- Boeing’s CEO revealed a 4-part turnaround plan on Wednesday.
- In a memo to employees, he promised improved culture and better execution.
- The struggling planemaker is facing a machinists strike that could end Wednesday.
Boeing’s new CEO shared a memo with employees on Wednesday laying out his plan to turn around the struggling planemaker.
Kelly Ortberg, who took over in August, said “trust in the company has eroded,” that it’s “saddled with too much debt,” and has had “serious lapses in performance.”
But he said customers want the company to succeed and “with the right focus and culture, we can be an iconic company and aerospace leader once again.”
To do that, he shared a four-pronged plan:
-
Change the company’s culture.
Ortberg, who spent two decades working for one of Boeing’s key suppliers, RTX, emphasized the need for Boeing leaders to be more connected with their people and products to “prevent the festering of issues and work better together to identify, fix, and understand root cause.”
“We need to be on the factory floors, in the back shops and in our engineering labs,” he said. “We need to know what’s going on, not only with our products, but with our people.”
Ortberg added that he’s working to change operating process at Boeing to keep leaders accountable.
-
Stabilize the business.
“We have some really big rocks that we need to get behind us to move the company forward,” Ortberg said.
His primary focus is ending a machinists’ strike. Results of the union’s vote on the latest contract proposal are expected to come Wednesday evening.
“We have been working feverishly to find a solution that works for the company and meets our employees’ needs,” he said.
Once the strike is over, Boeing’s next focus will be restarting its factories and supply chain with an emphasis on its safety and quality control systems, he said.
-
Improve execution discipline.
Ortberg said Boeing needs to better understand and manage the risks of its aircraft programs. This ranges from managing expectations to improving supply chain management.
-
Build a new future for Boeing.
“Boeing is an airplane company and at the right time in the future we need to develop a new airplane,” he said. “But we have a lot of work to do before then.”
He said the while the company is “consumed with the challenges of today,” it can lay the foundation for its future by resetting priorities and creating a leaner, more focused organization.
“This is a big ship that will take some time to turn, but when it does, it has the capacity to be great again,” he said.
Boeing on Wednesday reported a net loss of $6.1 billion in the third quarter of 2024. Revenue increased 5.8% to $17.84 billion, which was slightly lower than analyst expectations.
Read the full article here
