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Despite layoffs, Ashley Furniture gets tax credit to move on expansion plans (UPDATE)

ARCADIA, Wis. (AP) — A Wisconsin-based furniture manufacturer has been approved for a $6 million tax credit even though it plans to lay off half its workforce in the state.

The Wisconsin Economic Development Corp. board quietly approved the tax credit for Ashley Furniture Industries in January, the Wisconsin State Journal reported. It will allow the company to move forward with a $35 million headquarter expansion and keep nearly 2,000 jobs in Wisconsin over the next five years.

Ashley Furniture added $394 million into the state’s economy last year, the company said.

WEDC spokesman Mark Maley said he couldn’t comment on the pending award because the contract hasn’t been finalized.

“Obviously, WEDC is very interested in working with one of the largest employers in northwestern Wisconsin to find ways to help ensure that the company can continue to flourish here in our state,” Maley said. “WEDC is committed to doing whatever it can to work with the company and preserve those jobs.”

According to a staff memo, Ashely Furniture indicated it would downsize or close its Arcadia manufacturing plant if the 480,000-square-foot expansion project wasn’t undertaken.

In its contract with WEDC, Ashely Furniture agreed to retain 70 percent of existing employee positions in 2014, 60 percent the following year and 50 percent between 2016 and 2018. The company currently employs almost 4,000 people in Wisconsin.

“The company is very concerned with the job retention figure due to health care costs for its employees continuing to rise and the option for automation as a solution,” the memo said. “The company also stressed that it is committed to Wisconsin.”

Other documents show Ashley Furniture officials gave $20,000 to Gov. Scott Walker’s re-election campaign about two weeks after the WEDC board voted. Ronald Wanek, founder and board chairman of Ashley Furniture, and his wife also contributed $10,500 to Walker’s campaign in 2010.

Gov. Walker, who chairs the WEDC board, declined to comment.

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