WMX Technologies

By the early 1990s, Waste Management, Inc., based in Oak Brook, Illinois, was the largest waste disposal company in the United States. Robust stock prices allowed the company to achieve phenomenal growth through acquisitions and expand beyond solid and hazardous waste removal into engineering, construction, and environmental consulting. To reflect its expanding business, the company, supported by the board of directors, proposed changing the name from Waste Management, Inc., to WMX Technologies. The change was approved at the May 1993 shareholders’ meeting, but its name, along with the growth that fueled it, was to have only a brief four-year lifes pan. When the WMX name was approved, Dean L. Buntrock was CEO, and Phillip Rooney served as president and chief operating officer. The conglomerate included nine independently managed businesses, including the North American operations [Page 1002]of Waste Management, which accounted for over 50 percent of the company's revenue; Waste Management International; Chemical Waste Management; Rust International, Inc., specializing in environmental and infrastructure engineering; Wheelaborator Technologies, Inc., which transformed solid waste into clean energy; and WMX Technologies and Services, Inc. Chemical Waste Management, Rust International, Wheelaborator, and Waste Management International were all publicly traded companies, with WMX holding controlling ownership.

Subsequent to the company's new incarnation, it continued its growth-by-acquisition strategy, gaining control of companies such as CRInc, a Massachusetts recycling facility, and ReSource NE, Inc., a New York City waste disposal firm. WMX repurchased shares of Chemical Waste Management and Rust International, Inc. Other divisions were seeing signs of success; Wheelaborator won a valuable 20-year contract from the city of San Diego to build and manage a sludge-processing plant. WMX was selling off other units during this time. In 1994, OHM International acquired a 40-percent stake in Rust International, Inc. (By 1998, OHM was taken over by Raytheon.) Despite the flurry of buying and selling, WMX stock underperformed relative to expectations. The company was cannibalizing its own business, as households and businesses opted to recycle, rather than send trash to landfills. Since the recycling business was not as profitable as landfill disposal, WMX did not recoup the losses. Meanwhile, the firm was investing significant resources into capital projects such as extensive data management and collection centers. Large investor groups, such as Lens, Inc., owning 750,000 shares and George Soros's Soros investor group with a 5.2 percent stake in WMX, pressured the firm to boost revenue and stock prices, which had fallen to around $25 a share from a high of over $45 in 1992.