According to the Smart Finance App, Boeing (BA.US) announced on Friday that Ted Colbert, the troubled Defense and Space Division Chief, will resign immediately. This is a major personnel change that has occurred for the first time since the new CEO, Kelly Ortberg, took office.

Ortberg, who took office in August this year, stated that Colbert will step down and Steve Parker, the Chief Operating Officer of the division, will assume Colbert's responsibilities until a successor is appointed later.

It is reported that Colbert joined Boeing in 2009 after working at Citigroup and Ford Motor. After the former Defense Director was dismissed, he took over the Defense and Space Division at Boeing in April 2022.

In an email to employees, Ortberg wrote, "At this critical moment, our top priority is to regain the trust of our customers and meet their high standards in order to help them complete critical missions around the world. Through our joint efforts, we can and will improve our performance and ensure that we fulfill our commitments".

Boeing's space business has suffered major setbacks, particularly with NASA's recent decision to have Boeing's Starliner return to Earth without crew after years of mistakes.

As Colbert leaves, Boeing is trying to save money by announcing temporary layoffs for thousands of white-collar employees while more than 0.032 million employees are on strike.

In January this year, a Boeing 737 MAX 9 aircraft encountered an in-flight emergency, and Boeing is now facing a major crisis.

The Federal Aviation Administration of the United States has strengthened its supervision of Boeing and prohibited it from increasing the production of MAX aircraft to more than 38 aircraft per month until it makes significant improvements in quality and safety.

In another email to employees on Friday, Ortberg wrote, "Historically, Boeing has enjoyed a reputation for project management expertise, and we need to ensure that this remains a key advantage for us in the future."

The Defense, Space, and Security division, one of Boeing's three major businesses, reported losses of billions of dollars in 2023 and 2022, largely attributable to cost overruns on fixed-price contracts.

While such contracts are highly profitable, defense contractors are vulnerable to inflationary pressures. In recent years, inflation has eroded the profitability of American corporations.

Boeing's stock price fell about 1% on Friday and has already fallen by 41% this year.