[00:00:00] Liz Bothwell: Hi, everyone. Welcome to Waste360's NothingWasted! Podcast. On every episode, we invite the most interesting people in waste recycling and organics to sit down with us and chat candidly about their thoughts, their work, this unique industry and so much more. Thanks for listening and enjoy this episode.
[00:01:34] Liz Bothwell: Hi, everyone, this is Liz Bothwell from Waste360 with Bill White, Market President of Commerce Bank and co-owner of Estes Waste. Welcome, Bill and thanks for chatting with me today.
[00:01:46] Bill White: Good morning, Liz, glad to be with you and looking forward to it.
[00:01:50] Liz: Bill, please tell us a little bit about your background and your journey to the world of waste and recycling.
[00:01:57] Bill: It's funny you ask that question, Liz. When I'm introduced in the last few years, I've often introduced myself as being in cash and trash because I'm the only person I know that has actually served as the president CEO of a publicly-traded financial institution and also, been a co-owner of a waste company. My background is unique, and that I've been in banking for 31 years in the CEO of a couple of different institutions, we serve as the market president of Commerce Bank in Indiana.
Also, my wife, I and my in-laws have been in and around the waste business for many years, we are in our second iteration of the industry today, as I speak with you and that we were in business previously. We had two companies that we operated, we sold those to Waste Management in 2009 and after a non-compete expired five years later we decided we were going to reenter the industry. Now we've been back in for about five and a half years and it's been an interesting ride.
[00:03:11] Liz: Now, that makes sense because I did read on the Estes website that you're the newest company with the most experience, more than a hundred years I guess, among all of you, that's pretty amazing.
[00:03:25] Bill: Yes, we've been very fortunate to have had a number of our former employees rejoin our team, some came as soon as we reopened our doors and then others came over time. But we just have a collective group of people with a whole lot of experience, and I find that if you want to succeed in the waste industry today, it certainly is helpful to have people with a lot of experience on your team.
[00:03:54] Liz: Definitely. Like you said, you have such a unique combination of banking and environmental services experience. How has the banking background helped you tackle waste and recycling?
[00:04:07] Bill: I think having my 31 years of banking experience certainly gives me a deeper knowledge of the fundamental financial aspects of the waste industry. I think that can be a competitive advantage, I find in the industry of independent haulers- or I should say the area of independent haulers. I know a lot of people from the industry that are very good waste operators, but they could improve their financial skills dramatically and really enhance the performance, and viability of their businesses.
For me, I think, having that solid grasp of really everything related to the financial aspects of our industry is really a differentiator for our company. From the get-go, we have done a lot of analytics on our numbers, we can tell you our costs down to the hour that it takes us to operate, and a lot of our competitors and some of the friends we have in the industry don't always do that type of analytics.
If I ask them, "What does it cost you to operate per hour?" They'll look at me like I'm from Mars, and to me, I think, it's critical to really have your arms around the expenses side of your business, as well as the revenue but expenses especially, before you begin to go out and pursue new business, because if you don't know how much it cost you to be in business, how do you know how to adequately price new clients that are coming on board, or bid on contracts or proposals?
[00:05:46] Liz: Right. That's a great point. What do you wish some of the smaller and midsize companies knew about running their business? Would it be a better handle on the financial?
[00:05:59] Bill: I think it would. All too often, people tend to overcomplicate operating a business period, whether it's the waste industry, the banking industry or any other industry. In my time as a banker, what I found is the best performing or most successful clients and/or businesses that I've had, generally have a very good working knowledge of finance and financial analysis for their business in their industry.
Beyond that, they also understand basic leadership and the importance of being able to work on their business, not in their business. One of the things that I find it's interesting in the independent hauler world, is a whole lot of people that I know that are in the industry. They'll spend, in my opinion, an enormous amount of time working in their business as opposed to on it.
What I mean by that is it is not unusual to find owner-operators that are driving their trucks and delivering their boxes, they're doing all the work. Maybe they're in the shop doing the mechanic and the preventive maintenance work, in lieu of hiring people that can do those things, which would then free them up to focus on the bigger picture strategic things to decide where they're going.
Because so often in any business, if you're so busy running it and you don't take time to raise your head above the clouds and look and see where you're going, or maybe where you'd like to go, are you ever going to get there?
[00:07:43] Liz: Right, it's so true. I think that advice can be used across industries really.
[00:07:49] Bill: Absolutely.
