Ikea Helps a Town Put It Together

Manufacturing Jobs Come Back to Southern Va.

DANVILLE, Va.

Manufacturers gave up on this small town in Southside Virginia years ago. Textiles disappeared. Tobacco wilted. But scrappy little Danville refused to give up on itself.

Last week, its determination paid off when Ikea celebrated the opening here of its first furniture factory in the United States. Ikea, a Swedish company that has about a dozen factories in Europe, said it chose Danville in part because of the large, skilled labor force eager to work after years of layoffs and downsizing. The city paved its entry with new facilities, secured permits and state tobacco commission grants.

"You have two choices here: You can fold up and die, or you can get it together," said Anne Moore-Sparks, a project manager with the city's Office of Economic Development. "They come in here, and they see we have all the players in place and we are hungry."

The powerful global economic forces that swept away thousands of jobs over the past two decades are now working in Danville's favor. The weakening dollar has made the United States more attractive to foreign investors. Companies from England, Canada and India have recently opened operations or expanded in Danville.

At the same time, skyrocketing oil prices have increased transportation costs. Shipping Ikea's popular Expedit bookshelves to the United States, for example, costs more than it does to make them, said Joseph Roth, the company's U.S. public affairs manager.

"This decade, right now, is probably the strongest in advanced manufacturing that we've seen in years," said Liz Povar, director of business development for the Virginia Economic Development Partnership. "The time has come ripe for them."

New companies are moving in to breathe life into once-tired economies across the industrial corridor in central and southwestern Virginia and in Southside, a strip of generally poor counties in the south-central part of the state.

Rolls-Royce announced plans last year to open an assembly and test facility for its civil aerospace operations south of Richmond in Prince George County, bringing 500 jobs. Earlier this year, RTI International Metals said it would spend $100 million to build an industrial park in Henry County where it will manufacture titanium for the aerospace industry. This month, Canon Virginia promised to invest $600 million to expand its operations in the Hampton Roads area, creating more than 1,000 jobs.

For Danville, the arrival of a global company with Ikea's cachet -- the plant is part of the company's Swedwood manufacturing division -- is a sign that the scars from unemployment rates that hit double digits in the 1990s may finally be fading.

The textile manufacturer Dan River, a former Fortune 500 company, once employed as many as 15,000 workers by some accounts. It began hemorrhaging jobs as it fought a losing battle against overseas competition. Now it employs fewer than 50. Big tobacco also lost business, slowing production in the warehouses that were Danville's second-largest industry.

For two decades, few jobs had come to this worn-out city. By the time Jerry L. Gwaltney took office as city manager in 2000, the city of 48,000 was bleeding people and its infrastructure was run-down. Gwaltney was charged with turning Danville around.