlines that are its biggest customers, and earn trust with

the regulators and lawmakers that have put the company under a

microscope following a January 5 mid-air panel blowout that

turned into a full-blown safety crisis.

Ortberg has a background that threads a delicate needle.

He's a company outsider but an industry insider, which industry

officials said positions him as able to change the company's

culture without upending its aerospace roots.

But questions remained about whether he would drive radical

change favored by some politicians and industry analysts.

Bob Jordan, CEO of Southwest Airlines ( LUV ) said the

company looks forward "to working with Kelly Ortberg in his

efforts to return Boeing ( BA ) to its place as the leading American

aerospace company."

Ortberg became CEO of key aerospace supplier Rockwell

Collins in 2013 and steered the company's integration with

United Technologies and RTX until his retirement in 2021. He

also served as chair of the U.S. aerospace advocacy group

Aerospace Industries Association (AIA) during the COVID-19

pandemic.

"This is as clear a break from the past as you can imagine,"

said Richard Aboulafia, analyst at consultancy AeroDynamic

Advisory.

Industry insiders had previously hoped Boeing ( BA ) would hire

someone on the younger side, in the expectation that it will

take years to turn the company around. Ortberg is 64, however,

and Boeing ( BA ) said it waived the mandatory retirement age of 65

just like it did for CEO Dave Calhoun, who is departing after a

management shakeup earlier this year.

AeroDynamic Advisory analyst Kevin Michaels, who first met

Ortberg at Rockwell Collins in 1996, said Ortberg is

young-looking and energetic and he didn't see his age as a

barrier for the top job.

"We all thought that he retired too young," Michaels said.

Ortberg is said to have beaten out Boeing Commercial

Airplanes CEO Stephanie Pope and Spirit AeroSystems ( SPR ) boss

and former Boeing executive Pat Shanahan for the job.

"I think it's a positive," said one portfolio manager that

holds Boeing ( BA ) stock. "The narrative had been, 'I can't believe

only Boeing ( BA ) insiders wanted this job.'"

Boeing ( BA ) had faced pressure from industry executives and U.S.

lawmakers to choose new leadership with an engineering

background and without lengthy ties to the company. Whether that

is enough for lawmakers scrutinizing Boeing's ( BA ) operations remains

to be seen.

"Mr. Ortberg is a mechanical engineer. I hope that means he

will ensure that his top message for everyone is building the

best airplane means building the safest airplane in the world,"

said Rep Rick Larsen, top Democrat on the House Transportation

Committee who represents a district in Washington State home to

major Boeing ( BA ) operations.

Analysts and acquaintances described Ortberg as being a good

listener, honest and willing to take decisive action. "We

believe during his leadership at Collins he was well liked by

employees and direct reports and very personable," said

Jefferies analyst Sheila Kahyaoglu in a note.

"This was while being a tough negotiator dealing with a

diverse set of customers and suppliers and managing the

complexity of its diverse customer base."

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