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New Boeing CEO changes leadership and announces first departure
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New Boeing CEO changes leadership and announces first departure

Boeing Co. announced that Ted Colbert, who heads the company’s defense and space division, is leaving the company, marking the first 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 statement to employees on Friday. As Boeing’s CEO, Ortberg is expected to make sweeping management changes to get the troubled aerospace and defense company’s operations back on track.

The defense division was once a financial giant with stable numbers, but struggled with cost overruns on fixed-price contracts and was rocked by negative headlines related to the Starliner space capsule after NASA decided not to use it to transport two astronauts back from the International Space Station.

The restructuring comes a week after Boeing’s Chief Financial Officer Brian West said at an investor conference that the defense business would continue to weigh on earnings in 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 company’s delays and performance shortfalls. In a separate message on Friday, he reiterated that he would keep a close eye on the company’s commercial 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 top job in early August, taking the helm at a time when Boeing is trying to overcome a serious crisis of confidence as the company struggles to regain its footing after a near-catastrophic accident in January that exposed quality deficiencies in the factories that make commercial jetliners.

Boeing shares pared losses and rose less than 1 percent after the close in New York.

(Updated with CEO quote, details of management changes)

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