I’m prepared to retire my phrase “the Boeing Problem,” which I first used last January after a series of problems that led the company into perilous situations.
For example, in 2018 and 2019, two 737 MAX 8 airliners crashed in Indonesia and Ethiopia, respectively, because of a software malfunction; a two-year, worldwide grounding of the new airliners followed. Then, the pandemic badly damaged airline travel.
Then, in January 2024, as my colleague Lauren Rosenblatt reported, a panel blew out on an Alaska Airlines 737 MAX 9 departing from Portland. The National Transportation Safety Board concluded last month that the blowout was the result of prolonged deficiencies at Boeing and the Federal Aviation Administration.
Just a year ago, the aerospace giant, once headquartered in Seattle, tapped a new CEO, Kelly Ortberg.
He’s nearly everything his predecessors weren’t: He isn’t an acolyte of the employee-hating Jack Welch of General Electric, as was the case with James McNerney.
Although McNerney’s successor Dennis Muilenburg was a Boeing insider, he continued many of McNerney’s blunders, such as the unnecessary 787 assembly in South Carolina.
Dave Calhoun, who followed Muilenburg and was forced out after the 2018-19 crashes, was another product of “Neutron Jack’s” toxic GE culture.
Ortberg chose to live in Seattle, bringing other members of senior management. He raised hopes that the company might return to the city of its birth.
Also, unlike McNerney, Ortberg isn’t overtly anti-union.
Last September, Boeing’s 33,000 Machinists walked out for eight weeks. When the strike ended, the Machinists won a 38% general wage increase over the next four years along with a $12,000 ratification bonus. Also, Machinists can decide how to divide the bonus between their paychecks and contributions to 401(k) accounts.
As The Seattle Times’ Rosenblatt reported, the walkout was slightly shorter than the 57-day strike in 2008.
How much credit Ortberg deserves for helping settle the Machinists walkout is open to dispute. He did get involved in negotiations and the strike was about one month into his tenure as CEO. But some observers argue as to whether he helped resolved it or if he should have done more.
Also, last fall, Ortberg announced a 10% reduction in the number of employees, affecting 17,000 employees of Boeing’s 170,000-strong workforce across the world. It wasn’t connected to the strike, nor was it clear how many Puget Sound region employees were cut.
As of December, the most recent numbers available, Boeing employed 67,567 in Washington, mostly in the Puget Sound region. This is far more than any other state.
The company ranks 63rd on the Fortune 500.
Ortberg “walked into a very difficult situation and did what needed to be done quickly,” said John Plueger, chief executive of aircraft lessor Air Lease. “It has boosted my confidence, and our company’s confidence, in Boeing and the path forward. I think he has his priorities right.”
Boeing shares are up 22% since January.
Beginning his career at Texas Instruments in 1983, Ortberg, 65, went on to aerospace supplier Rockwell Collins and became its CEO in 2013. He helped its integration with United Technologies and RTX — formerly Raytheon — before retiring in 2021.
In his first year, Boeing increased production of its popular 737 MAX. The company also pared its losses in the second quarter this year to $612 million, compared with a loss of $1.4 billion in the same period of 2024.
The defense side of the company also began a recovery, including winning a contract for the F-47, the U.S. Air Force’s next-generation fighter. Yet now the St. Louis-based division’s 3,200 Machinists are on strike.
The walkout is unlikely to affect the much-delayed KC-46 Air Force tanker being assembled in Everett or the P-8 Poseidon patrol and reconnaissance aircraft for the Navy being made in Renton.
Delays in producing a new 747 to serve as the next-generation Air Force One continue. Delivery is now set for 2027. Meanwhile, the Trump administration secured the “gift” of a 747 from Qatar.
Boeing and numerous other Washington companies are involved in Project Artemis, to eventually return to the moon and then Mars.
According to the Financial Times, Ron Epstein, a Bank of America analyst who once compared Boeing’s performance to a Greek tragedy, said that with Ortberg’s arrival “the narrative has changed. … Under (his) leadership, we are more confident (Boeing) can break the ‘doom loop’.”
But many challenges are still ahead for Ortberg.
Analysts hope that Ortberg’s experience as a supplier can help shape up the company’s supply chain issues. And, as one of the nation’s leading exporters, Boeing’s dealing with Trump’s threat of tariffs is an enormous challenge.
Worker satisfaction is another hurdle. In a survey of Boeing employees earlier this year, two-thirds of respondents said they were proud to work for the company, versus 91% in 2013.
Only 42% expressed confidence in the brass’s capabilities.
“It highlighted the gap between senior management in the company and the people working on the floor,” Ortberg said. “So, we’re going to go attack that.”
Ortberg told the Financial Times the contract with the Machinists guaranteed the union meetings with him and with the board’s safety committee.
New corporate values were unveiled in April.
Rich Plunkett, director of strategic development for Boeing’s engineering union, the Society of Professional Engineering Employees in Aerospace, said the survey results showed a company prioritizing lowering costs and sticking to its production schedule while gutting internal infrastructure to support employees.
“Kelly is saying the right words,” he told the Financial Times. “I wish it was moving a lot faster, but at least we’ve seen some movement in the right direction.”
Chief executives always get more credit than they deserve; but they set the tone and leadership of companies, for better or worse.
In an ideal world, Ortberg would return Boeing’s headquarters to Seattle and restore its culture of engineering excellence that was sullied by the merger with McDonnell Douglas.
The world is hardly perfect and never will be, but these would be constructive starts to retiring my phrase the Boeing Problem.