[00:07:50] Liz: Now, do you think it's easier to buy rather than build in this industry?
[00:07:54] Bill: Well, that is a good question. Yes and no. I think if you have the resources and the ability to really analyze a potential acquisition, then certainly buying can help you get a warm start in the industry. Again, over the course of my career in both industries, what I found is acquisitions are only as good as the due diligence that goes into them and the results that come after them.
In other words, I've seen a lot of people get so wrapped up in doing the deal that they don't do as good a job on the analytics going in, and then they don't get the results that they expect on the backside. But if you have the financial resources, the capital, to go and acquire some of the independents, or a group of them potentially in a dense area. For example, on the commercial side of our business, the front-loader, the residential area, we talk a lot about density, in other words, getting back to back, to back, to back, to backstops.
I think that same rule could apply in the acquisition business, if you can get a handful of acquisitions in one geographic area that then allows you to get density and efficiency, those can work really well. But if you're starting from scratch, and you have the experienced players on your team, you have the contacts and relationships that can feed your business, the beauty of a startup from scratch is you don't have cultural issues to overcome.
Because what I found in the mergers and acquisitions arena is more times than not, the challenges post-acquisition that buyers and sellers endure aren't the big things, like how much you're going to pay for the business. It's almost always the little things, the cultural things, the things they come up such as, "We don't do it that way, we don't do it this way." Or, "Why aren't you doing it that way? Why aren't you doing it this way?" It creates stress, pressure, and frustrations.
I feel that's a bit of a non-answer to your question. I guess to say that either can be effective, but both require the same set of principles being applied. It comes down to what's your timeline, if you're in a hurry and you want to move fast, acquisitions allow you to ramp up faster. If you have more of a longer-term view, then starting from scratch with adequate capital and resources can give you a bit of a smoother run over time because you're not constantly fighting cultural and other issues that can sometimes spring out of acquisitions.
[00:10:52] Liz: I think that was a great way to answer because you've shown both sides of the coin and the benefits of both, so I think that's very helpful. I know you've mentioned in the past- and you may have alluded to this a little bit in what you just answered- but the old way of valuing companies is changing, could you tell me more about that?
[00:11:13] Bill: The thing that I find very interesting about our industry still today in 2019 as we approach 2020 is it is still a very old-school industry that, to a great extent, operates very much like it did 50, 60 years ago, and that has not changed as rapidly as other industries. While technology has affected our industry in many ways, the day-to-day operations and certainly the M&A valuation propositions, haven't necessarily kept up with the times.
For example, in my time in the industry it has not been uncommon for sellers to assume that they could get somewhere between two to three times their revenue in an acquisition if someone wanted to purchase them. When I asked some of the people I know about the basis for those numbers, they really can't explain why they believe that, they just think that's what it is.
If you say, "If you were to sell your business today, what would you take?" "Well, I'd have to have three times of my sales or maybe, I'd have to have two times my sales." And if I say, "Well, how do you get there?" They look at me like I'm crazy. Then, if I begin to approach it from, say a banker or an investment banker's perspective, which is, if I buy your business, Liz, and I pay you, just for the sake of discussion, $10 million for your business, I'm going to expect some return on my $10 million.
In the investment arena, we call that ROI, return on investment. Though it's not just that I'm going to give you $10 million to make you wealthy and let you go off to some warm climate and have drinks with umbrellas for the rest of your life, but rather I'm doing a business, I'm investing in something. I don't like investing in a CD or a stock in the stock market, and I want a return on that investment. The question becomes, "What return am I willing to accept on my investment?"
Again, if I'm talking to you about your business and you say, "Well, hey Bill, my business does five million a year in revenue and I would sell it for 10 million." My first question is going to be, "Well, Liz, what kind of net income do you have?" More importantly beyond your net income, "What's your cash flow?" You would be surprised, and your average listener would be surprised at how few clients in my entire 31 years in the banking industry, and certainly in the waste industry, have any clue how to accurately calculate the cash flow of their business.
Again, I'm explaining, if you've got a five-million-dollar revenue business and you want 10 million for it, as a buyer of that business potentially, I got to be able to show what return am I going to get on that $10 million. Let's just say that I would like a 10% return on my money, then I would need to be able to generate a million dollars a year in cash flow. Do you understand, Liz, the difference in cash flow and net income? It's not a trick question, by the way.
[00:14:33] Liz: [laughs] I give up, please explain.
