Boeing announced on Friday that the head of its troubled defense, space and security unit is leaving the company effective immediately. New Boeing CEO Kelly Ortberg made his first significant move since taking over in August, stating Ted Colbert would be departing from the planemaker and Steve Parker, the unit’s chief operating officer, would assume Colbert’s responsibilities until a replacement is named at a later date.
Taking over in August.
Boeing’s space business has experienced setbacks recently, most notably NASA’s decision to send its Starliner capsule home without astronauts after years of missteps. The Starliner capsule has cost Boeing $1.6 billion in overruns since 2016, according to a Reuters analysis of securities filings.
Starliner Capsule.
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,” Ortberg wrote in an email to employees. He added that he had learned “more about the future investments we need to make to be competitive and define our future, as well as about some of the more near-term hurdles engineering faces with first-time quality and execution.
Boeing’s defense, space and security unit is one of its three main businesses, having lost billions of dollars in 2023 and 2022. Executives attributed these losses largely to cost overruns on fixed-price contracts, which have high margins but leave defense contractors vulnerable to inflationary pressures that have dented US corporate earnings in recent years.
Colbert’s departure occurs as Boeing tries to save cash by announcing furloughs amid a strike involving more than 32,000 of its workers. The company’s shares closed down about 1% on Friday and have lost around 41% so far this year.
