=======================Electronic Edition========================
RACHEL’S HAZARDOUS WASTE NEWS #93
—September 5, 1988—
News and resources for environmental justice.
——
Environmental Research Foundation
P.O. Box 5036, Annapolis, MD 21403
Fax (410) 263-8944; Internet: erf@igc.apc.org
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WHAT WE MUST DO–PART 5: WINNING CORPORATE STRATEGIES.
Waste Management, Inc. (WMI), the nation’s largest waste hauler,
will gross about $3.3 billion and net about $400 million this
year. As of Dec. 31, 1987, the company owned 772 subsidiaries,
many of which are former competitors of the waste giant.
Clearly, this is a firm that has developed winning corporate
strategies.
Setting up hundreds of subsidiaries is a key part of Waste
Management’s grand strategy for profiting from the nation’s waste
crisis. Creating many subsidiaries has several advantages from
Waste Management’s viewpoint. For one thing, it reduces the
company’s tax burden. But more importantly, each subsidiary has
only limited assets, so if they get sued for harming people or
the environment, they quickly become an empty pocket. The parent
company is shielded from liability.
Perhaps most important is Waste Management’s pattern of buying
leaking landfills. It is increasingly difficult to site new
landfills, so it makes good business sense to buy existing
landfills, many of which are leaking, and expand them. Here, the
small subsidiary serves a crucial purpose. The subsidiary buys a
leaking landfill and then says to the local people, “If you let
us expand this landfill, we’ll clean up the existing pollution
and prevent it from harming you. If, on the other hand, you
won’t let us expand the landfill, we will have to declare
bankruptcy and then we won’t be able to prevent the landfill from
contaminating your town.” Waste Management is saying to local
people, in effect, “It’s your choice: let us expand the landfill
in your town or you may be harmed.” It’s an offer many towns
can’t refuse. At a time when 1/3 of the nation’s landfills are
expected to close in the next 5 to 7 years, this strategy has
made Waste Management the owner of 117 valuable municipal
landfills across the country, plus eight landfills for
“hazardous” chemical wastes. As of May, 1988, WMI was
“developing” an additional 72 landfills, according to Drexel
Burnham, Inc., a Wall Street stock analyst. The value of Waste
Management’s landfills is increasing. In spring, 1988, Waste
Management formed a strategic partnership with the nation’s
second-largest builder of municipal solid waste incinerators,
Wheelabrator Technologies. Waste Management owns 23% of the new
Wheelabrator firm, in return for which WMI will guarantee
landfill space for the toxic ash produced by Wheelabrator’s
incinerators. Ash represents 30% of the volume of the solid
waste going into an incinerator and it is more toxic than the
original solid waste. The merger of WMI and Wheelabrator is an
attempt to make Wheelabrator the nation’s most successful
incinerator company.
People living near WMI landfills can expect their communities to
be selected as sites for Wheelabrator incinerators. At a time
when siting of incinerators has become politically difficult
because of citizen opposition to new ash landfills, the alliance
between WMI and Wheelabrator is intended to blunt citizen
opposition and give Wheelabrator an edge on the competition. It
also serves WMI.
“The joint venture with Wheelabrator represents a new, very
positive addition to [Waste Management]. We believe the
arrangement puts Waste Management in the driver’s seat, no matter
which direction or which technology the disposal market takes,”
says Drexel Burnham.
A key element in the success of this strategy will be pending
federal legislation to define incinerator ash as “non-hazardous.”
If incinerator ash is defined as “hazardous waste,” it will have
to be sent to special landfills; shipping and disposal costs will
increase dramatically, making the incineration of solid waste
economically doubtful. If incinerator ash is defined as
“hazardous,” Wheelabrator’s ash will not be able to go to Waste
Management’s landfills and both firms will lose a tremendous
business opportunity.
Luckily for Waste Management and Wheelabrator, a consortium of
Washington based environmental groups is supporting legislation
that would remove the “hazardous” label from incinerator ash,
even though much of the ash proves to be “hazardous” when
subjected to chemical tests by the U.S. Environmental Protection
Agency (EPA). The legislation [see HWN #85] was proposed by
Congressman James Florio (D-NJ), who reportedly has a substantial
interest in two incineration projects in southern New Jersey.
Washington-based environmental groups like Environmental Defense
Fund, Sierra Club, and the National Wildlife Federation are
supporting Mr. Florio’s legislation. The chairman of WMI, Mr.
Dean Buntrock, sits on the board of directors of National
Wildlife Federation.
Waste Management has been courting the environmental community
for some time now. A representative of Waste Management told us
that WMI is now funding “several” environmental groups. They
declined to give many details but confirmed that a well-known New
York City environmental organization recently received a $10,000
grant from Waste Management. Groups wishing to apply for funding
from WMI can contact Bill Brown, who was formerly director of
Environmental Defense Fund (EDF); Mr. Brown can be reached at
Waste Management’s Washington, DC, office; phone (202) 467-4480.
WMI’s corporate strategy includes expansion of its visible
recycling efforts. As we reported earlier [HWN #81], siting
experts say the public is more likely to accept new waste
disposal dumps and incinerators if the projects are presented
with a recycling component.
Drexel Burnham says recycling will never amount to much in the
United States. The U.S. produces 220 million tons of municipal
solid waste each year and 90% of it is currently landfilled.
Recycling can cut waste but only by 10 to 20%, says Drexel, and
recycling is “uneconomic and hard to sustain,” they say.
Nevertheless, running recycling programs evidently has value to
Waste Management. The cover of Waste Management’s 1987 annual
report features a glossy photo of several thousand cans and
bottles awaiting pickup at a WMI-run “recycling” station. Drexel
Burnham says Waste Management runs “numerous recycling programs,”
without naming any. We learned recently that the grass roots
group, Dumpbusters, in Spencerville, Ohio, followed Waste
Management trucks picking up bottles and cans at a “recycling”
center. According to eye witnesses we interviewed, WMI trucks
picked up the recyclables and hauled them directly to a landfill,
where they were dumped like any other garbage.
According to Drexel Burnham, Waste Management has identified 500
major metropolitan markets where it could be active in the
garbage business. The firm is already working in 325 of these and
intends to push its way into all 500 by 1991. It also intends to
expand aggressively in nonmetropolitan areas.
Drexel Burnham’s evaluation of Waste Management is available free
from the firm at 60 Broad St., NY, NY 10004; phone Leone Young at
(212) 361-7202. WMI’s annual report is available free from Bill
Brown at (202) 467-4480.
We have published the list of 772 WMI subsidiaries, by state, and
alphabetically by name, so you can tell whether your adversaries
are owned by WMI. The 36page list is available for $5.
Correction: Last week we gave the wrong area code for Dr. T. L.
Clapp; the correct numbers are (201) 932-3047 or 932-2213.
–Peter Montague, Ph.D.
Descriptor terms: wmi; haulers; strategies; bfi; msw; taxes;
corruption; landfilling; leaks; hazardous waste industry; siting;
drexel burnham; incineration; wheelabrator; ash; citizen groups;
legislation; environmentalists; epa; james florio; edf; sierra
club; national wildlife federation; dean buntrock; bill brown;
revolving door; recycling; waste treatment technologies;
dumpbusters; oh;