Boeing’s new CEO shakes up management and announces first departure

Steve Parker, chief operating officer of the defense unit, will take over the struggling business on an interim basis until a replacement is found, Ortberg said in a message to employees on Friday. As Boeing’s leader, Ortberg is expected to make sweeping management changes as he works to turn around the embattled defense and aerospace company’s operations.

Once a steady financial performer, the defense division struggled with cost overruns on fixed-price contracts and was hit by negative headlines for the Starliner space capsule after NASA opted not to use it to bring two astronauts back from the Space Station International.

The change comes a week after Brian West, Boeing’s chief financial officer, said on a conference call with investors that the defense business would hurt profits again in the third quarter, with results set to approach a $1 billion operating loss recorded in the previous quarter.

Ortberg told employees several weeks ago that Pentagon leaders had expressed frustration with the company’s delays and performance shortfalls. He reiterated in a separate message on Friday that he would closely monitor the company’s commercial and defense activities in weekly operational reviews.

“At this critical time, our priority is to restore the trust of our customers and meet the high standards they expect from us to enable their critical missions around the world,” Ortberg said in announcing the personnel change. “Working together, we can and will improve our performance and ensure we deliver on our commitments.”

Ortberg assumed the top job in early August, taking the helm at a time when Boeing is struggling to overcome a severe crisis of confidence. The company has struggled to regain its footing after a near-catastrophic accident in January that exposed quality deficiencies at its factories that make commercial jets.

Boeing pared losses and rose less than 1 percent after trading in New York.

(Updates with CEO quote, details on management changes)