Sept 20 (Askume) – Boeing Co (BAN) said on Friday the head of its troubled space and defense division will leave the company immediately under new Chief Executive Officer Kelly Ortberg’s first management change.
Ortberg, who took over in August, said Ted Colbert would resign and that the department’s chief operating officer, Steve Parker, would replace Colbert until a replacement was named later.
“At this critical time, our top priority is to restore our customers’ trust and meet the high standards expected of us to achieve our critical missions around the world,” Ortberg wrote in an email to employees. “We will continue to improve our performance and ensure we meet our commitments.”
Boeing’s space business has suffered, especially with NASA’s recent decision to send Boeing’s Starliner home without astronauts after years of mistakes . Boeing has lost $1.6 billion on Starliner since 2016, according to a Askume analysis of securities filings.
Colbert’s departure comes as BoeingIn an effort to save cash, it announced it would furlough thousands of white-collar workers as more than 32,000 employees went on strike.
Boeing also faced problems in January when Alaska Airlines’ new 737 Max 9 aircraft suffered a mid-flight emergency due to four missing key bolts.
In July, Boeing agreed to plead guilty to criminal fraud conspiracy charges and pay at least $243.6 million after violating a 2021 deferred prosecution agreement. The government says Boeing knowingly provided false information to the Federal Aviation Administration about critical 737 Max software.
The US Federal Aviation Administration (FAA) has tightened regulations on Boeing and banned it from producing more than 38 Max planes per month until the company makes significant improvements in quality and safety.
Only two years ago, Parker was appointed to a new operations management position to strengthen industry leadership and help address loss-making projects. He previously led Boeing’s bomber and fighter programs and the St. Louis defense plant.
“Historically, Boeing has had a strong reputation for its project management capabilities, and we need to ensure this continues going forward,” Ortberg wrote in a separate email to employees on Friday.
Ortberg said he learned more about “the future investments needed to remain competitive and define our future, as well as some of the obstacles our engineering first encountered in terms of quality and performance.”
Colbert, who previously worked at Citigroup and Ford Motor Co., joined Boeing in 2009 and will take over Boeing Defense and Space in April 2022 after the former defense secretary was removed.
The defense, space and security unit, one of Boeing’s three core businesses, will face billions of dollars in losses in 2023 and 2022, mainly due to what executives say are cost overruns on fixed-price contracts.
Margins on such contracts are high, but this makes defense contractors vulnerable to inflationary pressures, which have hurt US corporate profits in recent years.
Boeing has lost more than $2 billion over planned delays for two heavily modified Boeing 747-8 planes known as Air Force One. The 747-8 is designed to fly over the White House and is capable of flying in the most severe security scenarios, including nuclear war.
Boeing shares closed down about 1% on Friday and are down about 41% so far this year.
