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."