ARCADIA, WI -- Ashley Furniture Industries, Inc. announced today a series of steps designed to better align its aggressive growth strategies with the local job-market and other economic conditions in Wisconsin. Ashley is a major furniture manufacturer and retailer based in Arcadia, with operations around the world. Over the past three years, Ashley has added over 350 positions to its base of 4,500 employees across Wisconsin, and continues to pursue its plans for future growth.
“Ashley has been investing and growing aggressively to meet our customers’ needs, and we are excited about the future we have created for our organization, our customers and our employees,” said Todd Wanek, Ashley President and CEO. “But we are taking a fresh look at our long-term approach to growth to ensure that we are creating the right opportunities and building the right organization for the future.”
Today, Ashley notified the Wisconsin Economic Development Corporation (WEDC) that it will not proceed with a proposed Enterprise Zone Program Tax Credit that would have required an Ashley financial commitment of more than $35 million in return for future State tax credits of $6 million that Ashley would donate, in advance of receiving, to the City of Arcadia for local flood-control efforts.
This earned-incentive program was initiated to assist Arcadia in addressing its decades-old flooding problem, such as the flood in 2010 that caused more than $10 million in damages. The $6 million originally sought was based on the total estimated costs of Arcadia’s proposed flood control project. With a population of only 2,929, Arcadia supports an estimated 6,000 jobs in Wisconsin. These jobs provide a significant and steady financial contribution to Wisconsin’s economy. However, the City of Arcadia is within approximately $3.5 million of its debt limit, meaning that it is unable to complete its flood-control project without assistance from the State or Federal Government.
In recent months it has become apparent that cost increases and project completion hurdles have made this three-plus-year-old flood control project infeasible. Although no letters of intent or agreements have been signed with WEDC, Ashley engineers and technical experts already have invested more than 2,000 hours on the proposed project, with an estimated 10,000 hours still required to completion. With Ashley’s notification to WEDC that it will not proceed with the project, the State’s funds allocated to this earned-incentive program can be reallocated to encourage other growth and local jobs in Wisconsin.
“Our decision to no longer pursue the proposed agreement with WEDC will not affect Ashley’s Arcadia operations or employees,” Wanek said. “Ashley will continue to grow in Arcadia, is committed to continuing a strong presence in Wisconsin, and will continue to meet with the City of Arcadia to assist it in finding other sources for funding its much-needed flood-control project.”
Today, Ashley also notified the WEDC that it will continue to expand its Whitehall, Wisconsin manufacturing facility, just not under an agency-sponsored job-incentive program and its restrictions.
Ashley opened its Whitehall manufacturing facility in 1987, and has continued to invest in its growth. The facility started with no employees and – with the latest expansion that included an $8 million investment in capital improvements and job training, and the recent addition of 87 new hires – now has over 480 employees.
Wisconsin offers a wide range of earned incentives to qualifying businesses, based on specific conditions and performance goals, and the WEDC offers Economic Development Tax Credits to businesses that begin operating in, relocate to, or expand existing operations in the State. In 2012, Ashley applied for and received WEDC approval to earn credits on taxes paid based on its promise to expand the employment base by 225 new positions by 2015. Since completing the $8 million expansion, Ashley created financial incentives for employee referrals and new hires, and has been aggressively involved in numerous local job fairs, college recruiting, community celebrations and other events to attract new hires for the added positions. To-date, Ashley has spent more than $200,000 on recruiting efforts to increase its employee base in Whitehall.
However, the limited availability of potential employees in the Whitehall area – with its low unemployment rate, given the unexpected and rapid growth of other businesses – has limited Ashley’s ability to grow as fast as it needs. Since January 2012, Ashley has spent more than $200,000 on recruitment efforts to add 87 new positions to its Whitehall operations, less than 40 percent of what it needs. Therefore, Ashley – while continuing to grow as the local job-market allows – is voluntarily returning $256,706 in tax credits it has received to-date, plus interest, by amending its Wisconsin tax returns and paying all sums due.
“We take our responsibilities seriously and remain committed to growing in Wisconsin,” Wanek said, “but – while we added more than 350 positions to our statewide workforce over the past three years – we have been unable to attract the new hires we specifically need in Whitehall. Therefore, we made the decision to withdraw from the program and return the incentives we have earned so far, which will allow us to focus on continued growth at our own pace. Although we are withdrawing from the program, we will actively continue our efforts to hire in Wisconsin.”
“A core value of Ashley is commitment to its employees” Wanek said. “Ashley is proud of its Wisconsin employees and the special talents they bring to our plants, each day, to make quality furniture at affordable prices.”
Source: Ashley Furniture
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