Boeing’s CEO tells staff to stop ‘bitching by the water cooler’ and focus on beating Airbus
Kelly Ortberg took over the top job at embattled plane-maker Boeing a little over three months ago—and it appears he’s not massively impressed with some aspects of the company’s culture.
In an all-hands meeting this week, Ortberg gave his staff some brutal feedback, telling them to cut back on complaining and focus on beating competitor Airbus.
“Don’t sit at the water cooler and bitch about people,” Ortberg told his colleagues, according to a meeting recording obtained by The Wall Street Journal. “Let’s focus on the task at hand.”
The task at hand is quite a feat.
In the last few years, Boeing has faced a stream of lawsuits resulting in eye-watering payouts, been lambasted by airline CEOs for delivery delays of new craft, and begun a layoff process—all while negotiating strike action.
Ortberg urged staff to focus on beating its French plane-maker competitor Airbus instead of navel-gazing at its own issues.
“We spend more time arguing amongst ourselves than thinking about how we’re going to beat Airbus. 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,” he said.
Europe-based rival Airbus is, in contrast to Boeing, running a relatively smoother operation.
At the end of October the Blagnac-based business announced consolidated revenues up 5% year-on-year to €44.5 billion ($46.8 billion) and an order backlog of 8,749 craft.
That being said, orders are significantly reduced compared to the same period a year ago.
“We have an opportunity today to come racing out of where we are and to really improve,” Ortberg added.
According to the WSJ, Ortberg warned employees that the business is burning through billions of dollars and cannot turn to investors for help.
Moreover, Ortberg added that research and development spending might be delayed.
Boeing did not immediately respond to Fortune’s request for comment.
The task at hand for Boeing
Ortberg, the former CEO of Collins Aerospace, had quite a pile of problems when he became CEO and president of Boeing on August 8 of this year.
Top of the agenda is likely to have been the various lawsuits.
The Virginia-based airline avoided a trial in July after it pled guilty to fraud charges which stemmed from two crashes of 373 Max jetliners.
The crashes killed 346 people in Indonesia and Ethiopia, and per AP, Boeing was also ordered to pay a $243.6 million fine.
Further class-action lawsuits relate to the Alaska Airlines incident in which a door plug blew out of a 737-Max 9 jet mid-flight in January.
Both Boeing and Alaska Airlines have denied any liability for damages alleged by the passengers.
Next on Ortberg’s to-do list is likely repairing relationships with the bosses of Boeing’s most prominent clients.
American Airlines CEO Robert Isom has been among the critics of Boeing’s recent performance.
He told CNBC last month he was looking forward to the company getting back on track: “For Boeing—it’s just, I look forward to the day where they’re not just a distraction. We’ve been struggling with them for—you know, over the last five years.”
Isom added: “We need Boeing to be strong, and that’s what I’ve told Kelly. At the end of the day though, we need them to deliver quality aircraft on time, and I’ll be welcoming that phone call when Boeing says: ‘We’re going to do that.’”
Likewise, Ryanair CEO (and longtime Boeing customer) Michael O’Leary spoke sharply about the plane manufacturer.
For the last two years “we were finding little things, like spanners under floorboards, in some cases, seat handles missing, things like that,” O’Leary told CNN in March.
The incidents, he said, show “a lack of attention to detail” and “quality issues at Boeing.”
More positively, Alaska Airlines CEO Ben Minicucci said he had seen “significant improvements” at Boeing under Ortberg’s leadership.
Minicucci said he spoke with the Boeing CEO after his appointment and praised him as a seasoned aerospace expert who “has identified the problems at Boeing that need to be fixed.”
