Boeing’s space and defense chief steps out in new CEO’s first executive move

By Joe Brock, David Shepardson and Tim Hepher

(Reuters) – Boeing said on Friday that the head of its troubled space and defense unit is leaving the company effective immediately, in the first leadership change under new CEO Kelly Ortberg.

Ortberg, who took over in August, said Ted Colbert will leave and Steve Parker, the unit’s chief operating officer, will assume Colbert’s responsibilities until a replacement is named at a later date.

“At this critical time, our priority is to restore our customers’ trust and meet the high standards they expect from us to enable their mission-critical worldwide,” Ortberg wrote in an email to employees. “Working together, we can and will improve our performance and ensure we deliver on our commitments.”

Boeing’s space business has suffered significant setbacks, most notably NASA’s recent decision to send Boeing’s Starliner capsule home without astronauts, which followed years of missteps. The Starliner has cost Boeing $1.6 billion in overruns since 2016, according to a Reuters review of securities filings.

Colbert’s departure comes as Boeing has tried to save money by announcing layoffs for thousands of white-collar workers amid a strike by more than 32,000 of its workers.

Boeing also faced significant problems after a new Alaska Airlines 737 MAX 9 suffered a mid-air emergency in January after it was missing four key bolts.

In July, Boeing agreed to plead guilty to a charge of criminal conspiracy to defraud and pay at least $243.6 million after violating a deferred prosecution agreement from 2021. The government said Boeing had science false statements to the Federal Aviation Administration regarding key software for the 737 MAX.

The FAA has tightened oversight of Boeing and barred it from expanding MAX production beyond 38 planes a month until it makes significant improvements in quality and safety.

Parker was brought in to support industrial leadership and help fix loss-making programs with a new operational management role just under two years ago. He previously ran Boeing’s bomber and fighter programs, as well as its defense plants in St Louis.

“Boeing has historically had a superior reputation for our ability to manage programs, and we must ensure that remains a key differentiator for us going forward,” Ortberg wrote in a separate email to employees on Friday .

Ortberg added that he learned “more about the future investments we need to make to be competitive and define our future, as well as some of the near-term hurdles facing first-time quality and execution engineering.” .

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Colbert, who joined Boeing in 2009 after working at Citigroup and Ford Motor, took the reins at Boeing Defense and Space in April 2022 after the former defense chief was fired.

Boeing’s defense, space and security unit, one of its three core businesses, lost billions of dollars in 2023 and 2022, which executives attributed largely to cost overruns on fixed-price contracts.

Such contracts carry high margins but leave defense contractors vulnerable to inflationary pressures that have hurt U.S. corporate earnings over the past few years.

Boeing has lost more than $2 billion on its delayed schedule to deliver two heavily upgraded Boeing 747-8 jets for use as the US presidential aircraft known as Air Force One.

Boeing shares fell about 1% on Friday and have lost about 41% so far this year. (This story has been re-uploaded to correct a typo in paragraph 12)

(Reporting by Utkarsh Shetti in Bengaluru, David Shepardson in Washington and Joe Brock in Los Angeles; Editing by Shounak Dasgupta, Marguerita Choy and Shri Navaratnam)