Vought Aircraft Industries Inc. seems to have weathered some turbulence.

Now the company is just hoping for a smooth landing.

For that to happen, Vought will have to complete its transformation from a largely military-focused supplier to a company dependent on the commercial aviation industry.

"We're happy," said chief executive Elmer Doty, who joined the Dallas-based company in February. "Overall, the future is very bright."

That optimism might have been out of place even just a few months ago at Vought, one of the most storied names in military and commercial aviation, due to major job cuts and the news that one of the company's biggest military contracts is likely to lose funding soon.

But Mr. Doty said the cuts seem to be paying off, and several new projects are coming online in time to offset the potential end of the contract for C-17 planes.

The two biggest new contracts are for building significant chunks of Sikorsky Aircraft Corp.'s UH-60 helicopter and Boeing Co.'s 787 airplane.

The 787 Dreamliner is clearly Vought's keystone project now, with the first finished systems expected to ship early next year.

"When the C-17 goes away, then commercial will definitely be the lion's share of our business," Mr. Doty said. "Where Boeing goes, we go, too."

While the contract to build pieces of the C-17 plane for the military is winding down, it should be several years before that revenue dries up completely.

Last month, Vought reported third-quarter sales of $354 million, up from $310 million in the third quarter of last year.

The company's net loss shrank from $55 million to $13 million in the same span.

Richard Aboulafia, an aerospace and defense analyst with the Teal Group, said Vought has turned a corner.

"They made the right moves, and the business volume looks very good," he said.

But challenges remain.

Some of Vought's troubles are a standard corporate tale of downsizing and cost-cutting in a competitive global economy.

"This business was set up as a cost-plus defense business," Mr. Doty said. The company "was not well suited for a more dynamic, competitive world."

Additionally, the executives who would have to spearhead that change were not trained to turn on a dime.

"They had never worked anywhere else," Mr. Doty said. "Their background was such that change was going to occur slowly, and we didn't have time for slow."

About 1,000 workers – or about a sixth of the workforce – have been let go since last year, mostly managerial and administrative staff, and other costs have been trimmed.

Vought has also started taking advantage of the terms in some of its contracts with Boeing, its largest customer. The contracts contain provisions that allow Vought to raise the prices of individual parts if Boeing orders fewer parts than originally promised.

Mr. Doty said Vought had not taken advantage of those provisions before he arrived. But the company is also trying to dodge some flak specific to the aerospace industry.

Vought is a mishmash of previous companies and subsidiaries, and its current incarnation really only dates back to 2000, when it was spun off from Northrop Grumman Corp. and bought by the Carlyle Group, a private investment firm.

The company's namesake, Chance Milton Vought, founded the Lewis & Vought Corp. in 1917.

Over the years, the company changed names and owners numerous times, but Vought and its legacy companies continuously built some of the most well-known military planes in the world. One of those, the VE-7SF, made the first takeoff from a U.S. Navy aircraft carrier in 1922. An F-8 jet built by a Vought ancestor set a world speed record in 1956 and was later flown by U.S. Marine Maj. John Glenn, who became the first American astronaut to orbit the Earth.

Lewis & Vought was transformed and rearranged over the years, and in 1961, Chance Vought Aircraft merged with Ling-Temco, which eventually became LTV Corp.

Then in 1992, LTV sold some aircraft assets to the Carlyle Group and Northrop, and those assets were organized into an independently operated company called Vought Aircraft Co.

Two years later, Carlyle sold its interest in the firm to the new Northrop Grumman.

Finally, in 2000, Northrop sold most of its aircraft assets back to Carlyle for about $1.2 billion, which now operates as Vought Aircraft Industries.

Vought no longer builds entire aircraft but builds and assembles parts for other primary contractors such as Boeing.

That maze of consolidations, break-ups and spinoffs is nothing new to the aerospace industry.

But Mr. Doty said the strain of organizing and running the company after all those changes was compounded by the Sept. 11 attacks, which led to a dramatic reduction in demand for commercial aircraft.

Assuming the company can work through a few kinks, the recovering demand for those planes should give Vought some lift, he said.

Mr. Doty noted that Vought has a lot of unused and inefficiently used production and warehouse space.

A tour of the company's 5.2 million-square-foot plant in Dallas – the Dallas Naval Air Station that Vought leases from the Navy – is a stark illustration of the problem.

Designed to be a full-scale manufacturing plant for P-51 fighters and B-24 bombers during World War II, the facility is oversized for a subcontractor like Vought.

Scores of hangars sit empty or are used for storing rusty parts. And even in buildings that are in use, some sections are nearly vacant.

That's not to say it's a ghost town.

The building where workers crawl over sections of the UH-60 helicopters – commonly called the Black Hawk – throbs with the sound of riveting and drilling. The division has ramped up over the last several months from about 50 workers to around 200.

Vought currently has about 3,400 workers in the Dallas area.

Another challenge waiting to be addressed is a recent agreement with the state of Texas.

Under the terms of a $35 million grant awarded in 2004 from the Texas Enterprise Fund, Vought is required to create at least 3,000 additional jobs in the state by 2009.

Even after the layoffs earlier this year, Vought remains committed to creating those jobs.

Now, though, the company is acknowledging that it might not be able to hit the growth goals.

"Given all the uncertainties about the C-17 program, it's too soon to forecast what our employment levels will be in 2009," said Vought spokesman Mike Schwarz. "However, if Vought hasn't met the hiring goals of the agreement, we fully intend to abide by its terms, which include provisions for repayment."

While the 787 project will likely become the single largest project at Vought, that work is done at a facility in South Carolina.

But Mr. Aboulafia at the Teal Group said that Vought is well positioned to compete for more contracts like the 787, since such companies as Boeing and Airbus are increasingly outsourcing the construction of various parts of their aircraft and then just doing the final assembly.

"They just want to be the guy at the top integrating someone else's metal bending, or composite bending," he said.

E-mail vgodinez@dallasnews.com

Here's a look at some of the major projects Vought is working on or preparing for:

UH-60

Prime contractor: Sikorsky Aircraft

Parts made by Vought: Cabin structure

Vought location: Dallas

Number of Vought workers: About 200

Contract value: Up to $1.3 billion

Contract: Potentially runs through 2019

C-17 GLOBEMASTER III

Prime contractor: Boeing

Parts made by Vought: Vertical stabilizer, composite horizontal stabilizer, rudders, elevators, universal aerial refueling receptacle slipway installation and the engine nacelles

Vought locations: Dallas, Brea, Calif., and Milledgeville, Ga.

Number of Vought workers: Approximately 600 in Texas

Contract value: Not disclosed

Contract: Runs through 2009

787 DREAMLINER

Prime contractor: Boeing

Parts made by Vought: Aft fuselage and, through a joint venture with Alenia North America, fuselage integration

Vought locations: North Charleston, S.C.

Number of Vought workers involved: Peak employment expected to be about 375

Contract value: Up to $4 billion

Contract: Runs through 2021