"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.

He started by holding a retreat with his staff at the 4-H center at nearby Smith Mountain Lake. Gwaltney put a bucket of water, a bar of soap and a towel on the table and instructed his staff to lather up.

"We're going to wash away the past, and we're going to set our sights on the future," Gwaltney recalled saying. "And we're never going to look back."

It was not an easy task. Although some sectors of manufacturing, like chemicals and computer parts, have grown in recent years, textile mills and production -- the making of blankets and pillowcases, Dan River's specialty -- have all but disappeared.

The sector employs about 309,000 people nationally, according to the latest government data, making up just 2 percent of all manufacturing jobs. In Virginia, textile employment is down to about 8,000 from a peak of more than 40,000 during the late 1960s and early 1970s.

"The labor-intensive manufacturers are just gone," said William F. Mezger, chief economist of the Virginia Employment Commission. "I don't see those industries coming back."

That has resulted in an unemployment rate in the Danville area of 7.4 percent in March, compared with the state average of 3.7 percent. Even attracting companies may not be enough because the new high-tech plants such as Ikea's require less manpower than old-line manufacturers.

"It's a better job for the people that get them," Mezger said. "But the problem is you've lost the textile mill with 1,000 jobs, and you get in a new niche employer that employs about 100 people."

But to Danville, the alternative -- no new jobs -- was even worse.

The city started its turnaround by sprucing up, turning the depressed downtown into the Tobacco Warehouse Historic District and commissioning public murals depicting its history, including the great Old 97 train wreck in 1903.

Danville has also received millions of dollars in grants to diversify its economy from the tobacco settlement of 1999, which required tobacco companies to pay $206 billion to states over 25 years. That helped pay for a $15 million glass-and-steel research institute anchoring a 330-acre technology park. And then Danville went courting.

"My first thought was Danville needs to clean itself up," Gwaltney said. "You have to show that you care."

The tide began to turn in 2004, when Telvista, a technical support firm in Dallas, arrived with 750 jobs. The next year brought Yorktowne Cabinetry and its 540 jobs. And in 2006, Ikea, which has more than 300 stores around the world, announced its plans to open the Swedwood furniture plant, which will eventually employ 740 people.

The 930,000-square-foot factory, in one of Danville's industrial parks, is outfitted with all Ikea furniture and decorated in the company's trademark blue. It is devoted to making two of the chain's most popular products, Expedit bookshelves and Lack coffee tables.

Enormous machines create the wooden sandwich of high-density fiberboard and sturdy honeycomb-like paper framed by wood supports that is used in Ikea furniture, which is sold in the company's 34 U.S. stores. Another line cuts the boards and applies a finish to the side edges in birch, white or brown. The wood is then painted or covered in paper foil before moving to another line for inspection and packaging.

Swedwood North America Vice President Jorgen Lindquist said he anticipates that it will take three to six months before the plant's roughly 160 workers are up to speed. The ripple effects are already being felt, however. One of Ikea's suppliers, the Polish mattress and furniture manufacturer Com.40, announced in February that it plans to open a plant in Danville that would bring 800 jobs.

The plant's arrival was like a lifeline for Kylette Duncan, 49, who lost her job at Corning inspecting optical lenses for TVs when the company moved the manufacturing overseas in September. Duncan had worked at Corning for seven years and made $16.95 an hour.

Now she is at the Swedwood plant checking wooden boards to make sure the paint is applied correctly. Her salary is $11.50 an hour, but Duncan said she isn't complaining.

"Hey, I've got a job," she said. "Danville stayed the same for so many years, and now it's like boom, boom, boom. It's like we can get excited about Danville again."

Several Swedwood employees even went to Poland for six weeks of training earlier this year. For Shawn Crews, 32, who was hired as a security guard and now works on the paper foil line, the trip was his first time out of the country.

"It's basically just changed my whole life, to be honest with you," he said.

Now Danville boasts a Sam's Club and a PetSmart. Home Depot and Target are slated to open over the summer, making the town a regional shopping hub. Annual sales-tax receipts were up about 12 percent last fiscal year over 2004.

Sharon George, 36, is one of the residents hoping to take advantage of the new economy. Her great-grandparents moved to Danville to work at Dan River, and her grandparents carried on the tradition. George spent a year with the company in her 20s filling and quilting comforters.

Now she is training for her manufacturing technician's certification and associate's degree at Danville Community College. Ikea is on her list of prospective employers.

"I really thought Danville was going to become a ghost town," George said. "Five years ago, I never thought that anybody would have said that Danville would do anything."" (Ylan Q. Mui, The Washington Post, May 31, 2008)