Wheelabrator-American Foundry Equipment

The first successful airless blast cleaning method, called the “Wheelabrator,” was developed during the Depression in Mishawaka, Indiana. The American Foundry Equipment Company changed its name to American Wheelabrator and Equipment Corporation in 1946 because of its diversification of products; and in 1955 it became the Wheelabrator Corporation. A merger of four companies occurred in 1971, creating Wheelabrator-Frye.

Wheelabrator remained a small manufacturer of these and other devices well into the 1960s. In anticipation of the United States 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 Equity Corporation paired Wheelabrator with another subsidiary, Frye Copy Systems, which manufactured printing inks and carbon paper. Equity encountered severe financial problems in the mid-1960s. A New York investor group led by Michael Dingman of the Burnham Securities firm took over and reorganized the company. Dingman eliminated the Equity company and merged the Wheelabrator and Frye units.

In 1968, the company, now called Wheelabrator Frye, bought 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 industrial 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 online in 1972, at the height of the first environmental movement in the United States. The company waited until 1983 to build a second plant, when more efficient plant designs made incineration cheaper.

Wheelabrator Frye was acquired by The Signal Companies Inc. in 1983 for $1.5 billion. Subsequently, Michael Dingman, chairman of Wheelabrator Frye, became 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. Because of the Signal merger, the unit took on many 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 over 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.

Henley operated more as an investment company than as 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 share directly in 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 granted Wheelabrator exclusive rights to dispose of incinerator fly ash at Waste Management facilities and other transferred properties, which was essential for Wheelabrator’s growth because new incineration plants could not be built without guaranteed ash disposal resources.

Meanwhile, licensing for disposal sites had become nearly impossible to gain because of 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 a series of public hearings, offering to answer questions, and taking every opportunity to show 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 show growing economic advantages to its methods of disposal. When Wheelabrator gained public approval for constructing an incinerator, they would conduct regular tours, allowing the public to inspect the operation and ask questions. By maintaining an honest and open relationship with the public, Wheelabrator neutralized the NIMBY, or “not-in-my-backyard” syndrome.

They strategically placed Wheelabrator plants near landfills that were nearing capacity and where power co-generation would yield profitable electricity sales. The plants in the north supplied electricity in the summer and industrial heating steam in the winter. Officials built plants 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. Furnaces often received highly toxic materials, such as car batteries. 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.

Wheelabrator once shared offices with the Henley Group in Hampton, New Hampshire, but moved 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 this merger, Waste Management secured control of 55 percent of Wheelabrator’s common stock.

Wheelabrator became a leader in building water and air purification systems by the early 1990s because of its experience in operating 14 incinerators and designing pollution control systems. The company’s Rust International subsidiary was the sixth-largest engineering and construction contractor in the United States in 1992. Besides engineering strengths, Wheelabrator differed from its chief competitor, Ogden, in its offering of fully integrated plants based on exclusively licensed technologies built by Rust International.

For more information about historical Mishawaka, visit: Mishawaka Museum | The Princess City