Wheelabrator Technologies, Inc. History

4 Liberty Lane West
Hampton, New Hampshire 03842

Telephone: (603) 929-3000
Fax: (603) 929-3139

Wholly Owned Subsidiary of Waste Management Inc.
Incorporated: 1985
Employees: 850
Sales: $798 million (2002)
NAIC: 562213 Solid Waste Combustors and Incinerators

Company Perspectives:

As a leader in renewable energy, Wheelabrator is committed to customer satisfaction and long-term relationships while protecting the environment.

Key Dates:

American Foundry Equipment Company is established.
The firm changes its name to The Wheelabrator Corporation.
The company--now operating as Wheelabrator-Frye Inc.--acquires Rust International.
The Signal Companies Inc. acquires Wheelabrator in a $1.5 billion deal.
Wheelabrator goes public.
The company becomes a subsidiary of Waste Management Inc.
Waste Management purchases the remaining shares of Wheelabrator that it did not previously own.
Wheelabrator reaches the milestone of converting 100 million tons of municipal solid waste into energy. proach enabled the company to maintain consistently high performance from its plants.

By this time, Wheelabrator Technologies was poised for further growth and was often cited by analysts as a promising company. Virtually no other company had as much experience in gaining public support for waste disposal systems or as much expertise in designing them as Wheelabrator did. With virtually no alternative to landfills, a growing number of cities were likely to seek large-scale waste disposal solutions from Wheelabrator, putting it in an enviable position among its competitors.

In the mid-1990s, Wheelabrator was operating waste-to-energy plants in Connecticut, Florida, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, Pennsylvania, and Washington. Having entered the independent power production (IPP) market in the late 1980s, the company remained heavily focused on constructing and operating small power facilities that utilized waste fuels. Wheelabrator was soon overseeing eight of these plants that were located in California, Florida, Maine, and Pennsylvania.

Meanwhile, Waste Management began to experience financial difficulties which eventually led to faltering profits. While many of its shareholders called for a major restructuring that included the sale of its Wheelabrator unit, Waste Management instead took a different route. In 1997, it made a play for the remaining shares of Wheelabrator. The company's original $15 per share offer was rebuffed by Wheelabrator shareholders who felt the bid undervalued the firm. The dispute was resolved, and in 1998 Waste Management purchased nearly 53 million shares of Wheelabrator--at $16.50 per share.

Wheelabrator entered the new century on solid ground. In 2001, the company reached a significant industry milestone--the conversion of 100 million tons of municipal solid waste into energy by its 16 waste-to-energy facilities. According to a June 2001 Waste Treatment Technology News article, the company's accomplishment stemmed from its "success in developing progressive public/private partnerships; integrating source reduction, recycling, and landfill options; pioneering new energy and environmental technologies; and demonstrating operating procedures that have set high industry standards for efficiency and regulatory compliance."

The company bolstered its holdings in 2003 when it agreed to partner with The Counties of Warren and Washington Industrial Development Agency (IDA) to purchase a waste-to-energy plant in Hudson Falls, New York. The plant, previously run by Foster Wheeler Ltd., had been a cash drain for years and both Wheelabrator and the IDA were optimistic that it would start running at capacity--burning 126,000 tons of trash a year--after the takeover was complete.

With the leading provider of waste management services in North America as its parent, Wheelabrator was well positioned for future growth during this time period. The demand for environmentally friendly and alternative methods to managing solid waste would no doubt continue to increase in the future--and along with it, growth opportunities for the company in the years to come.

Company History:

Wheelabrator Technologies, Inc. develops, owns, and operates commercial waste-to-energy facilities that convert over 23,000 tons of solid waste into clean electricity each day. The company--a subsidiary of Waste Management Inc.--operates 16 plants in Connecticut, Florida, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, and Washington. It also has eight independent power producers in its arsenal that burn solid waste, transferring it into steam to be used by electric utilities. Overall, the company's plants provide enough electricity to power over 800,000 homes. By 2001, Wheelabrator had converted over 100 million tons of municipal waste into 50 billion kilowatt-hours of clean energy.


