Last year, Gov. Scott Walker’s job-creation agency struck a deal with Ashley Furniture Industries Inc. that would have led to a loss of 2,000 jobs.
The Wisconsin Economic Development Corporation, which Walker chaired at the time, offered Ashley a $6-million tax credit in 2014 for agreeing to invest $35 million to expand its headquarters in Arcadia. But, as part of the deal, WEDC accepted the company’s plan to eliminate nearly half its labor force of about 4,000 workers in the state.
Company president Todd Wanek explained that he couldn’t find the kind of skilled workers he needed in the area near the company’s Whitehall plant.
So how could a jobs agency negotiate a deal to kill jobs? It turns out that Wanek and members of his family made donations totaling $20,000 to Walker about two weeks after the deal was struck.
“Pay-to-play certainly comes to my mind and I know I’m not alone,” said Scot Ross, executive director of the progressive group One Wisconsin Now.
According to an investigation conducted by One Wisconsin Now, 60 percent of the companies that received grants from WEDC were Walker contributors.
Better luck down south
Engulfed by bad publicity, Ashley decided to decline the $6-million tax credit and instead looked south.
According to a recent story in Business North Carolina, Ashley plans to create 454 new jobs in that state during the next five years and invest upward of $8.7 million there through the end of 2019, the magazine reported.
Not only did North Carolina get far more jobs than Walker’s team negotiated, but North Carolina appears to have gotten a better overall deal for less money than WEDC was willing to pay. North Carolina offered tax credits of $4.6 million from 2016 through 2027.
According to Business North Carolina, Ashley’s latest deal with the state comes on top of “the initial phase of development where it committed to create 550 jobs and invest $80 million between 2012 and 2015. Ashley exceeded these commitments by creating more than 1,100 jobs.”
Part of the initial phase in North Carolina included job training provided by Ashley to prospective workers.
By comparison, Ashley added 300 employees at its Wisconsin locations in Arcadia and Whitehall through 2014.
“It seems that even after his privatized commerce department agreed to give millions to a company run by his campaign donors, that Scott Walker has failed Wisconsin again,” Ross said. “Rather than create jobs in its home state, the company has decided to cut and run on expanding in Scott Walker’s Wisconsin.”
Since the Ashley Furniture scandal, Walker has stepped down as chair of WEDC, which even Republicans have declared a disaster.
The case raises a broader question about WEDC’s approach: Is Ashley Furniture the kind of employer that Wisconsin should support?
Earlier this year, Ashley was hit with a $1.8-million fine from the U.S. Labor Department’s Occupational Safety and Health Administration for safety violations in Wisconsin. More than 1,000 worker injuries were officially recorded at the Arcadia plant in three and a half years. All of the incidents were serious enough to have been reported by someone other than the injured employee.
“Ashley Furniture has created a culture that values production and profit over worker safety, and employees are paying the price,” U.S. Labor Secretary Thomas Perez said in a strong statement.
In early 2013, the company came to national attention for a discrimination suit. A lesbian worker sued the Ashley Furniture HomeStore of Secaucus, New Jersey, claiming she was grilled about her religious beliefs and then fired. According to court filings, former employee Isabel Perez said she was told that she didn’t fit in with the company’s “culture.”
Perez said the furniture store’s manager “spoke in tongues,” a state of babbling hysteria induced by religious fervor, which Pentecostal Christians believe is the result of possession by the Holy Spirit. Two managers at the store told Perez that God ordered them to let her go.
The same store was sued in 2013 for alleged harassment of two Muslim employees, who said they were repeatedly accused of being terrorists and were tormented with racial slurs.
The two employees were fired after they complained about the verbal abuse.
According to the website Back2Stonewall, the Waneks support the Christian-right organization FamilyLife, an anti-gay group that lobbies against same-sex marriage and LGBT civil rights.