Waste disposal industry sees dramatic ownership changes

It's time to talk trash.

The major waste disposal firms operating in Springfield have experienced significant ownership changes in the past two or three years, reflecting a nationwide trend of buyouts, mergers and divestitures.

Fortunately, in Springfield's case, "there haven't been any real disruptions of service" through all the corporate changes, said Barbara Lucks, materials recovery/education coordinator for the city of Springfield.

There are more than 30 haulers in Springfield that move the hundreds of tons of solid waste generated each day. Many are smaller operators, handling primarily residential pickup. The four largest are full-service firms that handle commercial and industrial, as well as residential business.

The ownership scramble is pronounced among the large haulers as companies come and go in search of more profit, or seek to cut losses in the highly competitive waste disposal industry.

In the past three years, Waste Management Inc. and BFI, two giants in the industry and the two largest operators in Springfield, were absorbed by smaller competitors. USA Waste Services Inc. bought Waste Management in 1998 and kept the name. The following year, Allied Waste bought BFI.

Waste Corporation of Missouri

Waste Management, based in Oak Brook, Ill., had grown into a multibillion dollar, worldwide company. But a few years ago, serious financial and management problems developed. That's when Houston, Texas-based USA Waste stepped in with a $14.8 billion buyout.

According to information on the Waste Management Web site, there was more trouble in 1999, when the Securities and Exchange Commission accused the company of giving investors a rosy financial forecast that was not supported by actual performance. Investor confidence fell, causing a drastic decline in the stock price.

The company agreed to a cease and desist order last summer after a$100 million audit, and more than $200 million in other expenses related to getting a grip on the books. All of that figured into a 1999 net loss of nearly $400 million.

To regain its balance and get back on the profit track, Waste Management held a major asset sale last year to divest all holdings outside North America and "non-core" operations in the United States, to bring in about $2.9 billion.

"Those assets were not performing to our standards," said Cherie Rice, Waste Management analyst, of the decision on what to sell.

The company had $11.8 billion in debt at the end of 1999, with a debt-to-capital ratio of 72 percent, Rice said. The goal is to shave it to $9 billion and 60 percent.

That's where Springfield and southwest Missouri come back into the picture.

As part of the sale campaign, Waste Management last fall sold $105 million worth of holdings to Waste Corporation of America, also based in Houston, which brought the proceeds to $2.1 billion.

Included were nine waste collection businesses in Arkansas, Kentucky, Missouri, Nebraska, Oklahoma and Texas; 11 landfills in Arkansas, Kansas, Missouri, Nebraska, Oklahoma and Texas; and seven transfer stations in Arkansas, Missouri, Nebraska and Oklahoma.

Waste Management disposal operations in Springfield and seven other area communities Ash Grove, Bolivar, Buffalo, Nixa, Ozark, Walnut Grove and Willard and a landfill in Wright County were part of the sale.

The company employs 77 people locally, and operations should remain basically the same, said Kevin O'Brien, vice president of the Waste Corporation of Missouri division. Adifferent color scheme and logo on the former Waste Management trucks will be seen.

Waste Corporation of Missouri is one of the two largest waste disposal companies locally, Allied Waste being the other.