Waste Management, Inc
   HOME

TheInfoList



OR:

Waste Management, Inc.,
doing business as A trade name, trading name, or business name is a pseudonym used by companies that do not operate under their registered company name. The term for this type of alternative name is fictitious business name. Registering the fictitious name with ...
WM, is a
waste management Waste management or waste disposal includes the processes and actions required to manage waste from its inception to its final disposal. This includes the collection, transport, treatment, and disposal of waste, together with monitor ...
, comprehensive waste, and environmental services company operating in
North America North America is a continent in the Northern Hemisphere, Northern and Western Hemisphere, Western hemispheres. North America is bordered to the north by the Arctic Ocean, to the east by the Atlantic Ocean, to the southeast by South Ameri ...
. Founded in 1968, the company is headquartered in the Bank of America Tower in
Houston Houston ( ) is the List of cities in Texas by population, most populous city in the U.S. state of Texas and in the Southern United States. Located in Southeast Texas near Galveston Bay and the Gulf of Mexico, it is the county seat, seat of ...
, Texas. The company's network includes 337 transfer stations, 254 active
landfill A landfill is a site for the disposal of waste materials. It is the oldest and most common form of waste disposal, although the systematic burial of waste with daily, intermediate and final covers only began in the 1940s. In the past, waste was ...
disposal sites, 97 recycling plants, 135 beneficial-use landfill gas projects and six independent power production plants. WM provides environmental services to nearly 21 million
residential A residential area is a land used in which houses, housing predominates, as opposed to industrial district, industrial and Commercial Area, commercial areas. Housing may vary significantly between, and through, residential areas. These include ...
, industrial, municipal and commercial customers in the United States, Canada, and
Puerto Rico ; abbreviated PR), officially the Commonwealth of Puerto Rico, is a Government of Puerto Rico, self-governing Caribbean Geography of Puerto Rico, archipelago and island organized as an Territories of the United States, unincorporated territo ...
. With 26,000 collection and transfer vehicles, WM has the largest trucking fleet in the waste industry. Combined with its largest competitor Republic Services, Inc., the two handle more than half of all garbage collection in the United States.


