Another so-called "little guy" might get gobbled up soon, and it may affect a vital consumer service.
Houston-based Waste Management Inc. wants to buy Fort Lauderdale, Fla.-based Republic Services Inc., parent company of local trash hauler Saguaro Environmental Services.
In other words, the largest garbage hauler in our area wants to buy the parent of the second-largest hauler.
But Republic isn't interested. It's already committed to buying Phoenix-based Allied Waste Industries Inc. — which doesn't currently have a Tucson presence — with plans to move the Republic headquarters to Phoenix after the merger, said company spokesman Will Flower.
The "big fish swallows smaller fish" scenario isn't anything new to Tucson. Just this summer, Waste Management bought out the beleaguered Discount Sanitation, which had struggled while providing spotty and sometimes non-existent service for more than a year to 8,000 Northwest and Southwest Side county residents.
People are also reading…
Discount has happy customers
Not all of Discount's customers were unhappy before the buyout.
Southwest Side resident Jeff Hilburger, 47, was a Discount customer for three months before the Waste Management takeover. He was satisfied with his Discount service, he said.
He said he's been through the big-company-buys-little-company scenario a few times, and it doesn't really bother him.
For now, the jury seems to be out on whether Waste Management has been better or worse.
He's still waiting for his new Waste Management barrel — which he says is bigger than the Discount barrel — and he hasn't had any recycling service yet, he said.
And although the company told Discount customers that prices would remain the same, his bill is already about $5 higher per month, Hilburger said.
Local Waste Management officials weren't available for comment.
There was a time when it seemed like Waste Management was buying everyone when they got big enough, but those days are gone, said Bill Killian, owner of Desert Dwellers Disposal and co-owner of Pima Waste of Tucson.
That might have led some companies to hope they'd be bought eventually, he said.
"You can't run a business just for the sake of selling it. You've got to do right by your customers," Killian said.
"Just a part of the game"
But he and others in the local trash industry say they aren't worried when Waste Management or other big players get bigger.
"It's just a part of the game. Waste Management on a national level is a very strong and well-run company right now. They're a solid company," Killian said.
But Killian said he still feels locally owned companies are more responsive, and every time Waste Management buys a competitor his two trash companies see an influx of business from people who only want to support local companies.
Joe Higgins, who owns Talking Trash Waste Removal, said he's noticed a similar trend.
"There's a lot of folks who don't like Waste Management for whatever reason, and I think it's actually an opportunity to pick up new business for us," Higgins said.
When big companies dominate a market, they tend to raise prices, he said.
"I actually think it's a good thing for me," he said.
As it stands, Republic has rebuffed Waste Management twice already this summer, while Waste Management is continuing to review its options, said company spokeswoman Lynn Brown.
"We're interested in Republic because from an operational standpoint, it's a good opportunity," Brown said. "It would give us operational efficiency."
Waste Management has 46 "market areas," 20 to 25 of which overlap with Republic, she said.
In those cases, Waste Management would benefit from the consolidation of routes and closer access to landfills, Brown said.
What's the right price?
Some analysts seem to feel that Waste Management just hasn't hit on the right price yet.
Waste Management's second-quarter conference call "left little doubt in our minds that the garbage company remains committed to acquiring Republic Services," Brian Nelson, a financial analyst with Morningstar Inc., wrote in a July 30 report.
He predicted that Waste Management could bid in the high $30s or low $40s per Republic share, and that "it may just take a price tag in that range to turn Republic's board against its planned merger with Allied Waste."
But Waste Management went on to offer $37 per share on Aug. 11, which led to Republic's second refusal.
Republic's Flower reiterated the company's commitment to its merger with Allied. But he wouldn't rule out a buyout if the price were right. "Republic's not for sale. That said, the board has a responsibility to review any proposals to determine what's in the best interests of the shareholders," he said.
Waste collection in Pima County
• Waste Management of Arizona Inc. Phone: 744-2600 Serves: More than 80,000 customers. Service area: Pima County and many surrounding areas. BBB record: Satisfactory; BBB member. Had 51 complaints in the last 36 months, with 22 of them in the last 12 months.
• Saguaro Environmental Services Phone: 745-8820 Serves: About 17,000 residential, 4,000 commercial and 4,000 industrial customers in Pima County. Service area: Pima and Santa Cruz counties. BBB record: Satisfactory; BBB member. Had 12 complaints in the last 36 months, with one complaint in the last 12 months.
• Pima Waste of Tucson Phone: 744-7462 Serves: More than 9,000 customers. Service area: Pima, Cochise, Santa Cruz and Pinal counties. BBB record: Satisfactory; BBB member. Had no complaints in the last 36 months.
• Desert Dwellers Disposal Phone: 682-8002 Serves: More than 9,000 customers. Service area: Northwest and Southwest Tucson, Marana, Picture Rocks, Oro Valley. BBB record: Satisfactory; not a BBB member. Had no complaints in the last 36 months.
• Talking Trash Waste Removal Phone: 888-7274 Serves: 3,000 to 4,000 customers. Service area: Green Valley, the Foothills. BBB record: No rating; not a BBB member. Had no complaints in the last 36 months.