Boeing (BA.US) CEO's first major move: "Firing" the head of the defense and space unit

Boeing (BA.US) said on Friday that Ted Colbert, head of its struggling defense and space unit, will leave immediately, the first major shake-up since new CEO Kelly Ortberg took over.

Ortberg, who took over in August, said Colbert would leave and Steve Parker, the unit's chief operating officer, would take over until a replacement is named later.

Colbert, who joined Boeing in 2009 after stints at Citigroup and Ford Motor, took over the defense and space unit in April 2022 after its former head was ousted.

Ortberg wrote in an email to employees: "At this critical moment, our top priority is to regain the trust of our customers and meet their high standards to help them complete their critical missions around the world. Together, we can and will improve our performance and ensure we deliver on our commitments."

Boeing's space business has suffered major setbacks, especially after NASA recently decided to send Boeing's Starliner back to Earth without astronauts after years of mistakes.

Colbert is leaving as Boeing tries to save money by putting thousands of white-collar workers on temporary leave amid a strike by more than 32,000 workers.

Boeing faced a major crisis in January after an emergency landing of a 737 MAX 9.

The Federal Aviation Administration has stepped up oversight of Boeing and barred it from increasing production of the MAX above 38 a month until it makes major improvements in quality and safety.

Ortberg wrote in another email to employees on Friday: "Historically, Boeing has been known for its project management capabilities, and we need to ensure that remains a key advantage for us in the future."

The defense, space and security unit, one of Boeing's three main businesses, lost billions of dollars in 2023 and 2022, and executives blamed much of it on cost overruns on fixed-price contracts.

Such contracts are highly profitable but defense contractors are vulnerable to inflationary pressures, which have weakened corporate profits in the past few years.

Boeing shares closed down about 1% on Friday, bringing the year-to-date loss to 41%.