The American Foundry Equipment Company, Wheelabrator's predecessor, was established in 1911. The name Wheelabrator originated in Mishawaka, Indiana, in 1932. The company manufactured a "wheelabrador," a rotating three-sided wheel that sprayed shot onto a surface to abrade away paint, plaster, rust, and other substances. The wheelabrador collected dust and other particulate matter resulting from the process in a baghouse enclosure which kept the air clean. When the company took its name, it was not permitted to copyright a generic term and therefore altered the spelling to Wheelabrator for use as a company moniker. (The company's current logo is a representation of the triangular device.)

Expanding into Environmental Products in the 1960s and 1970s

Wheelabrator remained a small manufacturer of these and other devices well into the 1960s. In anticipation of Clean Air Act legislation, the company expanded interest in environmental products by acquiring a license for electrostatic air cleansing technologies from the German company Lurgei. This led to the establishment of the Wheelabrator Clean Air Company in Pittsburgh, which manufactured systems that electronically removed dust, soot, and other particles from flue gas.

Wheelabrator was then acquired by a small conglomerate called the Equity Corporation. The company was paired with another subsidiary, Frye Copy Systems, a manufacturer of printing inks and carbon paper. Equity encountered severe financial problems in the mid-1960s. The company was taken over and reorganized by a New York investor group led by Michael Dingman of the Burnham securities firm. Dingman eliminated the Equity company and merged the Wheelabrator and Frye units.

In 1968, the company, now called Wheelabrator Frye, procured Rust International from Litton Industries. Rust was a construction engineering firm that held an exclusive license to the technologies of von Roll, a Swiss engineering company. The von Roll technologies included highly efficient mechanical processes which Rust applied to incinerator designs.

With the engineering expertise of Rust, and with exclusive access to the Lurgei and von Roll technologies, Wheelabrator built its first waste-fueled energy plant at Saugus, Massachusetts. The plant came on line in 1972, at the height of the first environmental movement in the United States. A second plant was not built until 1983, when more efficient plant designs made incineration cheaper.

Changes in Ownership in the 1980s

Wheelabrator Frye was acquired by The Signal Companies Inc. in 1983, for $1.5 billion. Dingman, chairman of Wheelabrator Frye, was subsequently named president of the new parent company. Wheelabrator, its name changed to Signal Environmental Systems, continued to develop new resource recovery systems in areas where landfills were nearing capacity and garbage dumping fees were rising. As a result of the Signal merger, the unit took on numerous engineering operations of the parent company, including engineering services for the petroleum, paper, metals, and chemical industries.

In August 1985, Edward Hennessy, chairman of the chemical giant Allied Corporation, engineered a merger with Signal--then an aerospace, electronics, and engineering company. Three months later, Allied-Signal resolved to spin off all operations not related to the core businesses. The company identified 35 units to sell, including Frye and the Wheelabrator environmental systems unit. Rather than dispose of the companies individually, a process that would take more than two years, Allied-Signal created a holding company under Michael Dingman. Dingman, a rowing enthusiast, named the new corporation after the English rowing mecca, Henley. One of the largest subsidiaries of the new Henley Group was the environmental systems unit, which took the name Wheelabrator Technologies.

As an independent organization, Henley was run more as an investment company than an operating company. In 1987, as Henley's Wheelabrator, Fisher Scientific, and other manufacturing groups prospered, Dingman engineered a series of creative schemes to maximize shareholder value. He took each of the units public, selling non-controlling interests to shareholders and simultaneously raising cash for other investments while gaining independent stock valuation. Shareholders paid a premium for the opportunity to directly share the risk of operating single-industry divisions with the parent company.

After dabbling with substantial investments in the Santa Fe South Pacific Corporation during 1988, Dingman turned Henley's focus back to revaluation schemes. In a so-called "reverse spin-off," he created two independent companies, Wheelabrator Group and a new Henley Group, which divided the assets of the old Henley company. Over the next three years, Henley's investment in Wheelabrator dwindled to less than 10 percent of the company's shares. Phillip Rooney took over as head of Wheelabrator.

