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Trash Talk: Jim Cramer Speaks With Waste Management CEO

Automation trends are seen as key to fighting rising labor costs at the sanitation giant.

Jim Fish, president and CEO of Waste Management  (WM) - Get Free Report told Jim Cramer on a recent episode of the Mad Money TV show that labor inflation is among the company’s biggest challenges.

The company saw 9% wage inflation last quarter, on top of an even bigger number in the preceding quarter. That's why Waste Management is investing even more heavily in automation and technology to help reduce their labor dependence. 

Among other approaches, they have been replacing rear-loading trucks with automated side-loading vehicles. They've also been investing in optical sorting machines at their facilities to help sort recyclables and keep them out of the waste stream. This trend has been underway for a decade.

On Real Money, Bruce Kamich looks at some of the weakness that the charts show in company stock.

"The On-Balance-Volume (OBV) line has turned lower telling me that sellers of WM are more aggressive now," . "The Moving Average Convergence Divergence (MACD) oscillator is bearish and narrowing," he added. 

Fish emphasized Waste Management's  environmental efforts in his conversation with Cramer. Nearly 70% of the company's  vehicles now run on natural gas, Fish said. And since many of their landfills now generate usable natural gas, those trucks can refuel after they dump their loads.

Waste Management also generates a lot of free cash flow, and the company remains committed to returning that cash to shareholders with dividends and share buybacks.

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