[00:14:36] Bill: The difference in net income and cash flow. Well, cash flow is the most important thing that investors, and certainly bankers look for when we're looking at either buying businesses or loaning money to businesses. Why do we care by cash flow? Because cash flow is the money that those businesses have available to either their shareholders or their investors, or available to service their debt or their obligations.
That cash flow is almost always different than the net income because your net income is just that, it's your net income. But cash flow is your net income plus things that provide cash for you to use in the operations of your business.
Again, back to my comment, if I'm looking at a business that wants $10 million from a buyer, and they only do 5 million a year in revenue, then here's the simple math, if I pay you $10 million business that does 5 million in revenue, and you have to generate a million dollars for me to get a 10% return on my business or my investment, then that means you have either cash flow or net income that equals 20% of your annual revenue. There aren't a lot of businesses that do that.
[00:16:11] Liz: Right. I believe it. Bill, I just spoke with Jeff Kendall from Laurel Mountain Partners and he said one of the major differences over the years relative to deals is that there are fewer deals to be made now, but yet he feels bullish on the industry and he said, "Deals are there and it's still a great time to sell, even though there were fewer deals to be had." Do you feel the same way?
[00:16:38] Bill: I do think the same, I think that's true.
[00:16:45] Liz: Do you think the healthiest of companies will be the ones who would get bought and grow at this point?
[00:16:55] Bill: I would not necessarily agree with that. You mentioned the gentleman who's clearly in the industry of doing acquisitions and that sort of thing, and while I won't always disagree with the investment banker folks, those smart investors, I would say that the most well-run companies will get the best prices, but I think those that sell, often are not the best-performing companies, they may be companies that are struggling.
As a buyer- and again, in my banking career, I've got a pending transaction right now that will be my 13th transaction that I've done, and the waste industry I've done transactions as well- what I find is as a buyer of businesses, sometimes when a company stubs their toe or they're struggling, you get a better deal as the buyer because the other company's owner, they may have what I call owners fatigue, they're tired of the battle.
Today in our industry, for example, there's a nationwide shortage of CDO drivers, and everyone I know that's an independent hauler and even those that are the larger operators are struggling to find and retain CDO drivers. While you wouldn't think that would prompt people to sell, if you struggle to get qualified drivers in the seats to run your routes and service your clients long enough, eventually you're just going to get tired of the headache.
This same rule applies in the banking industry where a lot of times boards and executive management just get tired of the regulatory burden in that industry and they decide, "Maybe we just want to be done."
What's the difference in the top-performing companies and those that are just tired, they're fatigued and they don't want to continue? Well, I think the difference is that the ones who are the better performers, as I already said, are going to get the better prices in a transaction. If they sell, they'll get a higher number than someone who's maybe not doing so well because, at the end of the day, every buyer always looks at their return on investment to determine the price they're willing to pay.
As an investor myself, I've bought and sold a number of companies and businesses over the years, and I always start my investments looking at a double-digit return. That doesn't mean I always pay double digits, I start there with the theory that I don't know what I don't know.
If I can buy your company with me believing confidently I can get a 10% or better return on my investment, then by the time I get the business under my control, figure out what I didn't know that maybe I missed or wasn't fully disclosed in the process, then my net return is still going to be something that's acceptable. If by chance I did cover every possible scenario and nothing was missed at all, then I still got a nice double-digit return.
That to me is the thing that drives these transactions. Those that are underperforming, for example, in our industry there are a lot of independents that may not have the capital resources they need to go buy newer equipment, newer trucks, newer boxes, all of the things that it takes to operate a waste hauling business today.
When they go to sell that business, they are not going to get the same value proposition for a bunch of old rickety equipment that a buyer is just going to have to retire as soon as they get it. The other thing that affects those numbers is if the buyer is maybe already in market and they acquire the other company, the smaller company, and it complements everything they do, that can also help get a better price.
It's not simply, "Is your company top-performing? Is your company full of brand new, very well operating equipment?" It can be, do you bring a market that the buyer wants to be in or is already in and they can tuck you in nicely to make it work really well, to give them a great return. That same rule applies in M&A across all industries, it's not unique to the waste industry.
The difference is the waste industry is still capital intensive on a day-to-day basis that a lot of people get to a point where either they're tired of writing checks to support their business, or maybe they're limited in their capacity to go borrow to get the equipment they need to service their clients.
