Monday, April 12, 2010

GAO Suggests Plant Closings, Two-Tiered Wage Structure for USPS

The U.S. Postal Service should look into closing more than half of its mail-processing facilities, be wary of "exigent" rate increases, and consider getting postal unions to "eat their young," the Government Accountability Office recommended today.

The news media are focusing on other aspects of the GAO's report, such as its support for giving the USPS the power to eliminate Saturday delivery, close post offices, and reduce its workforce. But three other significant recommendations in the report are escaping the headlines:

Two-tiered pay system
To rein in wages and benefits, which make up about 80% of its costs, the Postal Service should consider "a two-tier pay system that would pay new hires lower wages, while 'grandfathering' current employees under the current pay structure," the report says. In the labor movement, that is often called "eating your young" -- trading away future employees' pay in return for protecting the compensation and job security of current union members.

Close mail-processing facilities
The GAO urges the Postal Service to move faster in the closing of its 270 processing and distribution centers, stating that only two have been closed since 2005. (It apparently overlooked some recent closures and others that have been approved but not yet implemented).
    "Some stakeholders have estimated that roughly over one-half of these facilities are not needed," the report says. "One senior USPS official estimated that about 70 processing facilities could be eliminated if local First Class mail were to be delivered in two days instead of overnight."

    Postal officials acknowledge they have excess capacity in the mail-processing network, according to the GAO. Mailers complain that having too many P&DCs is a lose-lose proposition -- wasting the Postal Service's money while also making it harder for customers to get dropship discounts.

    A caution on exigent rate increases
    The report questions whether the Postal Service can implement exigent (higher than inflation) rate increases, as it plans to do early next year, because such rate hikes are "limited by law to extraordinary or exceptional circumstances." Some have questioned whether a financial crisis is the sort of circumstance Congress had in mind when allowing for exceptions to the inflation-based price cap.

    "An exigent rate increase over the price cap may produce a large short-term revenue boost. However, a very large rate increase could be self-defeating by increasing incentives for mailers to accelerate diversion to electronic alternatives, thereby lowering revenues in the long run and adding to USPS excess capacity," the report says.

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    23 comments:

    Anonymous said...

    Does the report mention "excess capacity" of management positions?

    Anonymous said...

    FIVE DAY DELIVERY WILL PUSH BIG MAILERS TO OTHER SERVICES AND IT WILL KILL THE POSTAL SERVICE.THIS IS THE LAST THING THAT EVER NEEDS TO BE CUT NOT THE VERY FIRST , COME ON PEOPLE WAKE UP! PRC PUT A STOP TO THIS!!

    Anonymous said...

    I can't believe I keep reading the same garbage reports, where is the mention and plan to rid the Postal Service of thousands of supervisors and above that never touch the mail. They make teams to watch teams. Unreal. The NALC better show some backbone soon.

    Anonymous said...

    I agree with one other here, doing away with Saturday is a huge mistake, & they will see it a year or two from now. Also "POOMS" & other management should have salaries/hours cut and/or eliminate the excess management positions. Make the POOMS & PM's ptf's they don't 40 hours per week.

    Anonymous said...

    Another round of Voluntary Retirement then should still be the "NEXT" step. If salary makes up 80% like the article mentions, then this is a no brainer!

    Anonymous said...

    Arbitrators are biased towards the USPS management anyhow...they certainly don't take MY financial position into account when ruling against craft. Those of us who have carried the dense weight of inept and stupidly cruel managers and supervisors haven't had a decent raise in many years from contracts settled by arbitrators.

    Anonymous said...

    If only postal management worked this hard to create new revenue streams, bring in new customers, retaining its most loyal ones, and show how the USPS is a far better value than UPS, FedEx or any other competitor? It's almost as if postal management wants the USPS to fail and will put every fiber of their beings into it.

    Anonymous said...

    There is ONE BOSS for every EIGHT other workers in the USPS. Get rid of 60-80 % of the bosses, and you'd have loads of cash. Just today I was told by a Postmaster equivalent that ONE POOM (Postmasters Boss) has been replaced, at his retirement, by NINE, count them NINE NEW POOMS. Postmasters make an average of 100 grand. I think POOMs make an average of 140 grand. What are they thinking? Blame it all on the clerks and letter carriers slaving to try and keep up with all the cuts these bosses keep making...and, HELLO, it's not working!!!!

