In Renton, south of Seattle, Boeing has just increased 737 production from 42 to 47 aircraft a month, and the obvious question is: when will it reach 52?
Ortberg avoids giving a date. “We’re going to move when the production system tells us we’re ready,” he says. Then he draws a line: “We’re not going to force airplanes out the door if production isn’t stable. If we need to stop, we’ll stop.”
At Boeing, those words carry weight because of everything that came before. The congressional investigation into the two 737 MAX crashes showed how pressure over schedules and costs had influenced engineering decisions. For years, the company announced production targets and then did whatever it could to reach them. Ortberg is trying to reverse that order: first see what pace the factory can sustain, then raise the target.
The engineer who came out of retirement
Kelly Ortberg was born in 1960 in Dubuque, Iowa. He studied mechanical engineering at the University of Iowa and began working at Texas Instruments. Four years later, he joined Rockwell Collins as a program manager. He spent most of his career there, taking twenty-six years to become CEO in 2013. He later led the sale to United Technologies, went through the integration that created Collins Aerospace and stayed through the formation of RTX.
He retired in 2021. Three years later, when he was already out of the industry, Boeing called. He was 64 and agreed to come back to take charge of the company. Boeing was burning roughly US$8 billion a year, its shares had fallen 37%, and a strike involving 30,000 workers was approaching. One of his first decisions was to settle in Seattle, close to the factories, rather than at the company’s headquarters in Arlington, Virginia, where Boeing had moved its corporate offices in 2022. Ortberg chose to stay close to production. For an engineer arriving to run the company, it made fairly clear where he wanted to focus.
Two years later, Ortberg still avoids putting dates on things he cannot yet predict. Boeing has not resumed the annual guidance it suspended during the crisis, and when he was asked whether it would return before the end of the year, he said he had not decided yet. He has also refused to set a deadline for reaching the US$10 billion in free cash flow that the market is expecting. When a report suggested production could rise to 70 aircraft a month, he quickly corrected it: the target remains 63. Even the engine for Boeing’s next aircraft has not been decided, although the company has been studying GE’s open-fan system.
When he talks about fixed-price defense programs, which generated charges quarter after quarter for years, he falls back on the same caution: “They’re never done until they’re done.”
He is not declaring the recovery complete either. “I tell my team we still haven’t completely turned the corner,” he says.
The market is holding him to that. “Your stock has done nothing,” a journalist told him while pointing to a chart. Jim Cramer, in the same interview, congratulated him but admitted his impatience: he has been waiting for cash flow to take off. Ortberg answered with what amounted to a governing principle in one sentence: “We have to give our investors proof points.”
There are two commitments he does not control, and both are political.
One is Air Force One. In the second quarter, Boeing took an additional US$280 million charge on the program because of higher engineering costs needed to deliver the two presidential aircraft in 2028. When asked how important it was to deliver them before Trump left office, Ortberg was direct: “It’s very important to our customer that we deliver that airplane on time, and we’re going to put more resources on it to make sure we do that.” It is one of the few dates he has actually committed to, and that effort has already shown up in the quarter’s numbers.
The other front is China. During the presidential trip to Beijing, a commitment for 200 aircraft was announced, but there are still no signed contracts. Ortberg explains that the Chinese government first allocates that volume among individual airlines, and only then does Boeing negotiate with each one. “We’re in that process right now,” he says.
The airplane Boeing still cannot afford
The interesting part is that his caution also has a limit.
Ortberg believes the next major leap in manufacturing automation will not come from adding more robots to existing production lines. To automate properly, he says, the airplane has to be designed from the beginning with manufacturing in mind. The problem is that a successor to the 737 still faces two obstacles. The first comes from customers themselves: before thinking about a new airplane, they want Boeing to deliver the ones it has already sold them.
The other is cash. Asked whether Boeing could take on such a program today, Ortberg was fairly clear: “Probably not. From a financial standpoint, I’d say we need another couple of years while we increase production, improve positive cash flow and pay down debt.”
The problem is that everything is tied together. A new aircraft could improve efficiency, but Boeing first needs the money to develop it. To generate cash, it needs to produce more, and that brings it back to suppliers it does not control. On the 787, for example, GE engines are currently the limiting factor: Boeing is producing eight aircraft a month and wants to get to ten. Seats are also in short supply, and many second- and third-tier suppliers serve both defense and commercial aviation just as both markets are growing at the same time.
The numbers gave Ortberg some breathing room. In the second quarter, Boeing generated US$631 million in free cash flow, its first positive figure in more than a year. Revenue reached US$24.56 billion and the company delivered 171 aircraft, its best quarter since 2018. It also ended the period with a record backlog.
The company still posted a net loss of US$428 million and ended the quarter with US$45.9 billion in debt, although that figure was slightly lower than before. Even so, the market liked the results and Boeing shares rose nearly 5% that day.
His predecessor ultimately left after years in which Boeing promised production rates and deadlines it could not sustain. Ortberg is doing the opposite: he does not announce the next step until the factory shows it can deliver it. What remains to be seen is how much time Wall Street will give a man whose main virtue is refusing to say when.
te falto en español : Texto Alternativo (Alt Text): Título:
