Kelly Ortberg, CEO of Boeing since August, gave a frank analysis of the internal issues facing the company during a general meeting on November 20. Among the highlighted topics, Ortberg pointed out problems with corporate culture, unnecessary expenses, and a lack of strategic focus, which threaten the aerospace giant’s position and survival.
In statements obtained by The Wall Street Journal, Ortberg criticized the presence of bloated management levels, superfluous expenses, and a workplace climate characterized by internal conflicts and avoidance of responsibility. «We spend more time arguing among ourselves than thinking about how to outperform Airbus,» he said.
To address these issues, the executive announced a redesign of the employee incentive program, aiming to align rewards across all business units and promote greater cohesion. Additionally, he stated that the thousands of layoffs currently underway are part of an effort to reduce bureaucracy and adjust the company’s structure to current business realities.
Financially, Ortberg detailed that Boeing lost billions of dollars and recently had to raise $24 billion through a stock sale to bolster its cash reserves. However, the company still faces challenges in achieving positive cash flow, which depends on increasing production of its 737 MAX to 38 units per month, a production target that has been delayed multiple times.
He also confirmed that the development of a new aircraft program is off the table in the short term due to a lack of resources, stating that it is not an immediate necessity. Ortberg further warned about the risks of a potential trade conflict with China, one of Boeing’s primary markets. During a recent conversation with President-elect Donald Trump, they discussed the potential effects of tariffs on the industry.
“Boeing has faced great highs and lows” Ortberg said from the company’s delivery center in Seattle. “We are at a low point, but we have the opportunity to move forward and improve”.
The company is also dealing with the consequences of incidents such as the detachment of a door panel on an Alaska Airlines 737-9 mid-flight and the failure of its Starliner space capsule. These issues have been partly attributed to a culture that neglects quality and safety in favor of speeding up production.