History

In 1893, Harm Huizenga, a Dutch immigrant, began hauling garbage at $1.25/wagon in
Chicago Chicago is the List of municipalities in Illinois, most populous city in the U.S. state of Illinois and in the Midwestern United States. With a population of 2,746,388, as of the 2020 United States census, 2020 census, it is the List of Unite ...
. In 1968, Harm's grandson Wayne Huizenga, Dean Buntrock, and Larry Beck founded Waste Management, Inc. and began aggressively purchasing many of the smaller garbage collection services across the country. In 1971, Waste Management went public, and by 1972, the company had made 133 acquisitions with $82 million in
revenue In accounting, revenue is the total amount of income generated by the sale of product (business), goods and services related to the primary operations of a business. Commercial revenue may also be referred to as sales or as turnover. Some compan ...
. It had 60,000 commercial and industrial accounts and 600,000 residential customers in 19 states and the provinces of
Ontario Ontario is the southernmost Provinces and territories of Canada, province of Canada. Located in Central Canada, Ontario is the Population of Canada by province and territory, country's most populous province. As of the 2021 Canadian census, it ...
and
Quebec Quebec is Canada's List of Canadian provinces and territories by area, largest province by area. Located in Central Canada, the province shares borders with the provinces of Ontario to the west, Newfoundland and Labrador to the northeast, ...
. In the 1980s, Waste Management acquired Service Corporation of America (SCA) to become the largest waste hauler in the country. Between the years of 1976 and 1997, the executive officers of Waste Management, Inc. began "cooking" the accounting books by refusing to record expenses necessary to write off the costs of unsuccessful and abandoned landfill development projects; establishing inflated environmental reserves (liabilities) in connection with acquisitions so that the excess reserves could be used to avoid recording unrelated operating expenses, improperly capitalizing a variety of expenses; failing to establish sufficient reserves (liabilities) to pay for income taxes and other expenses; avoiding depreciation expenses on their garbage trucks by both assigning unsupported and inflating salvage values and extending their useful lives; assigned arbitrary salvage values to other assets that previously had no salvage value; failed to record expenses for decreases in the value of landfills as they were filled with waste, used netting to eliminate approximately $490 million in current period operating expenses and accumulated prior period accounting misstatements by offsetting them against unrelated one-time gains on the sale or exchange of assets; and used geography entries to move tens of millions of dollars between various line items on the company's income statement. Officers were accused of making "the financials look the way we want to show them." The top officers settled with the federal government for $30.8 million in 2005, without admitting guilt. When a new CEO took charge of the company in 1997, he ordered a review of the company's accounting practices in 1997. In 1998 Waste Management restated its 1992–1997 earnings by $1.7 billion, making it the largest restatement in history. In 1998 Waste Management merged with USA Waste Services, Inc. USA Waste Services CEO John E. Drury retained the chairmanship and CEO position of the combined company. Waste Management then relocated its headquarters from
Chicago Chicago is the List of municipalities in Illinois, most populous city in the U.S. state of Illinois and in the Midwestern United States. With a population of 2,746,388, as of the 2020 United States census, 2020 census, it is the List of Unite ...
to Houston. The merged company retained the Waste Management brand. In late 1999, John Drury stepped down as chairman due to brain surgery. Rodney R. Proto then took the position of chairman and CEO. That year also brought trouble for the newly expanded company in the form of an accounting scandal. In November 1999, turn-around CE was brought in to help Waste Management recover. The company has since implemented new technologies, safety standards, and operational practices. On July 14, 2008, Waste Management offered a $34 per share all-cash bid to acquire arch-competitor Republic Services, Inc. On August 11, 2008, the bid was raised to $37 per share. On August 15, 2008, Republic Services, Inc. denied Waste Management's bid for a second time. On October 13, 2008, Waste Management withdrew its bid for Republic Services, citing financial market turmoil. In 2015, Winters Brothers assumed all of WM's operations in Connecticut and New York (excluding New York City, and continues to service these regions under contract with WM. In February 2022, Waste Management CEO Jim Fish announced that the company would officially shorten its
trade name A trade name, trading name, or business name is a pseudonym used by companies that do not operate under their registered company name. The term for this type of alternative name is fictitious business name. Registering the fictitious name with ...
to "WM" as part of a rebranding to emphasize its growing focus on sustainability and environmental services, including compressed natural gas and landfill gas utilization. WM agreed a deal to acquire Stericycle Inc for $7.2 billion, in May 2024. Stericycle is a medical waste and paper shredding company based in Illinois, with the deal anticipated to close in Q4 2024.


Recycling

As of 2023, WM operated 97 recycling facilities. WM has also participated in recycling-focused initiatives with other companies: *
LG Electronics LG Electronics Inc. () is a South Korean Multinational corporation, multinational major appliance and consumer electronics corporation headquartered in Yeouido-dong, Seoul, South Korea. LG Electronics is a part of LG, LG Corporation, the fourth ...
for electronic waste recycling * Live Nation Entertainment for recycling at sports and music venues *
PepsiCo PepsiCo, Inc. is an American multinational corporation, multinational food, snack, and beverage corporation headquartered in Harrison, New York, in the hamlet of Purchase, New York, Purchase. PepsiCo's business encompasses all aspects of the f ...
for beverage container recycling * Valero Energy for waste-to-fuel conversion technology * Enerkem for converting waste to ethanol


International

In 2009, Waste Management purchased a 40-percent stake in Shanghai Environment Group Co Ltd, a wholly owned subsidiary of Shanghai Chengtou Holding Co Ltd. SEG sought Waste Management's investment in order to benefit from Waste Management's experience in the waste disposal field, as well as improve their technology for waste disposal.