Or again, maybe they're just tired, maybe they're nearing retirement and they're thinking, "You know what? I've only got two to three years and I want to retire so I need to find an exit strategy." Because maybe they don't have kids or other family members or others that can step up and run their business.
[00:21:59] Liz: Right, that's so true, so many different dynamics and nuances you have to keep in mind with every deal.
[00:22:05] Bill: Yes, absolutely.
[00:22:06] Liz: Do you think small and independent haulers are prospering as well as the bigger companies in this good economy?
[00:22:15] Bill: I think that they should be. If they're not, I think they should be extremely concerned because if you're not able to do well in this, which is arguably the best economy we've seen in our adult lifetimes, then what are you going to do when the economy moves the other way? And we know that always happens, the economy is cyclical, it goes up it, goes down, we're in the 11th year of an increasing, expanding prosperous economy in the U.S. At some point that is going to soften.
When I put my banker hat on, and I listen to economists that I listen to and I hear speak occasionally, they're all indicating that they suspect there's a very good likelihood of some slowing of the economy, if not a move to recession, sometime in the next 18 to 24 months. My concern would be if I were an independent hauler, if I weren't able to make a decent return today operating my business, then I would be asking myself, "What am I going to do differently if the economy turns?" Because in a down economy, everything softens up.
Even if you have contracted business for residential or for commercial front load work, even those businesses and maybe those individuals, if they lose jobs, if they don't have the resources to pay you, it can become difficult to collect your money. The industrial side of our business or roll-off hauling usually is the leading indicator of what's going on with the economy, because as building and development and commercial work or the industrial work tends to slow, that piece of our business slows down first.
Again, my experience with a lot of independents is we get so busy running our business that we're not putting our head up above the clouds, like I said at the beginning of this discussion, to look down the road and say, "Where are things going and am I prepared for that? Would this be a good time, for example, to go out buy three to five new trucks because things are so good?"
"Or would this be the time to make sure you're maintaining all your current equipment, doing all the preventive maintenance you need to do because you don't want to be adding on significant debt at a time when maybe the smart people, the top economists in the U.S. are indicating things could soften in the next two years?"
Just things to consider that I find when I talk to my peers in the industry, they rarely bring these topics up, I'm the nerdy one that is saying, "Wait a minute, did you hear the economist from Stifel Nicolaus the other day? What they said about that or Bank of America?" And they're looking at me, "Economist? No, I'm busy delivering boxes, I don't have the time to listen to that".
[00:25:09] Liz: Right, [laughs] so true. It's a good point and someone needs to say it. To your point, even with the strong economy, challenges still do exist. What are some of the biggest challenges you see in the industry right now? I know you mentioned the driver shortage, what else are you seeing?
[00:25:31] Bill: I think I cannot stress the driver shortage enough, and one of the things that I suspect will come out of that is, as technology continues to advance. We already know that there are self-driving cars on the road, they're actually already some self-driving semis that are good for point-to-point, there are not any that I'm aware of that have been put in place yet that can do residential or commercial type work, but there are those that can go over the road.
I suspect if we don't come up with a good solution in the U.S. for the driver shortage in the coming 24 months or so, I think we may see technology step up and replace the need for as many drivers. Now, that's a bit of a stretch and some people will think I'm crazy for believing that, but in the last month for the first time, I happened to be able to drive, to get behind the wheel of a self-driving vehicle for the first time. I was very skeptical but after I did it I was convinced this is where things are going and it is a game-changer for our industry.
The other thing that I think is really continuing to be a challenge for industry is the ability to hire qualified mechanics to work in our shops, whether you're large operator or small operators, finding qualified people to be available, particularly in our industry where many of us operate near 24/7 schedules, it's hard to find people that have the required credentials to work on our trucks, whether it be preventive maintenance or other stuff. Then it's even more difficult to find those that have the credentials that will work the overnight shift so they're there when your early morning trucks leave, I think that is really difficult.
Then the last big issue I see facing our industry- and this is one that's been there for a long time- it is extremely difficult to finance a waste business, whether you're small or large because by and large, my peers in the banking industry don't quite understand how we make money, and therefore they're always hesitant to lend to us. It is not easy.
I've spoken at Waste Expo two different times and talked about the critical importance of finding the right banking partners, number one. Number two, understanding what bankers want to see, so when you go see them, you can talk their language and get what you want because you're giving them what they need rather than going in, dumping a bunch of data on their desk and saying, "I need money, would you owe it to me, please, oh please?" And you have got to wait for them to figure out what it is you do.
