More Monopolistic Trickery
by WMX!

On February 2, 1998 Waste Management and BFI announced their decision to stop competing with each other in twelve major US markets! Having been caught by the Justice Department last year for local monopolistic practices, the two companies have now announced the sale of their $84 million of business in twelve cities. This action means that in most of these twelve cities one waste collection company will overwhelmingly dominate. It will free up both companies to drive harder bargains with municipalities who wish to privatize their waste collection operations. It will result higher prices in waste collection which will enable the old fleet of WMX to be modernized with profit maximization. It is assumed that WMX initiated this agreement since it has old trucks, a corporate crisis of management and profits, and a history of monopolistic practices for many years.

In the agreement WMX will take over BFI businesses in Dayton, Ohio; Grand Rapids, Michigan; Madison, Wisconsin; Peoria, Illinois; Portsmouth, New Hampshire; Rochester , New York; and Salida, Colorado. Sales have amounted to about $40 million in annual revenue. WMX sold to BFI $44 million of business in Buffalo, NY; Fresno, CA; South Shore, Massachusetts; Youngstown, Ohio and Hawaii.

In Dayton, Ohio where WMX is dominant and with the local landfill, BFI only had seven local garbage trucks and crews. Rumpke of Cincinnati is the main WMX competitor with its nearby Hamilton County landfill and the contract for the county transfer station (a former incinerator recently closed). There is a third small local company (Dempsey Waste Systems). Rumpke claims there will still be competition: "I think the BFI and Waste Management merger will have little impact, "said Rumpke's district manager Kyle Aughe. "We are all competitors looking for a price advantage and that won't change." But instead of three big competitors, now there are only two! The Dayton Daily News (2/6/98) reported, "Some, but not all people, in the local industry believe that Dayton-area businesses may be faced with higher monthly bills for commercial trash disposal."

But WMX local division president Tom Koogler of Koogler-Suburban, reported in the daily paper, "We had some markets where we were the tail of the dog and BFI had areas where they were the tail, including here in Dayton. We basically traded tails." Koogler is correct in Dayton, but not in the commercial trash area where it has been very competitive. To account for $84 million of business, Koogler"s statement is probably not applicable in most of the other eleven cities. Competition is reduced and that is un-American (unless you are powerful and influential with the antitrust people in Washington)! Tremendous pressure has been put on WMX management to increase profits in the last year. This agreement will certainly do that, if the Justice Department allows it which it evidently have.

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