Boeing Co. announced that Ted Colbert, who heads the corporate’s defense and space division, is leaving the corporate, marking the primary major personnel change for Kelly Ortberg since he took over as CEO last month.
Steve Parker, the COO of the defense division, will temporarily take over the helm of the struggling company until a successor is found, Ortberg said in a press release to employees on Friday. As Boeing’s CEO, Ortberg is anticipated to make sweeping management changes to get the troubled aerospace and defense company’s operations back on target.
The defense division, once a stable financial services provider, struggled with cost overruns on fixed-price contracts and was rocked by negative headlines in regards to the Starliner space capsule after NASA decided to not to make use of it to bring back two astronauts from the International Space Station.
The restructuring comes per week after Boeing’s Chief Financial Officer Brian West said at an investor conference that the defense business would proceed to weigh on earnings within the third quarter and that results would approach the $1 billion operating loss from the previous quarter.
Ortberg told employees several weeks ago that Pentagon leadership had expressed frustration over the corporate’s delays and performance shortfalls. In a separate message on Friday, he reiterated that he would keep an in depth eye on the corporate’s industrial and defense businesses in weekly operating reports.
“During this critical period, our priority is to restore our customers’ trust and meet the high standards they expect from us to enable their important missions around the world,” Ortberg said in announcing the personnel change. “Together, we can and will improve our performance and ensure we deliver on our commitments.”
Ortberg took the highest job in early August, taking the helm at a time when Boeing is attempting to overcome a serious crisis of confidence as the corporate struggles to regain its footing after a near-catastrophic accident in January that exposed quality deficiencies within the factories that make industrial jetliners.
Boeing shares pared losses and rose lower than 1 percent after the close in New York.
(Updated with CEO quote, details of management changes)
