Key Points
- Ted Colbert, head of Boeing’s space and defense unit, has left the company, marking the first leadership change under new CEO Kelly Ortberg.
- Boeing’s space division has faced setbacks, notably with NASA’s Starliner capsule, which has cost $1.6 billion in overruns since 2016.
- Boeing faces broader issues, including labor strikes, a criminal fraud charge, and quality concerns with the 737 MAX.
- Boeing’s defense and space unit has posted significant losses in recent years, and it faces challenges in delivering Air Force One retrofits.
Boeing announced on Friday that Ted Colbert, the head of its troubled space and defense unit, is leaving the company immediately. The management shift marks the first major leadership change under Boeing’s new CEO, Kelly Ortberg, who took over in August. Steve Parker, the current chief operating officer of the defense unit, will temporarily assume Colbert’s responsibilities until a permanent replacement is named.
In an email to employees, Ortberg emphasized the need to restore customer trust and improve Boeing’s performance, especially after the space unit has faced significant setbacks. “At this critical juncture, our priority is to restore the trust of our customers and meet the high standards they expect of us,” Ortberg wrote. Working together, we can and will improve our performance and ensure we deliver on our commitments.”
Boeing’s space business has struggled in recent years, most notably with NASA’s Starliner capsule, which was sent back to Earth without astronauts following multiple delays and technical problems. These issues have cost Boeing $1.6 billion in overruns since 2016. Colbert’s departure comes as Boeing continues to face pressure to cut costs, including furloughing thousands of white-collar workers amid a labor strike involving over 32,000 workers.
The company’s broader challenges are not limited to its space division. In January, a new Alaska Airlines 737 MAX 9 aircraft encountered a mid-air emergency due to missing bolts, further tarnishing Boeing’s reputation. In July, Boeing agreed to plead guilty to a criminal fraud conspiracy charge and pay $243.6 million after misrepresenting safety information to the Federal Aviation Administration (FAA) about key software for the 737 MAX. As a result, the FAA has restricted Boeing from expanding production of the MAX beyond 38 planes per month until quality and safety issues are resolved.
Parker, who joined Boeing’s defense unit two years ago, has been tasked with stabilizing the company’s industrial leadership and addressing problems in loss-making programs. Ortberg emphasized that Boeing needs to reclaim its reputation for managing large-scale projects, stating, “Historically, Boeing held a superior reputation for our ability to manage programs, and we need to ensure it remains a key differentiator for us in the future.”
Boeing’s defense and space unit has suffered billions in losses over the last two years, much of which has been attributed to cost overruns on fixed-price contracts. The company has also faced significant delays in delivering two retrofitted Boeing 747-8s for use as Air Force One. Boeing’s stock fell by 1% on Friday, bringing its total losses to 41% for the year.