While Dingman was ringing up his successes with share value maximization, he oversaw a significant series of events in the structural development of Wheelabrator. Shortly after being spun off from Allied-Signal, Wheelabrator exchanged 22 percent of its shares for the underperforming waste incineration assets of rival Waste Management, Inc. The agreement was more of a business arrangement than the result of a competitive battle. Waste Management had established an incineration business purely as a defensive measure against competitors such as Wheelabrator and the Ogden Corporation, but lack of engineering know-how and pressure from various forms of public opposition hindered Waste Management's ability to enter the business on a significant and profitable basis. The deal with Wheelabrator included exclusive rights to dispose of incinerator fly ash at Waste Management facilities and other transferred properties, which was essential for Wheelabrator's growth as new incineration plants could not be built without guaranteed ash disposal resources.

Meanwhile licensing for disposal sites had become nearly impossible to gain due to strong public opposition. Wheelabrator responded by conducting excellent public education campaigns and proposing to work with any public advocacy group that opposed Wheelabrator incinerators. The company sponsored several series of public hearings, offering to answer any questions, and taking every opportunity to demonstrate the environmental advantages of incineration over landfills. In addition, as landfill charges rose to more than $50 per ton and incineration costs fell to $30, Wheelabrator could demonstrate growing economic advantages to its methods of disposal. Once public approval was gained for construction of an incinerator, Wheelabrator would conduct regular tours of the site, inviting the public to inspect the operation personally and ask questions. By maintaining an honest and open relationship with the public, Wheelabrator managed to neutralize the NIMBY, or "not-in-my-backyard" syndrome.

Wheelabrator plants were placed strategically near landfills that were nearing capacity and where power cogeneration would yield profitable electricity sales. Those in the north were equipped to provide electricity in the summer and industrial heating steam in the winter. Plants were built near large metropolitan areas in Washington, Florida, Maine, New Hampshire, Massachusetts, and Maryland.

While more economical and environmentally friendly than landfills, incinerators still had their problems. Highly toxic materials, such as car batteries, were frequently put into the furnaces. To guard against further environmental harm from acid gas and dioxins, Wheelabrator fitted its plants with calcium sprayers and fabric filters that "scrubbed" harmful emissions from the exhaust.

Operating as a Waste Management Subsidiary in the 1990s and Beyond

Wheelabrator once shared offices with the Henley Group in Hampton, New Hampshire, but relocated to suburban Chicago in 1992 and eventually made its home in New Hampshire. Its association with Dingman's Henley Group continued, but Wheelabrator's business relationship with Waste Management grew. In 1990, Wheelabrator became a majority-owned subsidiary of Waste Management. Through a merger, Waste Management secured control of 55 percent of Wheelabrator's common stock.

With its experience in operating 14 incinerators and designing pollution control systems, Wheelabrator was established as a leader in building water and air purification systems by the early 1990s. The company's Rust International subsidiary was the sixth largest engineering and construction contractor in the United States in 1992. In addition to engineering strengths, Wheelabrator differed from its main competitor, Ogden, in its offering of fully integrated plants based on exclusively licensed technologies built by Rust International. This standardized ap-

Further Reading:

  • "After Years of Losses, Trash-to-Energy Plant in Hudson Falls, N.Y., Is Sold," Knight Ridder/Tribune Business News, October 3, 2003.
  • Cook, James, "Not in Anybody's Backyard," Forbes, November 25, 1988.
  • ------, "Garbage into Gold," Forbes, January 22, 1990.
  • Hepp, Mark P., and John M. O'Sullivan, "Improving Efficiency of Energy Production from Wastes," Solid Waste & Power, January/February 1992.
  • Jantzef, Monica F., "Bresco, Three Years Later," Waste Age, October 1988.
  • Luoma, Jon R., "Using New Incinerators, Cities Convert Garbage into Energy," New York Times, August 2, 1988.
  • "A Sweetened Bid for Wheelabrator," New York Times, December 9, 1997, p. D4.
  • Tritschler, Don, "Public Schools, Private Interests," Worcester Business Journal, January 6-19, 1992.
  • "Waste Management Turns on the Compactor," Business Week, November 24, 1997.
  • "Waste Management/Wheelabrator Merger Terms," Haznews, January 1, 1998.
  • "Wheelabrator Marks Milestone," Waste Treatment Technology News, June 2001.
  • Zemba, Stephen G., and Laura C. Green, "Perspectives on Mercury," Solid Waste & Power, May/June 1992.

Source: International Directory of Company Histories, Vol.60. St. James Press, 2004.