How Kelly Ortberg dug Boeing out of a 'very deep hole'

In his first year in charge, Boeing’s CEO Kelly Ortberg has dug the company out of a “very deep hole,” an aviation insider told Business Insider.

But Ortberg has said the company still has a lot of work to do.

In an earnings call last Tuesday, he compared the job to maneuvering a large ship. “I think that we’re turning it, I don’t think it’s turned,” he said.

He took the helm on August 8, 2024, in one of the most challenging years in Boeing’s history. The company was grappling with a crisis sparked by the blowout on an Alaska Airlines 737 Maxwhich lost a door plug in midair last January.

It made an emergency landing, and eight people were injured. Investigators found the plane had left Boeing’s factory missing key bolts designed to secure the panel.

Regulators were stringent given the Max’s history: 346 people died in two crashes in 2018 and 2019. The FAA temporarily grounded planes and capped Boeing’s production of the type to 38 a month.

Rob Britton, adjunct professor at Georgetown University’s McDonough School of Business and a former American Airlines executive, told BI that Ortberg took the job when the company was “in a very deep hole.”

“In some respects, the hole got a little bit deeper, but he’s been able to dig out really, really well,” Britton added.

Boeing declined to comment on Ortberg’s first year when asked by Business Insider, instead pointing to the CEO’s remarks on its latest earnings call.

After announcing his resignation last March, former CEO Dave Calhoun said Boeing needed to “slow down” as it had a “bad habit” of focusing on production speed instead of quality.

Ortberg, the 65-year-old former Rockwell Collins chief, came out of retirement to take over.

Britton said the choice of an engineer over “a finance person” — Calhoun is a former Blackstone executive with an accounting degree — was encouraging. “Engineers can learn finance, but finance people cannot learn engineering,” he added.

Ortberg spent his first day touring the 737 Max factory in Renton, just outside Seattle. “That’s an optics thing, but you have no idea how much that means to people who are on the front line,” Britton said.

Ortberg also won plaudits by relocating to Seattle, Boeing’s manufacturing hub, rather than its corporate headquarters near Washington, DC.

Ortberg also outlined a four-point plan: change the culture with more leaders on factory floors, stabilize the business, improve discipline, and build a new future.

It didn’t take long for his first major challenge to arise.

In mid-September, 30,000 workers went on strike at factories in the Seattle area, shutting down production of the cash-cow 737 Max.

Boeing stock tumbled as the company hemorrhaged money. Ortberg forbade executives from traveling by private jet and cut 10% of the workforce.

But the company raised $35 billion through a credit agreement and a share offering. After seven weeks on strike, workers won a pay increase of 38% over four years.

737 Max production didn’t restart until December, but it was evident the tide had changed. The stock is up a third since Ortberg’s arrival.

“They completed a pay increase of 40%, so morale has improved significantly,” Ryanair CEO Michael O’Leary said in a July earnings call.

“The quality of what’s getting delivered is now top-notch,” he added, saying he was “much more bullish” on Boeing.

The Irish budget airline is Europe’s biggest carrier and a major Boeing customer, as it only flies 737s. It expects to receive its first Max 10s, which are yet to be certified, in 2027.

Donald Trump and tariffs

As one of America’s top exporters by dollar value, navigating tariffs has been a key priority.

In June, China started accepting Boeing planes again, having returned some when trade tensions bubbled over. Trump’s deals with the UK, European Union, and Brazil have all included exemptions for aviation exports.

Despite his criticism of Boeing due to delays to the new Air Force One, Donald Trump patted Ortberg on the back at a signing ceremony in May for Qatar Airways’ $96 billion order of 130 787 Dreamliners and 30 777-9s. It was Boeing’s largest ever for wide-body aircraft.

This year hasn’t been without its troubles.

Ortberg pulled out of June’s Paris Air Show, the industry’s biggest gathering, following the fatal crash of Air India Flight 171 days before the event.

A preliminary report the next month focused on the pilots’ actions rather than a problem with the airplane or its GE engines.

Two main tests remain: certifying new jets and ramping up production of the Max.

Last October, Ortberg announced that the hotly anticipated 777X would be further delayed to 2026.

“I fail to see how Boeing can make any meaningful forecasts of delivery dates,” Emirates President Tim Clark said in response, adding that he planned a “serious conversation” with the planemaker.

However, a fifth 777X started flight tests on Tuesday. It was the first to be built in nearly five years, and a sign of progress.

Two new variants of the Max are also years behind schedule.

Boeing needs permission to boost Max production

After reaching the FAA’s 38-a-month cap in May, Boeing’s next goal is to get permission to increase that, first to 42, and then in increments of five. It was producing 52 monthly until the 2019 Ethiopian Airlines crash.

Boeing stock dipped about 4% after July’s second-quarter earnings call, when Ortberg said he expects to request the first approval “in the coming months.”

Bank of America analysts wrote that investors expected “much more aggressive 737 production rate increase by 3Q.”

But they added, “Despite the noise, we appreciate the discipline and see further upside ahead.”

Deutsche Bank analysts said they found Ortberg’s comments about the rate increase “a bit more cautious” than expected.

But Ortberg has said he’s steadily stabilizing a company that can’t afford to gamble on quality.

“My role here is just to help everybody get organized and headed in the right direction,” he said on the call.