After being trapped in a quality crisis for more than half a year and experiencing a net loss increase of 212.54% year-on-year, the Boeing board of directors announced in advance on July 31 that it would replace the current CEO Calhoun, and be succeeded by former Rockwell Collins CEO Kelly Altberg as the company's new president and CEO.
According to the announcement in March this year, Calhoun was originally scheduled to resign as CEO at the end of 2024 and continue leading Boeing to complete key ongoing work before then. This is 5 months ahead of the previously planned schedule, and the new CEO, Otterberg, will take office on August 8th.
Boeing stated in the announcement that the board of directors has conducted a comprehensive and extensive search in the past few months to select the next CEO. Ottoberg has extensive experience in the aerospace industry, having built strong teams and operated complex engineering and manufacturing companies. We look forward to working with him to lead Boeing through this critical period in its long history, "the board said.
Boeing official website
Kelly Altberg stated that upon taking office, he will prioritize safety and quality and begin to undertake many tasks.
Affected by this news, Boeing's stock price immediately rose. According to Wind data, as of the close of July 31st local time, Boeing (BA. US) stock price rose 2% to close at $190.6 per share. In the past 5 days, the company's stock price has increased by 5.85%.
Engineer culture may return again
The 737MAX9 cabin door air detachment accident that occurred earlier this year was the direct cause of Boeing's management turnover. Since the accident, multiple regulatory agencies in the United States have been continuously scrutinizing Boeing, exposing quality control and quality issues with the 737 MAX aircraft.
Looking back at Calhoun's resume, it is not difficult to find that when he served as CEO of Boeing, the company was also in a critical moment. In October 2018 and March 2019, Boeing 737 MAX aircraft operated by Lion Air Indonesia and Ethiopian Airlines crashed, resulting in the death of all passengers on board. Subsequently, the 737 MAX was grounded globally, causing significant losses to Boeing.
At that time, in order to save its reputation and regain the trust of regulatory agencies, customers, and the public, Boeing demanded that the then CEO of Boeing, Michael Spielberg, resign from his position. On January 13, 2020, Dave Calhoun, the then chairman of the board, was appointed as the new CEO of Boeing. Unfortunately, the good times did not last long. After serving for five years, Calhoun voluntarily resigned due to quality control issues with the 737 MAX.
Due to repeatedly crossing the safety red line, Boeing has been criticized by the outside world for "losing its original intention" and abandoning its engineering culture in recent years.
Peter Robinson, a senior American journalist and writer, pointed out in his book "Blind Flight" that after Boeing acquired its competitor McDonnell Douglas in 1997, the pursuit of profit by capital replaced the previous culture of striving for excellence among engineers. The profit oriented approach has led Boeing to compress and simplify its management, research and development, and production, laying hidden dangers for future aircraft manufacturing quality and flight safety.
Judging from the background of the new CEO selected by the board of directors, Boeing seems to have a tendency to return to the engineering culture.
According to his resume, Kelly Otterberg holds a Bachelor's degree in Mechanical Engineering from the University of Iowa, is 64 years old, and has over 35 years of leadership experience in aerospace. He started working as an engineer at Texas Instruments in 1983; Joined Rockwell Collins as a project manager in 1987 and held increasingly important leadership positions within the company, ultimately becoming president and CEO in 2013; After five years at the helm of Rockwell Collins, he led the company's integration with United Technologies and RTX until retiring from RTX in 2021.
In addition, Ottoberg has held many important leadership positions in the industry, including director of RTX Corporation. He has also served as a director of Aptiv PLC, a vehicle system architecture technology company, and as chairman of the board of directors of the American Aviation Industry Association (AIA).
According to the American political magazine Newsweek, industry experts believe that the new appointment to Boeing "sends a strong message to the market and has the potential to help Boeing get back on track
Boeing suffered a performance Waterloo in the first half of the year
At the same time as announcing the new appointment, Boeing also disclosed its first half performance report. As expected, Boeing's revenue and net profit performance declined significantly throughout the first half of the year.
Financial data shows that Boeing's revenue decreased from $37.672 billion in the same period last year to $33.435 billion, a year-on-year decrease of 11%; In the first half of this year, a net loss of 1.794 billion US dollars was recorded, while the net loss in the first half of last year was only 574 million US dollars, an increase of 212.54% year-on-year; The operating cash flow has also turned from positive to negative. In the first half of last year, the operating cash flow was $2.557 billion, but in the first half of this year it has decreased to $-72.85 billion.
From the perspective of commercial aircraft delivery volume, Boeing delivered a total of 175 aircraft in the first half of this year, a decrease of 34% compared to 266 aircraft last year. Among them, 137 737 series narrow body aircraft were delivered, a decrease of 79 compared to last year; 22 787 series wide body aircraft were delivered, a decrease of 9 compared to last year. Correspondingly, commercial aircraft revenue also decreased by 31%, from $15.544 billion in the same period last year to $10.656 billion this year.
Boeing stated that the decrease in commercial aircraft revenue mainly reflects a reduction in delivery volume and an increase in research and development costs. In the second quarter, Boeing submitted a comprehensive safety and quality plan to the Federal Aviation Administration (FAA), planning to increase the production of 737 series aircraft to 38 per month by the end of the year and restore the production of 787 series aircraft to 5 per month by the end of the year.