Boeing Co. announced Friday that the head of its embattled defense, space and security division is leaving the company effective immediately.
In her first major change since taking the job in August, Boeing's new CEO, Kelly Ortberg, said Ted Colbert would step down and that Steve Parker, the division's chief operating officer, would take over Colbert's duties until a successor is named at a later date.
Boeing's space business has suffered setbacks, most notably NASA's recent decision to send Boeing's Starliner spacecraft back to Earth without astronauts after years of failures.
Starliner has cost Boeing $1.6 billion in budget overruns since 2016, according to a Reuters analysis of securities filings.
“Boeing has historically had a strong reputation for program management capabilities, and we need to ensure that remains a key differentiator for our company,” Ortberg said in an email to employees.
He added, “We've learned more about the future investments we need to make to be more competitive and define our future, as well as some of the near-term challenges engineering faces with first-time quality and execution.”
Boeing's Defense, Space and Security division, one of its three major businesses, is expected to lose billions of dollars in 2023 and 2022, which executives say is largely due to cost overruns on fixed-price contracts.
While such contracts are highly profitable, defense contractors are vulnerable to inflationary pressures that have hit U.S. companies' profits in recent years.
Colbert's resignation comes at a time when Boeing is seeking to save cash by announcing layoffs amid a strike by more than 32,000 workers.
Boeing shares closed down about 1% on Friday and are down about 41% so far this year.