Corporate issues


1995 lawsuit

Shareholders sued Wheelabrator Technologies's (WTI) board of directors for breach of their
fiduciary duty A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties (legal person or group of persons). Typically, a fiduciary prudently takes care of money or other assets for another person. One party, fo ...
, challenging the merger of WTI into Waste Management. In 1995, the case, In re Wheelabrator Technologies, Inc. Shareholders Litigation, came before the Court of Chancery of Delaware on an appeal regarding the Board's motion for summary judgment. The shareholders argued the Board breached their duty of care because there was not sufficient process, they didn't look at alternative transactions, didn't consider information regarding waste's legal liabilities, they didn't appoint a committee of independent directors to negotiate the merger, and they didn't adequately consider the terms of the merger; they breached their duty of loyalty, and; they breached their duty to disclose relevant information regarding the merger. Ultimately, the court dismissed the duty of disclosure claim but allowed the duty of loyalty claim to a degree. In regards to the duty of loyalty claim, the court disagreed with both the shareholders and the Board. It labelled the merger as an interested transaction, not a controlled shareholder transaction, so the business judgment rule applies and the burden to prove waste is on the shareholders.


Accounting improprieties

Revelations of irregular accounting led to a major drop in
stock Stocks (also capital stock, or sometimes interchangeably, shares) consist of all the Share (finance), shares by which ownership of a corporation or company is divided. A single share of the stock means fractional ownership of the corporatio ...
price and to the replacement of top executives after a new CEO ordered a review of the company's
accounting Accounting, also known as accountancy, is the process of recording and processing information about economic entity, economic entities, such as businesses and corporations. Accounting measures the results of an organization's economic activit ...
practices in 1998. Waste Management's shareholders lost more than $6 billion in the market value of their investments when the stock price plummeted by more than 33%. The company had augmented the
depreciation In accountancy, depreciation refers to two aspects of the same concept: first, an actual reduction in the fair value of an asset, such as the decrease in value of factory equipment each year as it is used and wears, and second, the allocation i ...
time length for their property, plant, and equipment, artificially inflating the company's after-tax profits by US$1.7 billion. On July 8, 1999, a class action lawsuit was filed against WMI and certain officers for issuing false statements. Waste Management paid US$457 million to settle a
shareholder A shareholder (in the United States often referred to as stockholder) of corporate stock refers to an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the ...
class-action suit in 2003. The SEC fined Waste Management's independent
auditor An auditor is a person or a firm appointed by a company to execute an audit.Practical Auditing, Kul Narsingh Shrestha, 2012, Nabin Prakashan, Nepal To act as an auditor, a person should be certified by the regulatory authority of accounting an ...
, Arthur Andersen, US$7 million for its role.


ERP software implementation failure

In 2005, Waste Management entered into a software licensing agreement (SLA) with
SAP AG Sap is a fluid transported in the xylem cells (vessel elements or tracheids) or phloem sieve tube elements of a plant. These cells transport water and nutrients throughout the plant. Sap is distinct from latex, resin, or cell sap; it is a sep ...
. Under the agreement, SAP and its wholly owned subsidiary, Tomorrow Now, were to implement SAP's enterprise resource planning software. The implementation began when an eight-month pilot program was established in Waste Management's New Mexico market area, the market-share area at the time. This initial implementation was to be followed in two months with a company-wide implementation from Waste Management's headquarters in Houston, Texas. In December 2007, Waste Management ended their ERP implementation effort. Waste Management characterized the ERP implementation as non-functional. An SAP sponsored "Solution Review" determined that a customized ERP, based upon an updated SAP ERP, would need to be made in order to accommodate a company-wide implementation. Waste Management sued SAP for the US$100 million to recover the funds it had spent on the failed ERP implementation. In the lawsuit, Waste Management accused SAP of fraud and deception. SAP countered that Waste Management failed to present knowledgeable workers and accurate business models and failed to migrate data from legacy systems. The suit concluded in 2010 under confidential terms and a one-time payment from SAP to Waste Management disclosed to the SEC.


