Photos by Stephanie Klein-Davis | The Roanoke Times

Employees at Vaughan-Bassett Furniture Co. work on wooden dressers at the Galax facility Thursday. The small city once had six furniture plants, though all but Vaughan-Bassett reinvented themselves over the years as importers amid competition from overseas.

Carrie Buckley inspects dressers at the Vaughan-Bassett Furniture Co. on Thursday, the day a company expansion was announced. Vaughan-Bassett's sales grew 19 percent in the last quarter of 2011 and are already up 20 percent this year.

Rep. Morgan Griffith (left) chats with John Bassett, a third-generation factory executive. The tenacity of Vaughan-Bassett Furniture's leadership has been credited for the company's strength.

Vaughan-Bassett has purchased the vacant Webb Furniture Enterprises Factory #1, which will be the site of the expansion.

GALAX — Standing atop a conveyor belt in front of a giant American flag, Vaughan-Bassett Furniture Co. executives announced Thursday an $8 million expansion and the creation of 115 new jobs over the next three years in the economically depressed factory town.

Surrounded by reporters, politicians and more than 400 of his 650 line workers, third-generation factory executive John Bassett explained why the company had purchased the vacant Webb Furniture Enterprises Factory #1 next door, which had put 300 people out of work when it closed in 2006.

"You can't compete with China and Vietnam and Malaysia unless you have the finest equipment money can buy †and the best employees in the world," he said, to roaring applause.

Standing by were representatives from the city of Galax, which kicked in $56,250 in incentives toward the reopening of the factory locals call "Webb No. 1." The added facilities will supplement the bedroom furniture maker's machine, assembly and finishing operations, operating in Galax since 1919.

The Virginia Tobacco Region Opportunity Fund offered $200,000 in incentives, and the Virginia Jobs Investment Program kicked in $75,000 for worker training.

"This is absolutely wonderful," said Bill Webb, head of the Virginia Employment Commission in Galax, which has an official unemployment rate of 9 percent and an unofficial rate that Webb estimated to be 20 percent to 25 percent. "The economy is finally coming back, and we can see it coming back right here."

Fifteen years ago, before trade with China opened up, Galax was a humming factory town with six furniture plants. But one after another, the plants closed as furniture makers in the region transformed themselves into importers.

Except Vaughan-Bassett. Back in those days, Bassett told the crowd, his eyes beaming over sawdust-covered glasses, worried line workers used to approach him tentatively and ask, "John, are we still going to have a job tomorrow?"

Watching President Barack Obama's State of the Union address earlier this week, the 74-year-old company chairman said he appreciated the emphasis on "re-sourcing jobs to America. But he forgot to mention one thing: that the people in this room never left! We never went overseas, and today's news is further proof that we never will."

Vaughan-Bassett's sales grew 19 percent in the last quarter of 2011 and are already up 20 percent this year, said executives of the privately held company, which reported $83.9 million in sales last year.

In Henry County, the birthplace of Virginia furniture making, Hooker Furniture Vice President Art Raymond said he's more optimistic than he's been in a decade about the return of manufacturing to America, in light of China's shift toward manufacturing higher-tech products and higher wages, along with its growing consumer class.

But the challenges of reopening dormant plants are huge, he added. Future startups are likely to be created by entrepreneurs offering customized, niche products that Americans will pay more for — not already established furniture companies, which he believes have been out of manufacturing too long to start over again.

He also worries that the Martinsville/Henry County region's work force — decimated by the loss of 19,000 manufacturing jobs, mostly in furniture and textiles — is no longer trained to operate the newer, high-tech machinery necessary to make cost efficient goods.

"There's nothing I'd love more than to be able to build one in the back yard here," Raymond said. "But it won't be easy, and the guys that do end up trying it will be pioneers."

Vaughan-Bassett, now the largest wooden bedroom manufacturer in the United States, has thrived because of its leaders' tenacity — particularly their decision not to embrace imports, said Steve Walker, a furniture analyst at North Carolina State University. "But it's not a model that can be easily replicated," he added, in part because few other factories kept their smokestacks churning.

"While everyone else was busy learning how to import, they stayed," Walker said. "And now they're in place to rebound."

The announcement of 115 new jobs was greeted warmly by plant workers, who were supplied with chicken suppers and told they didn't have to clock out for lunch.

Fifty of the 115 jobs — paying an average of $12.50 an hour including benefits — will be in place by March, company officials said, with the remaining to be filled over the next three years.