Boeing’s Space and Defense Chief Departs in New CEO’s Initial Executive Decision, According to Reuters

Leadership Change at Boeing’s Space and Defense Division

By Joe Brock, David Shepardson, and Tim Hepher

Boeing announced on Friday that the head of its struggling space and defense division is leaving the company immediately, marking the first major management shift under new CEO Kelly Ortberg.

Ortberg, who assumed the CEO role in August, confirmed that Ted Colbert would step down. In the interim, Steve Parker, the division’s chief operating officer, will take over Colbert’s duties until a permanent replacement is appointed.

"In this critical moment, our focus is on rebuilding trust with our customers and meeting the high standards they expect to support their essential missions globally," Ortberg stated in an internal email to employees. "We can and will enhance our performance and fulfill our commitments by working together."

Boeing’s space segment has faced serious challenges, particularly after NASA opted to return Boeing’s Starliner capsule without astronauts, a consequence of years of errors. Since 2016, the Starliner project has resulted in Boeing incurring $1.6 billion in cost overruns.

Colbert’s exit comes amidst Boeing’s steps to cut expenses, including furloughing thousands of white-collar employees while dealing with a strike from over 32,000 workers.

The company has also encountered significant issues, such as a recent mid-air emergency involving a new Alaska Airlines 737 MAX 9, which was missing four critical bolts.

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

In response, the FAA has tightened its oversight of Boeing and prohibited it from increasing production of the MAX beyond 38 planes each month until substantial quality and safety improvements are implemented.

Parker, who joined Boeing nearly two years ago to strengthen industrial leadership and address unprofitable programs, has previous experience leading Boeing’s bomber and fighter programs and overseeing its defense facilities in St. Louis.

Ortberg emphasized in a separate email to employees that maintaining a stellar reputation for program management must remain a core strength for the company moving forward. He also noted the need for future investments to enhance competitiveness while recognizing immediate challenges related to engineering quality and execution.

Colbert, who joined Boeing in 2009 after stints at Citigroup and Ford, began leading Boeing Defense and Space in April 2022 following the removal of his predecessor.

Boeing’s defense, space, and security sector, one of its primary business areas, reported losses exceeding billions in both 2023 and 2022, largely due to cost overruns on fixed-price contracts. Such contracts, while typically lucrative, expose defense contractors to inflationary pressures that have adversely affected U.S. corporate profitability in recent years.

The company has suffered more than $2 billion in losses related to delays in delivering two heavily modified Boeing 747-8s intended for use as U.S. presidential aircraft, known as Air Force One. These aircraft are designed to function as an airborne command center during critical security scenarios.

Boeing’s stock price fell about 1% on Friday, reflecting a 41% decrease so far this year.