Labor relations

In 2007, Waste Management locked out
Teamsters The International Brotherhood of Teamsters (IBT) is a trade union, labor union in the United States and Canada. Formed in 1903 by the merger of the Team Drivers International Union and the Teamsters National Union, the union now represents a di ...
at its largest hauling operation in Alameda County, CA. The lockout lasted a little less than a month and put 900 members of the Teamsters, ILWU, and Machinists Union on picket lines and raised concerns over sanitary impact on the affected communities. The lockout was stopped when affected communities started legal actions against Waste Management. According to Waste Management officials, the company worked over three months to negotiate an agreement fair to both Waste Management and the union. The union did not want to negotiate over the company's proposals and refused to offer their own proposal unless Waste Management agreed to withdraw all proposals from the table. Oakland's City Council reached a settlement with Waste Management over the dispute in March, 2008. The company rebated more than $3 million to customers and Oakland customers received additional services over the next five years.


Environmental policy and record

In 1990, the board of Waste Management adopted an environmental policy, including a policy of no-net-loss of
biodiversity Biodiversity is the variability of life, life on Earth. It can be measured on various levels. There is for example genetic variability, species diversity, ecosystem diversity and Phylogenetics, phylogenetic diversity. Diversity is not distribut ...
on the company's properties. Waste Management also took positions around that time supporting legislation on hazardous waste reduction (1988), waste export control (1989), and protection of
endangered species An endangered species is a species that is very likely to become extinct in the near future, either worldwide or in a particular political jurisdiction. Endangered species may be at risk due to factors such as habitat loss, poaching, inv ...
(1992). Waste Management's operations consist of environmental protection, groundwater protection, environmental engineering, and air and gas management. Waste Management currently operates ten full-scale waste treatment landfill projects in the U.S. and Canada. As a member of the Chicago Climate Exchange (CCX), Waste Management made a commitment during the pilot phase to reduce its greenhouse gas emissions by four percent below the average of its 1998–2001 baseline by 2006. They have also replaced nearly 500 diesel-fueled trucks with vehicles that run on 100 percent natural gas. These new garbage and recycling trucks comprise one of the nation's largest fleets of heavy-duty trucks powered exclusively by natural gas. In November 2009, at Waste Management's Altamont Landfill, a new plant began producing 13,000 gallons a day of LNG fuel from methane gas from the landfill that had fueled an electric power plant since 1969. Waste Management has said that the plant, announced in April 2008, and built and operated by The Linde Group with state funding, is the world's largest facility to convert landfill gas into vehicle fuel. Waste Management works with environmental groups in the U.S. to set aside land to create and manage wetlands and wildlife habitats. The company's landfills currently provide approximately of protected land for wildlife; 73 landfills are certified by the Wildlife Habitat Council. In May 2011, Waste Management's Wheelabrator division agreed to pay a record $7.5 million settlement with the Commonwealth of Massachusetts for a host of environmental violations at its plants in North Andover, Saugus, and Millbury, Massachusetts. The settlement was announced on May 2, 2011, by the Massachusetts Department of Environmental Protection and Attorney General Martha Coakley's office.


Financial restatements

On November 14, 1997, the company reclassified or adjusted certain items in its financial statements for 1996 and the first nine months of 1997. On August 3, 1999, the company would have to restate first-quarter results downward, partly because of changes in the value of landfills and other assets in connection with its acquisition last year of Wheelabrator Technologies Inc.


See also

* List of waste management companies


Notes


External links

* {{Authority control Companies listed on the New York Stock Exchange Accounting scandals Companies based in Houston American companies established in 1971 Waste companies established in 1971 Multinational companies Waste management companies of Canada Waste management companies of the United States Articles containing video clips