Waste Management's Fish on Adapting to Recycling Crisis (Audio)

got a revenue boost from positive market conditions. Will speak with Jim Fish, he is the president of Waste Management. Just gott a quick give a quick heads up as well. Movie star a TV star marine who is taking theater to military bases around the world. Adam Driver. Also coming up on Bloomberg Radio today. Now to We're on Katherine Cowdery in the newsroom for a Bloomberg Business Flash. Thank you, Kathleen. The stock market heading for its worst day since it's

so off following Britain's vote believe the European Union. Retailers are posting their steepis losses in five weeks after sluggish income growth. In June, men consumers had to tap into, say things, to maintain their pace of spending. Coals and Macy's are down about flat point four percent. Randy Fishman at Deutsche Bank Securities on the decline in market volatility,

people get more comfortable with equities. As volatility goes down, and it does create a bit of a feedback loop in the market where you see markets not being volatile, people get more comfortable investing. There are also structured products that systematically will allocate back into equities as equities get safer. I think that people are more and more focused on safety. We check the markets every fifteen minutes throughout the trading day.

Down Industrial leverages down one hundred sixteen points two thirds of a percent at eighteen thousand, two hundred eighty eight. SMB five foundered down seventeen point three quarters of a percent, trading at four then as Jack is down fifty three points, the loss of one percent, trading at fifty one thirty less. Texas intermediate crude oil down fifty five cents of barrel

one point four percent at thirty two. Spackled up thirteen dollars ten tents anounce at thirteen seventy two, seventy ten year Treasury down three thirty seconds, with the yield of one point five three percent. Among today's top business story, CBS Health will add thirty five products to its list of excluded drugs. In it will no longer cover some treatments for cancer and diabetes, and an aggressive move to favor lower price treatments. CBS is targeting drugs with greater

than two price increases over three years. The Drug Benefit Manager is expanding a strategy of excluding expensive products when alternatives are available. It's two thirty two on Wall Street. Let's get an update of some of the other stories were following today right here on Bloomberg Radio. Thank you, Catherine from the Bloomberg News Room. I'm Ramy in essentio. New York City Police Commissioner Bill Bratton is stepping down.

He'll stay on the job until September. Brand's term has been marred by complaints about his so called broken window policing. President Obama was asked today whether he believes Russia was behind the recent cyber security breaches of democratic emails. I don't think that it wildly swings. What is a tough, difficult relationship that we have with Russia right now? The President also says if the breach was pulled off by Russian hackers, it will not upset his relationship with Russian

President Vladimir Putin. Bottled water will be more popular than soda for the first time in the US this year. Here's Bloomberg's Bob Moon. It's not just convenient for the switch from sugar age rinks from Nessle to PepsiCo bottling companies of wodage. A decades long campaign against tap water. Take this Fiji water commercial untouched, prompting skeptical comedian Lewis Black to push back against the trend a few years back. Awa, I think it means the end of water as we

know it. Maybe he was onto something. Bottlers and animals safe hears over what's coming out of the taps, such as Flint, Michigan's lead contamination crisis, are causing more people to seek his safe and sealed source of drinking water, Bob Moon, Bloomberg Radio and The state has approved a plan to generate half of its power from renewable sources

by the year twenty thirty. The strategy involves big subsidies to extend the operational life of upstate nuclear plans, while the state expands its use of solar as well as wind energy. While many environmental groups cheer that policy, some oppose what they call a costly and unnecessary investment in nuclear power. Global News twenty four hours a day, powered by more than twenty six hundred journalists and analysts in more than one d twenty countries. I'm Ramie in Essensio.

This is Bloomberg, Catherine, thank you. Now, let's get a quick update of the benchmark. Stone Industrial leverages down one hundred sixteen points at eighteen thousand, two hundred eighty eight, smp F I funded down seventeen point four. Then Nassakistan fifty three points at fifty one thirty. And that's a Bloomberg business flash. You're listening to taking stock with Pim Fox and Kathleen Hayes on Bloomberg Radio. Waste Management. It

raised its twenties sixteen earnings guidance. It reported better than estimated earnings the trash collect just saying that market conditions. In fact, it is the number one garbage disposal company in North America. It said that market conditions were positive for the company and for the industry. Here to tell us more is Jim Fish he is the president of Waste Management newly and pointed the president of Waste Management joining us from Houston, Texas, Jim Fish, thanks very much

for being with us, Thanks for having me. Just give people a little bit of an overview of waste management. I know that you've got over twenty million customers, almost two hundred and fifty landfills, but maybe just give people an idea of the size and scale of your operation. Yeah, so we have we're an integrated waste holler with what's recycling as a huge component of what we do. We collect trash from as you said, over over twenty two

million customers. We've got about two hundred and fifty landfills, we have about a hundred and fifty recycled facilities, we have over four hundred garbage collection facilities. So we're we're a fully integer at player within North America. You know, you just reported your earnings a week or so ago, and even though some are saying look out tough times recycling business, Waste Management continues to see its stock rise.

