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Rebuilding Danville
Job retraining and
research capacity keep this mill town ahead
by
John Peters
for
Virginia Business
April 2003
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Spotlight on growth and
development in Danville
- Averett University
President Dr. Richard Pfau on the university and its
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A
century ago Danville stood at the cusp of a new century
as a key center of manufacturing and commerce in Southside
Virginia. Busy red-brick tobacco warehouses and textile
mills dotted the banks of the Dan River that flows through
downtown. Unlike many an ugly mill town in the industrial
South, Danville had charm, as evidenced by the well-appointed
Victorian homes atop a hill overlooking the city and
its fine arts museum. This last capital of the doomed
Confederacy seemed destined to be a regional powerhouse.
That was then. By the last decade of the 20th century,
Danville had changed in a big way. Global competition
had shredded textiles and jobs moved offshore. Health
concerns and discount cigarette brands were stubbing
out tobacco. Much of the muscle that had made Danville
a blue collar dynamo had gone limp. The city was drifting
into economic limbo.
Today
Danville is rebuilding itself. While other towns dream
on, Danville’s leaders have taken basic but essential
steps for a turnaround that so far has led to the beginnings
of biotechnology, air- and land-based robotics research,
aerospace engineering, and advanced polymers research.
Starting with the $2 million e-Dan project now underway
in the city and surrounding Pittsylvania County, plans
are afoot for next-generation broadband access for all
people in Southside Virginia.
More
significant is that Danville isn’t just wiring
itself over with high-speed cable that’s in a glut
anyway. Banking on human capital, regional officials
have created a variety of new schools, courses and research
operations, including a new magnet high school that
specializes in aerospace and biotechnology studies and
is named after Galileo. By leveraging its good relations
with The Goodyear Tire & Rubber Co., which has a
major aircraft tire factory nearby employing 2,500,
and other companies, the area has tapped crucial dollars
for upgrading its training for special blue-collar jobs
that pay well and are in short supply.
A
major challenge is that many smaller cities like Danville,
especially mill towns in the Piedmont regions of North
Carolina a few miles to the south of the city, are in
the same boat. Their economic development units are
in cat fights over landing new companies that have become
even more elusive because of the weak economy. If Danville
has a leg up, it is its strategy of producing crops
of workers who can move directly into highly technical
fields, many in small companies. Simply landing another
big factory is risky because there are excellent chances
it will be uprooted in a few years and moved offshore.
A work force well-trained in difficult fields can’t
be easily exported. The region’s emphasis on research
and development is a wise one, says Gary Shoesmith,
an economics professor at Wake Forest University who
studies the demise of textile towns in the South. “That’s
smart, versus manufacturing,” he says. “Foreign
competition doesn’t move downward, it moves upward.
Even high-tech industries will eventually be susceptible
to foreign competition. But, R&D facilities don’t
face Mexican competition, or even worse, competition
from China.”
Oddly
enough, rebuilding Danville got under way about eight
years ago almost by happenstance. Business people such
as Ben Davenport, president of First Piedmont Corp.,
and Lynwood Wright, vice president of quality and development
at Dan River Inc., met to figure out how to renovate
an old theater in the downtown district. Others in the
group included a hospital CEO, a local contractor, a
local bank president, a local architect, the local daily
newspaper publisher, a physician who owns a local radio
station and a plant manager at the Goodyear plant. The
goal, says Davenport, was to do something to spur economic
development, and the group set its sights on renovating
the theater as a tourist magnet, similar to the famous
Barter Theatre in Abingdon that has been a tourist destination
for drama lovers for years.
The
effort failed, but that failure became a turning point
for this tobacco belt town near the North Carolina border.
Rather than give up and go home, Davenport said the
group, which dubbed itself the Future of the Piedmont
Foundation, decided to stay together and explore other
ways to spur economic development.
The
organization changed its goals from zeroing in on one
or two ways to spur a segment of the economy, such as
tourism, to focusing on a wholesale change in the region’s
economic focus — shifting from a traditional agricultural-
and textile-dependent economy to a knowledge-based economy.
The crown jewel of the group’s work thus far has
been the founding of the Institute for Advanced Learning
and Research in the city in the fall of 2000. The institute
is a collaborative effort between Virginia Tech, the
private Averett University in Danville and Danville
Community College.
Landing
Virginia Tech as a participant was key, Davenport says.
“Virginia Tech is a critical piece because it brings
not only the presence of that university to Danville.
... They have agreed to do research in this community,”
and not just academic research, he says. “The institute
is entirely designed to be an economic development tool
for the region.”
