After his recent appointment to the role of Boeing CEO, Kelly Ortberg was quick to demonstrate an ability to speak “hard truths” to his workforce in search of commitment to the company’s cause.

Ortberg Expresses Frustrations With Corporate Culture at Boeing

On November 20, while the global aerospace company continued to carry out cost-cutting measures poised to eliminate thousands of jobs, Ortberg expressed his frustrations at their Seattle-area production plant. According to The Wall Street Journal, Ortberg met with the plant’s employees in an all-hands meeting that Wednesday.

“Don’t sit at the water cooler and b**** about people,” Ortberg reportedly said. “Everybody is tired of the drumbeat of ‘what’s wrong with Boeing.’ I’m tired of it, and I haven’t been here that long… Let’s focus on the task at hand.

A CEO Who Needs to Turn Things Around

Ortberg joined Boeing as its CEO as part of the company’s last-ditch effort to turn things around after an onslaught of safety incidents and their financial impact. Ortberg has extensive experience in the aviation industry, a background in engineering, and a penchant for consulting employees on the ground. The company is hoping for someone who won’t prioritize short-term gains over the quality of their product, but the task is a significant undertaking.

The Beginning of Boeing’s Decline in 2024

Since January of this year, Boeing has been on a financial decline that warranted Ortberg’s hard truths. It began when a side panel blew out from one of the company’s best-selling 737 MAX planes, drawing inquiries from the Federal Aviation Administration (FAA). The subsequent investigations found major safety concerns in the company’s manufacturing process linked to mechanical issues faced by airlines. Despite being blamed for 737 MAX accidents in 2018 and 2019 which resulted in 346 deaths, the company had apparently made no changes in that time.

Demanding a reform plan to resolve these issues, the FAA placed a cap on Boeing’s production. This has resulted in $39 billion in losses during 2024. In September, the company’s woes were compounded by a Boeing machinists’ strike which lasted for two months and cost nearly $1 billion each week. The strike ended with workers securing a nearly 40% pay increase under a new contract, though Boeing’s debt has reached $60 billion.

The Impact of Boeing’s Cost-Cutting Plans

The company’s cost-cutting plan took effect even before the end of the strike, which plans to eliminate upwards of 17,000 jobs. 

“We spend more time arguing among ourselves than thinking about how we’re going to beat Airbus,” Ortberg said. “We have an opportunity to come racing out of where we are and really improve.”

Targeting White-Collar Staff Rather Than Production

Critically, Boeing’s layoffs have mostly affected the company’s white-collar staff as opposed to production workers. It would seem that, by focusing on manufacturing, Ortberg aims to turn the aerospace company around. After all, the company can only sell planes if it fixes the technical issues and actually builds new models. 

While they may have gone on strike a few months ago, machinists and assembly workers are needed to restore production levels and integrate necessary safety improvements required by the FAA. In addition, the salary of white-collar staff would have a greater impact on Boeing’s finances despite the pay increase won by striking workers, making a focus on manufacturing the pragmatic way forward.

A Committed Workforce Will Be Necessary

Above all, Ortberg will need commitment from his staff to move the company forward. He plans to begin this process by introducing a uniform performance enhancement system across the company, promoting equal treatment for workers at all levels. With shared commitment and a restored corporate culture, Ortberg’s hard truths will hopefully lead to an improved safety record and the removal of the FAA’s production cap as the business recovers from the turbulence of recent years.