Boeing head of troubled defense, space unit to depart immediately

By Joe Brock and David Shepardson

(Reuters) -Boeing said on Friday the head of the company’s troubleddefense, space and security unit is leaving the planemaker effective immediately.

New Boeing (NYSE:BA) CEO Kelly Ortberg in his first significant move since taking over in August, said Ted Colbert would be leaving and Steve Parker, the unit’s chief operating officer, would assume Colbert’s responsibilities until a replacement is named at a later date.

Boeing’s space business has suffered setbacks, notably NASA’s recent decision to send Boeing’s Starliner capsule home without astronauts that followed years of missteps.

Starliner has cost Boeing $1.6 billion in overruns since 2016, according to a Reuters analysis of securities filings.

“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 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, one of its three main businesses, has lost billions of dollars in 2023 and 2022, which executives attributed in large part to cost overruns on fixed-price contracts.

Such contracts have high margins but leave defense contractors vulnerable to inflationary pressures that have dented U.S. corporate earnings in the last few years.

Colbert’s departure comes at a time when Boeing has been trying to save cash by announcing furloughs amid a strike by more than 32,000 of its workers.

Boeing’s shares closed down about 1% on Friday and have lost about 41% so far this year.