I think those are three big things for us right now, I think the need for drivers, I think the need for capital and the need for qualified people to do repairs and maintenance on our equipment, are really, really big. I think the market is still good, I think there are a lot of independents out there that have a lot of opportunity to continue growing, but I also think that we'll continue to see consolidation in our industry as the larger companies get bigger and as smaller ones either get fatigued or just struggle.
Let me come back, there's a fourth one that I think is also pretty critical, and that is many of the old school waste people I see, that are pricing based on commercial work, for example, on front-load trash hauling, they still want to price by the yard, they don't go through the analytics required to price customers based on their actual weight, and times, and other things.
The big challenge that our industry faces- and I'll talk about the Midwest right now because I'm not as familiar with East and West Coast markets- but in the Midwest, in our market for example, generally, most of us are getting near the same pricing today that we got 10 years ago, and yet all of our costs have gone up. When we go out and try to adjust our pricing, or bid at a rate that would make sense, there's always a competitor.
Sometimes it's large ones, often it's the smaller ones that will come out and they will price at a point that is absolutely not going to make money, you know it's not going to make money, but for whatever reason they price that way and it forces you to either thin out your margins or walk away. Therein lies a big challenge for our industry. Until more in our industry recognize how to effectively price your business, I think we're going to continue to have pricing pressures in our industry, and that in turn then creates cash flow problems.
I spoke with someone in my market recently that is about twice the size of my business and they're struggling to get positive cash flow right now. In the market, people think they're doing well because they see them everywhere, but they're not making any money and they have negative cash flow. But you know what? If you have negative cash flow for long enough, you're not in business anymore.
Back to the comment before about the acquirers wanting to acquire the best-performing companies, the smart acquires will see somebody that's got negative cash flow and they'll say, "Well, why should I buy you for a premium now, if I just wait I can buy you for pennies on the dollar?"
[00:31:22] Liz: Right, that's so true. Bill, if you have experience in banking, you have experience in running a waste and recycling company, and now a family business. What are some of the unique opportunities and challenges in doing that?
[00:31:40] Bill: Doing that meaning the family business?
[00:31:44] Liz: Yes, excuse me, the family business.
[00:31:47] Bill: Well, I think anyone that's ever been in the family business can sit down and share lots of stories about the challenges that come along with being at a family business. There are a lot of great things about being in a family business because you're with your family a lot, and some families get along, they manage that well and there's not a lot of conflicts, others not so much.
I think some of the challenges that I see from family businesses, both as a member of one, as well as a banker to many of them, is often families have to choose between having critical conversations, and their fear of not being able to maintain peace in the family. What I mean by that is maybe there's someone in the family that works in the family business that is not capable of doing something, and nobody wants to tell them, or nobody wants to hurt their feelings, or they're afraid it will cause problems.
Or maybe there's a family member that can be a little overbearing and wants to control everything when everybody is equal partners. In family business, I find that the best family businesses have very defined roles for each member of the family, they also may have systems in place that address when and how family members can come into the business.
For example, yesterday I spoke to a client of mine at the bank, he's the second generation running a very large family business, told me that his oldest son is graduating college, starting their first job, and he believes he will eventually come and join the family business but they have a family rule that you have to work for someone else for five years before you can join the family business.
Which I think is fantastic because it teaches people that there's a world beyond working for family only, gives them a different view of the landscape and often they come back and can add real value. Whereas in a lot of family businesses, there's pressure not to go to work somewhere else but, "Hey, just work for us, why do you want to go somewhere else?"
I don't mind sharing with your listeners, when my younger son, who works for Waste Management was trying to figure out what he wanted to do, I wanted him to work for us, we as a family were more than happy to have him join us, and he said, "No, I prefer to go make my own way and then, I may or may not come back one day." As a Dad, I was proud of that on the one hand, but I was a little disappointed on the other, but do you know what?
He has done extremely well going through the management training program that they have, he's working for the biggest in their industry, went through a formal management training program, and has learned a tremendous amount working for them. I see value there, but again, not every family sees it that way, some families don't want little Johnny or little Janie to go anywhere, they want them to stay right here.
I found that those who encouraged the next generation or generations to go somewhere else, learn about business, learn what it's like to be an employee, not just the boss or the boss's kid. That tends to make you a better leader down the road. Again, I could go on about other minutia in family businesses, but most people that are in them understand what those are, it's just always a fine line managing the needs of the business versus the family dynamic, what the family may like or prefer.