The
institute’s mission is to develop technologies
that have practical business applications, says Tim
Franklin, who does double duty as the executive director
of the Institute for Advanced Learning and Research
in Danville and as Virginia Tech’s director of
university outreach programs, Southside Virginia. By
focusing on three primary disciplines — performance
engineering, advanced robotics, and biotechnology research
— the institute hopes to become a research center
in a commercial setting. It just received a $250,000
USDA grant to develop a tissue culture lab that can
hasten the growth of plants — doubling or tripling
the yield on plants grown commercially, or spurring
faster and larger tree growth for the forestry industry.
Other expected work includes research in land and air
robotics, with an eye toward military applications,
and advanced suspensions systems.
The
robotics research, particularly with unmanned airplanes,
fits nicely with the city’s hopes of landing more
aerospace research in the region. Already, NASA has
taken some preliminary steps toward using Danville Regional
Airport as part of its Small Aircraft Transportation
System testing program, linking the facility with other
small airports around the country. The idea is to make
better use of smaller jets. Carrying a couple dozen
or fewer people from small airport to small airport,
closer to their destinations, would alleviate congestion
at major hubs, says Mark Adelman, manager at the airport.
Much of that network would be computerized and linked
via high-speed Internet access, allowing airports to
be utilized even if most of the staff is home, Adelman
says. The presence of the SATS program at the airport
spurred the city school system to include aerospace
research in the curriculum at its new Galileo school.
Most
of this plan, however, is still theoretical. The institute,
which Franklin believes will eventually employ as many
as 50 to 60 people, now has a total staff of 10 that
occupies a tiny former bank building in downtown Danville.
The eventual home of the institute is planned to be
in a 93,000-square-foot, $15 million facility in what
is called the area’s cyber park — an industrial
park with research-related and high-tech businesses.
To finance the building the area has reached back to
one of the old mainstays in the local economy, using
Virginia Tobacco Indemnification and Community Revitalization
Commission money for much of the work. The commission
distributes money won from lawsuits against four major
cigarette makers and distributes it in the state’s
tobacco belt.
While
some of the institute’s research is still in the
realm of possibilities, its presence and its plans for
advanced research capabilities is one of the factors
that caught the eye of India-based Essel Propack, the
world’s largest laminated tube manufacturer.
To snare Essel Propack, Danville squared off with Guilford
County, N.C., in a fight over financial incentives.
The company supplies all the toothpaste tubes to Procter
and Gamble for its best-selling Crest brand of toothpaste
and was looking to build its first U.S.-based plant
near P&G’s main manufacturing plant for Crest
near Greensboro, N.C. Once city officials learned the
company was looking in the region, they contacted Essel
Propack with a pitch to build in Danville. “We
started talking around June (2002),” says Bruno
Killias, the plant manager in Danville. “The cost
in Greensboro was so much higher, the land, the utilities
are about 60 percent here what they were in Greensboro.
Danville courted us so very professionally, they guaranteed
we could have a production facility in operation by
the fifteenth of November.” That, along with local
and state incentives that included $200,000 from the
governor’s opportunity fund, made the company take
a long, hard look at Danville.
Perhaps
what sealed the deal, however, was Danville Community
College’s ability to use a training program developed
there to teach prospective employees what they need
to know in the areas of electronics, pneumatics, hydraulics
and mechanics, Killias says. Once the company showed
serious interest, Killias says the city worked even
harder for the firm. “We had weekly meetings with
all the city people, people from Essel Propack, contractors,
college people, we met every Thursday,” he says.
“At the end of the meeting, they always asked ‘What
is happening that could hold us back, that could stop
us from hitting the fifteenth of November?’”
The city was true to its word, Killias said. Construction
started Oct. 5, and by Nov. 15 the $30 million facility,
while not fully finished, was up and running.
That
Danville Community College was ready to step in and
train the people for Essel Propack shows just how deeply
attitudes have changed, says Max Glass, dean of work
force services at the college. The equipment used in
that training, he said, was purchased two years ago
using $300,000 from Goodyear Tire and Rubber Co. and
about $400,000 in tobacco commission money. Goodyear
found many of its technicians reaching retirement age
at its 30-year-old local plant. Rather than launch an
exasperating recruitment drive, the company turned to
the college for help in training new technicians from
its existing work force, says Jeff Arnold, director
of the college’s Center for Business, Industry,
and Government. The college studied other Goodyear training
facilities around the nation, looked at what the local
plant needed, then developed a two-year curriculum in
which trainees would spend 33 weeks in class, then three
weeks in the plant, then repeat until the training was
finished. So doing, the college looked beyond Goodyear’s
needs and tried to anticipate what other firms might
want, which eventually paid off in helping the city
land Essel Propack. “This is something that would
be very attractive to companies that are looking at
moving here,” Glass says.
