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IKEA brings jobs to Virginia
Governor: First U.S. Swedwood factory promotes globalism
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Published: May 22, 2008
DANVILLE, Va.
The manufacturing division of the popular IKEA home-furnishings chain officially opened a factory yesterday that will supply the company's North American stores.
Gov. Timothy M. Kaine and Swedwood officials ceremoniously sawed a log in half, marking the inauguration of the 930,000-square-foot Swedwood plant in Swedish tradition.
"Sometimes people hear about globalism and think, ‘What are we going to lose next?'" Kaine said. "Globalism is also about winning, and so many of the announcements we've done here in Danville are foreign companies wanting to come to the United States.... There isn't a reason we have to be afraid of globalism."
IKEA, a popular chain in Europe, has been making inroads in North America over the past few years. There are 35 IKEA retail stores in the United States, with the closest one to southern Virginia being in Woodbridge.
A store in Charlotte is expected to open next spring.
Swedwood has 40 plants worldwide. The $281 million Danville plant is its first U.S. factory.
Manufacturing in Danville will significantly cut down on transportation costs, which, with diesel prices high and the value of the dollar low, are "the most expensive part of home furnishings," said Joseph Roth, Swedwood's director of public affairs.
Excited city and Pittsylvania County officials, along with Swedwood executives, joined Kaine for the opening ceremony.
"The available work force here (that is) knowledgeable about manufacturing" is part of the reason the company was interested in the region, Roth said. Swedwood offers "highly skilled manufacturing jobs. We're very thrilled to be bringing them to Danville and Pittsylvania residents."
Swedwood had considered Lexington, N.C., but the Danville site's roads, sewers, completed soil tests and issued building permits lured the company to Virginia, said Jeremy Stratton, the city's director of economic development.
In addition, more than $12 million in incentives were offered to Swedwood in state, local and Virginia Tobacco Commission funds.
The plant has about 175 employees, with more than 700 expected in coming years. Roth said the company is considering building up to three more manufacturing plants on the 209-acre site.
The Swedwood operation alone won't shore up the economy of the former tobacco stronghold that once supported thousands of jobs. The unemployment rate in March was still the highest among Virginia metropolitan areas at 7.4 percent, compared to the state average of 3.9 percent.
City and state officials emphasized that Swedwood has broader implications for economic development in Virginia
Since 2004, new companies have promised to create 6,600 jobs in Danville and surrounding Pittsylvania County.
One of them, Com40, is a Polish company that supplies mattresses to IKEA. It plans to employ 813 workers in a former tobacco processing facility.
Stratton expects more foreign companies to locate in Virginia because of the weakened dollar. Not only are jobs returning, but they're better jobs, he said.
Kaine praised Danville and Pittsylvania County for working together on the project and said he hoped that other communities across the state would follow their lead.
In October 2006, Swedwood announced plans to build its first North American plant in the Danville area. The company said it would invest $281 million in the Dan River Region over the next several years.
Tracy Preston took a pay cut to go to work for Swedwood in January.
"I just see a brighter future here," said Preston, who has already received raises. "I see an opportunity to grow."
James Evans, 42, worked in construction after the Dan River plant closed, but he took a maintenance-technician course at Danville Community College that landed him his job as a line supervisor with Swedwood. His $13.25-an-hour pay is more than he made at Dan River, a now-closed textile manufacturer.
"It's easier to sleep at night," he said.
■ Sarah Arkin is a reporter for the Danville Register & Bee.
■ The Associated Press contributed to this article.
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