As a good friend of mine who runs an extremely successful family business told me once, and this has been his experience, not mine. His experience was, "Well, you got to decide. Do you want to have peace in the family or profit in the business? You can't have both." I chuckled.
[00:35:41] Liz: Smart man. [laughs]
[00:35:41] Bill: Because his business is incredibly successful and incredibly profitable, but he did have to go through some really uncomfortable times with the family in order to do what it was going to take to get to the profit point they are today, and not everyone's willing or able to go down that path.
[00:36:02] Liz: Right. I love the rule about the five years, I think that's fantastic in any industry really. Also in leadership in general because you bring so much more to the table when you have outside experiences.
[00:36:17] Bill: Absolutely, I can't say it better.
[00:36:20] Liz: You also have some pretty cool experience with teaching and leadership development, is that something you really enjoy?
[00:36:27] Bill: I really do. Ironically, after selling our three businesses in '08 and '09, I went back to school and got a master's degree because I thought I wanted to teach at the college level. I had done some adjunct teaching, and I felt like, "Well, this is a season of life where I can give back to the communities that have been so good to me." Unfortunately for me, after getting my master's, I did get involved with a local college but they didn't want me to teach, they wanted me to be in an administrative role.
After getting the degree that would allow me to go into the classroom or teach at the Masters' level, I haven't been back at a classroom since. I haven't been back in a college classroom. I've taught at banking school for probably 20 years and continue to do that and love getting to influence the next generation of bankers as they come up and share some of my bars of life with them.
That's one of the reasons I've so enjoyed being able to present two different times at Waste Expo, which have been just a real treat for me. I was at Waste Expo in Atlanta several years ago and then I was in Las Vegas this year on a panel. I just feel like for those of us that have been blessed by our careers and our fields, whether it's waste or anything else, we should feel some obligation to give back to the career fields that have been so good to us, whether it's sharing our knowledge, or our time or something to help influence where we are, where we're going and maybe the next generation that's going to step up and take us to places we probably can't even fathom.
[00:38:12] Liz: Right. That's such a great attitude and I think so many people in this industry believe in that and they actually do that though. That's fantastic.
[00:38:20] Bill: Yes, it really is.
[00:38:21] Liz: What do you think is next in the world of waste recycling and organics?
[00:38:26] Bill: I really think that we have only begun to dip our toe in the technology pool, and I absolutely believe that technology in the next 10 years is going to have a profound effect on our industry. If you think about it, 50, 60 years ago or more our industry was doing the same thing we're doing today, we're the logistics business. We pick up waste and we move it from point A to point B and then we dispose of it some way.
Technology has come into play already in terms of the management operation of landfills and maybe some recycle facilities, things of that nature. But the basics of the business is still very much like it's always been, you need drivers and trucks and equipment, you're moving things from point A to point B, but technology hasn't seen the need yet or maybe the return possibility to justify the tech titans looking at our industry and realizing, "Wow, we can not only change their industry but we can make a lot of money doing it at the same time."
I think as that continues to evolve, I think we're going to see our industry change dramatically. I envision a day where instead of needing to hire a front-load driver, just hire someone that can work from home or maybe from a cube in my office. I think of all the young people today there are gamers, that's all they want to do sit around and do gaming virtual reality and all those things.
I envision someone like that, that we can hire that will be able to sit behind the screen and operate a Resi truck, a front-load truck or any other truck, and get it to maneuver whatever city in town they need to get it to maneuver, to go and do everything that is being done today with a lot of human input. What's going to happen then is- again it gets to that driverless truck environment. I think that's just one way that we're going to see our industry completely transformed.
I think we're already beginning to see technology affect our routing capabilities, I think there's still a lot of work to be done there. There's some companies that have made some good inroads, but it's not quite as refined as it needs to be and as all of that continues to happen, then some of the largest costs in our industry, the human cost, the fuel costs, those kinds of things, are going to diminish because we're not going to need all that, or maybe robotics will come in or again, artificial intelligence will take over and really transform our industry.
I read an article just last week and it was a terrible headline that it said- it was talking about artificial intelligence and vehicles on the road, and it said, "It's going to transform the way the world moves around, but it's going to cost a few lives in the process." And the argument the writer was making was, "Is it worth losing a few lives to improve the technology to a point that it saves millions of lives?" A deep question, not one that I'm prepared to answer or touch on. But I do think those kinds of things are going to change our industry.