Your stock that is reaching a six month high recently, uh well, up from fifty two on your stock press at the start of year forty seven. This time last year. What's the dynamic here? Well, yeah, almost a six month time but also also close to an all time high. Um. I think when you look at recycling, uh, you know that that's it's almost kind of a good news and

the bad news here. You know, we're closer to the trough and recycling we're making a lot of progress on on you know, improving that business, but we're much closer to the trough than we are to the peak, and yet still producing strong cash flows and and and a fifty two weeks or an all time high stock price. So I think what you're seeing is that the rest of the business, aside from recycling is is doing quite well, and that's where the strength is coming from. Are we

seeing applications of technology to waste and recycling? I keep thinking of robotics. I mean, is there a time when we're going to see intelligent robotics systems process waste and sort recyclable materials. Well, for sure, we We've actually have a pretty automated recycled facility today with things like optical readers that recognize the type of plastic that's coming up a conveyor belt and and it shoots a stream of air at that at that tide bottle and and uh

and shoots it into a bin. So so there's a lot of technology and these recycled facilities today, and I think that will only increase. So tell us a little bit more about what has differentiated you from other companies in this space. Well, I think first and foremost, Uh, you know, we've taken a strong stance on pricing. And you know the way we've referred to pricing in our industry is there's there's not much the way of price elasticity. Nobody says, Okay, now they've lowered the price low enough

that I'm gonna create more trash. It's not like big screen TVs where you where you lower the price of big screens and you might create enough demand to to put you economically ahead. So really, the only right answer with respect to our business is to increase price, and we've taken a leadership role there. Does that mean that you will forego certain, let's say recycling contracts because they're

not going to really help your margins? Well, no, I think what we you know, we're looking at recycling as as you know, in need of of improvements. Uh, doesn't mean we won't renegotiate some of these contracts, and we're

doing that. We're probably away through renegotiation. I think what we're doing with with municipalities, and we've done quite a bit of it already, is saying, look, uh, the old model, where you had commodity prices at hundred dollars, in our processing costs at seventy, we were willing to pay you your your share of the commodities on the back end up front. When commodity prices are at seventy in our processing costs is seventy, it doesn't there's nothing to share.

So we've we've you know, gone back and renegotiate the contracts and said, look, uh, you know, irrespective of where commodity prices are, we want to get paid our processing cost and some acceptable margin up front and then will split what's left with with the customer. Better be careful you get too efficient, you won't have any business list. But you know, if people be so efficient recycly, they

won't do it. But I'm as I'm thinking about growth and where you go next, I'm wondering a bit more about your gas to energy facilities in the United States, because that's you know, the whole energy industry has been under pressure where how how does that work for you and how much is it adding to the profits? So we we have gased energy at UM well over a hundred and fifty of our landfills. UH. The only landfills that don't have it are are very small landfills in

terms of volume. So at at all of our medium and large landfills we have gas energy and those produce h somewhere depending on the size of the landfill. We have some lantils that that produce as much as tim mega whites and mega wats of energy out of them. We have some that are as small as three. But but there's a fair amount of energy production going on.

And we do things like like UM power part of the University New Hampshire and UH there's a fab facility in South Carolina for automobiles that we power a portion of that uh fabrication facility. So we really are producing energy out of out of what we uh the trash it's going to these landfills. Many thanks to Jim Fish, president of Waste Management based in Houston, Texas, navigating the

twists and turns of the recycling garbage industry. You could say effectively, and guiding his company to nearly record earnings last week. I'm Kathleen Hayes along with Pim Fox on taking Stock. This is Bloomberg coming up on taking Stock. He was a jarhead and devil dog, a marine Adam driver, also an actor. Featured in Star Wars episode seven. He's bringing theater to the military.