Boeing names new CEO as it posts a loss of more than $1.4 billion in second quarter

Boeing on Wednesday named an aerospace industry veteran as its new CEO, taking over the reins of a company beset by legal, regulatory and manufacturing problems.

Robert “Kelly” Ortberg, former CEO of aerospace supplier Rockwell Collins, will succeed David Calhoun, 67, as CEO and president effective Aug. 8, the company said. Calhoun announced in March that he would retire at the end of the year.

Boeing named its new CEO after it reported a loss of more than $1.4 billion on falling revenue in the second quarter. The loss was wider and revenue lower than Wall Street had expected, as both Boeing’s commercial aircraft business and defense unit lost money.

The disappointing results come at a tumultuous time for Boeing. The company agreed to plead guilty this month on a federal fraud charge in connection with his 737 Max jet aircraft and two crashes that killed 346 people. The Federal Aviation Administration stepped up its scrutiny of the company after the eruption of a panel Concerns about production quality have arisen at an Alaska Airlines jet.

Boeing Chairman Steven Mollenkopf said Ortberg was selected after a “thorough and comprehensive search process” and “has the right skills and experience to lead Boeing into its next chapter.” Ortberg has built a reputation for running complex engineering and manufacturing businesses, Mollenkopf said.

The company removed Ortberg’s mandatory retirement age of 65, a spokesman said. Boeing did the same for Calhoun days after he turned 64 in 2021.

Ortberg only recently emerged as a leading candidate. Others reportedly considered for the job included Patrick Shanahan, a former Boeing executive and now CEO of the company’s main supplier, Spirit AeroSystems, and another longtime Boeing executive, Stephanie Pope, who recently took over the company’s commercial aircraft division.

Like Calhoun, who took over as CEO After the two Max crashes, Ortberg will take over the leadership of a company that is facing constant crises and criticism from both outside and inside. It is resisting whistleblower allegations of production abbreviations that endanger safety.

The company, based in Arlington, Virginia, is also struggling with supply chain issues that are hampering production. It hopes to address some of these issues by: reacquisition of Spirit AeroSystemsa major contractor. It is still trying to convince regulators to approve two new models of the Max and a larger version of its two-aisle 777 jet planeAnd it faces a multi-billion dollar decision about when to design a new single-aisle aircraft to replace the Max.

Quarterly earnings reported Wednesday reflect significant challenges at Boeing. The company reported a loss of $1.44 billion for the second quarter, compared with a loss of $149 million a year earlier.

Excluding special items, the loss was $2.90 per share. Analysts had expected a loss of $1.90 per share, according to a FactSet survey.

Revenue fell 15 percent to $16.87 billion, below Wall Street’s average forecast of $17.35 billion.

The commercial aircraft division posted an operating loss of $715 million and revenue fell 32 percent as Boeing delivered fewer passenger planes to airlines: 92 aircraft, compared with 136 a year earlier.

The FAA has limited Boeing’s production of Max jetliners since shortly after the Alaska Airlines incident, but Boeing has yet to meet the FAA limits as it seeks to improve its manufacturing process. The company said Wednesday that it is sticking to its plans to increase Max production to 38 per month by the end of the year.

Boeing has charged $244 million to cover a fine it agreed to pay as part of a agreement with the Ministry of Justice plead guilty to fraud in connection with the development of the Max. A federal judge in Texas will soon consider whether to approve the deal, which has been opposed by many families of the victims of the two Max crashes.

Boeing’s defense and aerospace unit lost $913 million after $1 billion in setbacks on four fixed-price government contracts, including a deal to build two new Air Force One presidential jets. The smaller services company earned $870 million.

Boeing shares rose 2% in premarket trading.