I'm on the board of a company in Louisville, Kentucky, a manufacturing company that has now deployed, I think, three different robots in the last couple of years. Those robots have replaced a number of humans which saves the company a lot of time, but more importantly, the robots will work 24/7, they never call in sick, they do have some downtime. But instead of having to have- say, 10 or 15 people to do the work that these robots are doing, the robots are doing more outputs, better quality less cost than the human influence.
I'm not saying the human element needs to go away from our industry or any industry, but I think the human element and inputs it's going to change. It's going to change the way we interact with things and back to your question, "What do I see coming?" I see technology being the game-changer for our industry.
We're in the early adoption stage today, but if that accelerates those of us that are willing to embrace that technology, and implement it, are the ones that are going to go to the next level, while those who do not, one day you're going to look around and say, "What happened to my customers? What happened to my business?"
[00:42:55] Liz: Right. Yes, it's going to be interesting to watch and see that tipping point, where to your point about the drivers, the need is there and it's not going away. Will we step up and [unintelligible 00:43:08]there's a level that needs to get to in order to really improve the industry, and the robot part is interesting too. Go ahead bill.
[00:43:20] Bill: I was just going to say, Liz, on the driver issue, I'm on the economic development council in the community where I live, and one of the things I preach all the time is we spend a lot of time in our community to attract and retain some of the largest companies in the world to open in our market here.
We talk about job creation and living wage and all of that, I remind the local people, "Do you realize how much we pay our drivers? How much our drivers make?" And I said, "My drivers don't even have to have a high school diploma, they need a CDL and a clean driving record but they can make a great living. Is not require a four-year degree."
Is it different than some other work? Sure it is, but I don't know anyone, no one in my entire life, that didn't already work in the industry that raises their kids saying, "Hey Liz, Bill, when you grow up I want you to be a garbage man. I want you to be a garbage woman, I want you to be in the industry." Nobody says that. What do they tell their kids they want them to be? Doctors, lawyers, bankers. It's not the other.
I think our industry still has that stigma of, "Oh, they're just the garbage man, they're just a garbage woman" I had to explain to my kids, my niece, and nephew, "Don't ever be ashamed of what we do for a living, that's provided nice homes, nice cars. Everything in your life came because of what we do."
[00:44:48] Liz: Right. Exactly, there is pride in that and it is service. I know a lot of people in the industry want to look at it like it is a service, like firefighters and police officers. The community wouldn't be clean, it wouldn't be safe without these critical services, so I agree.
[00:45:08] Bill: Totally, yes.
[00:45:09] Liz: What keeps you busy outside of work?
[00:45:15] Bill: [laughs] I don't have a whole lot of free time. On Friday mornings, I usually start at 2:30 AM at my waste shop, meeting with drivers, front-load drivers at 2:30 and I meet with the roll-off drivers at 5:00. Then I go home, change, put on my banker clothes and I'm a banker the rest of the day. A day in my life is a lot of work, and my youngest daughter is 11 so it's working, then time with my wife, time with my daughter.
If I do get a break, I live on a nine and a half acre piece of ground, I love to go out, get on my tractor and putter around, do things outside to clear my head. That's pretty much it, I just like to tinker around on my barn or in my property, do things that are mindless, that don't require thinking about finances, loans, trucks, drivers or anything else. Unfortunately, I don't get enough of that time.
[00:46:18] Liz: Right. I love it and I hope you get more of that time because it really does feed the soul, and good luck with everything, your family business. This has been an amazing conversation, you really have the most unique perspective that I've encountered, you've really given us so much time and I appreciate your generosity today, Bill.
[00:46:44] Bill: Well, Liz, it's been a pleasure. As I told you, I love to take advantage of opportunities to share just a few of the scars of my life to maybe help others avoid them. Anything I can do to help advance the industry or share some of my knowledge or experiences, I'm always happy to do it. I just wish you well as you continue with your show, this podcast is fantastic, I love the topics, I love the guests and I'm sure it's just going to continue to do extremely well.
[00:47:17] Liz: Thank you. Hopefully, I will see you at Waste Expo in 2020.
[00:47:22] Bill: I plan to be there, and I'll make sure that I look you up when I'm in town.
[00:47:28] Liz: Okay, Bill that sounds great. Thank you so much.
[00:47:32] Bill: Thank you, Liz, it's been a pleasure.