In an interview with CNBC’s Jim Cramer, WM CEO Jim Fish described how the waste management company’s recent acquisition helps reduce volatility and hedge against more cyclical aspects of the business.
“It’s a little bit of a natural hedge for us,” Fish said of Stericycle, which largely destroys medical or hazardous waste and was acquired by WM last year. “There’s not much cyclicality to it, there’s not a lot of, there’s hardly any seasonality to it at all. I mean, we have a little bit of seasonality in, in our core business…this helps flatten that out.”
WM’s Thursday earnings report impressed Wall Street, with shares finishing the session up more than 6%. Fish discussed how the homebuilding market affects WM, saying that segment has shrunk from ten percent to probably less than half of that as a component of the business. But while he said the industrial business has been soft, Fish is more optimistic about the sector due to the Trump administration, which he described as “pretty pro business.” He highlighted aspects of the portfolio that performed well, like solid waste in landfills.
Fish also explained how WM is using automation to replace workers that operate trucks and other pieces of heavy equipment. These job markets are shrinking and the roles are difficult to fill, he said, with a 50% turnover rate for those who work on the back of trucks. He also said the average age of one of WM’s heavy equipment operators is approaching 53. Fish claimed that the company is not getting rid of human workers, but replacing them with automated technology when they leave.
“This is almost by necessity that we’re using technology to replace difficult to hire heads,” Fish said. “I think, one thing that I want to make sure I was clear on here, though, is we’re not laying folks off, all we’re doing is using attrition.”