The
training program has other legs as well. Puttering around
some test equipment in a lab run by the community college’s
Center for Business, Industry & Government, hydraulics
instructor Mike Jones says the teaching program has
big advantages because it is cheap and has practical
benefits. Many companies are sending their maintenance
workers to Danville because on-the-job training involves
shutting down production lines and that’s too expensive,
he says. The CBIG program costs only about $150 for
a short course compared to $1,500 for regional courses
offered by big-time controls companies such as Allen-Bradley.
Jones, a retired glass worker, moved to Danville from
his Pennsylvania home in 1978. “I've seen some
big changes here. Danville's gone from the 1950s to
the 1990s very quickly. It used to be a one-industry
town,” he says.
Another
way of attracting companies is finishing a new fiber
optic broadband network in Danville and Pittsylvania
County. Dubbed e-Dan, the network is the first of what
should eventually become the e-58 network, says Nancy
Franklin, chief information officer for the Institute
for Advanced Learning and Research and Virginia Tech’s
Southside regional director of information technology.
Eventually, e-58 will link all the cities and communities
across Southside, from the Tidewater region to the coalfields.
E-Dan, says Franklin, is the $2 million tobacco commission-funded
pilot project. The fiber optic network, which runs the
40-mile length of Pittsylvania County, is expected to
be in operation in April, she says. “This e-Dan
infrastructure will be open access, so that any service
provider, (be it) voice, data, or video, will be able
to ride, if you will, over this fiber backbone.”
The
logic behind the project, she says, is that the cost
of building such an infrastructure is so great that
business users could not recoup their investments in
a typical 18- to 24-month business cycle. If the infrastructure
is already in place, companies might find Danville more
attractive.
Not
all agree that adding broadband alone will help. The
trouble is twofold, according to Wake Forest’s
Shoesmith. Every community seems to be installing fiber
optic or cable Internet access. Second, he says the
Internet-dependent industry is still suffering, with
the bursting of the dot-com bubble. “There’s
really nothing else you can do,” he says. “You
can’t look back and try to rebuild a local economy
on the old industries: tobacco, furniture, textiles.
There’s really no alternative.” Even so, he
says that “they are wise to build that infrastructure,
because if you don’t have it, no one is going to
show up. Still, it’s not going to solve all your
problems because all of the tech industry has suffered
in recent years.”
Even
companies such as Essel Propack, Shoesmith says, are
no longer a long-term fix to a local town’s economy.
“Someone could swoop in and take that company.
The economics are that that company isn’t going
to leave next year, but in five or 10 years that could
happen. Even the prototypical high-tech manufacturing
facility will eventually move to the lowest price point,
but R&D will still be here (in the United States).”
On the other hand, there’s so much R&D not
far away in North Carolina’s Research Triangle,
that Danville gets an indirect boost. “There’s
the idea that similar companies cluster. Other things
being equal, I would say that helps them, especially
if there are suppliers of their activities near Danville.”
Though
the R&D component of Danville’s plans are still
down the road a bit, the efforts are already paying
dividends. The latest figures show the Danville area
jobless rate at 5.7 percent in December 2002, still
the highest of any metropolitan area in the state and
about the national average, but a far cry from the 10
percent rate for the same month a year earlier, and
significantly lower than 2001’s annual rate of
8.5 percent. By contrast, nearby Martinsville has an
unemployment rate of 11 per cent. (see story, page 33)
Moreover,
Danville is trying to transform itself in ways other
than developing research. One example is the mixed-use
Long Mill project just across the Dan River from downtown.
Developer Lee Cobb and his partners are busy tearing
down and renovating old textile buildings into an 800,000-square-foot
structure that will include condominiums and stores.
The condos will mostly be riverfront living quarters,
with small retail outlets, coffee shops and specialty
shops interspersed among the residential units, creating
a self-contained village. “This will be a beautiful
development for Danville,” says Renee Wyatt, of
the Danville Economic Development Office.
The
city may be headed in the right direction, but most
of the work still lies ahead, says Lynwood Wright of
the Future of the Piedmont Foundation. “We can’t
let up a bit,” he says. “I don’t think
we’ve hit critical mass. We’re really entering
the toughest part of any project, where we’ve gotten
through the glamorous and fun stuff and now it just
gets down to the grunt and grind.” But once that
happens, he says, “We can sit and relax and look
back on what we’ve accomplished.”
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