    Anonymous said...

    ...no mention of "bloated management"
    incredible - bedfellows indeed!

    Arthur said...

    My god when are they going to do something about the number of supervisors and managers running around? We have lost many workers over the last few years, but the number of supervisors has INCREASED, at least in my plant. We just got 2 more! Every night we have like 8 supervisors hanging out in front of twelve machines. Later, when they get weary from all of their exertions, you find them sleeping or looking at lingerie models online. The ridiculous supervisor to worker ratio is getting even worse. Until they "rightsize" management, craft workers should voice their opinions against every move management makes and not make any extra effort. I am sorry but I cannot believe that we are in such a crisis, nor will I make ANY extra effort, until our bloated management is reduced. All of the pain and sacrifice cannot just come from the crafts.

    joe said...

    56% is for labor..24% is management.nothing in the report about cutting management bonus money,cutting management period or a 2 tier pay scale for them..go after the real waste of money

    Anonymous said...

    We can take a pay cut of 10% & keep our positions, no layoffs, USPS will save almost 2.5 billion a year, let,s go for it family.

    Anonymous said...

    Who gives a rats behind what the Dead Tree Edition thinks? What is your interest in this?

    Anonymous said...

    what about fed- ex and every other contracted person (THS)that SORTS and DELIVERS our mail. Its funny every article reads that we have to many full time career employees and yet they outsource so much of our sorting work. How does paying seperate companies and us for the same work save money? Instead they close facilities and plants then move people to other "overcrowded" plants and complain we have to many workers and not enough mail. we should take back all our jobs!!

    Anonymous said...

    Dear Dead Tree, Have you no "contacts" in The Distric of Columbia? Would it hurt you to show these comments to some of our elected representatives? Please quit telling us what we already know. Show to those inside of the beltway, what we, the old ones have said. They will listen to you. Three hundred thousand workers thank you in advance.

    Anonymous said...

    I think the post office wouldn't mind killing itself off and eliminating themselves, pretty much putting themselves out of their own money especially since USPS is like the sinking titantic that cannot get itself back upl

    Anonymous said...

    the public needs to be told the amount of $$'s postal management has paid out to managers via the pay-for-performance bonus system. while the top postal brass is going before congress whining for a handout or five-day delivery the
    bonus money has continued to flow out via this bonus program. how can postal management claim we are on the brink of insolvency and then pay out bonus money? and you thought the "crooks" were only on wallstreet.

    stephen said...

    me and my fellow co-workers need to be off on saturdays so we can get drunk while watching baseball and football games. that is the American way. and our way will be done

    Anonymous said...

    You can get and pay your bills on line for free.
    This place is going down faster than anyone
    can imagine.I think by the time anything
    meaningful is done it will be to late.

    Anonymous said...

    When all the workers are either eliminated or retired, who and the heck are all these managers going to Manage?
    Do you hear of any upper management in Washington D.C. being eliminated, or a reduction in salary--Heck No!
    These action proposed will eliminate the finest communication system in the world.
    Then you can watch your Cost go Up, up and away!
    Hey if there's no last leg for UPS and or FedEx to dump off there non-profitable delivery items too, what are you willing to pay????
    The third link (USPS) keeps the other two honest as far as what's they can charge the consumer.

    Anonymous said...

    Our District just promoted 15 new Supervisors.

    Anonymous said...

    PLEASE GET IT PUBLIC - POSTAL MANAGEMENT IS OUT OF CONTROL AND THEY NEED THE AX FIRST!!! THEY MAKE THE MOST MONEY, CONTINUE TO RECEIVE EXCESSIVE BONUSES DESPITE TOUGH ECONOMIC TIMES FOR THE REST OF US, AND DON'T EVEN TOUCH THE MAIL!!! WAKE UP!! LOOK AT THE MAJORITY OF COMMENTS ON THIS SUBJECT!!! THE SUPERVISOR TO WORKER RATIO IS WORSE THAN EVER! COME ON PEOPLE TRIM THE FAT - GET RID OF THE CROOKS, THE EXCESSIVE SUPERVISORS/204BS/MANAGERS/POOMS!!!!!!!ONE BOSS FOR EVERY 8 WORKERS IN USPS - OH PLEASE!!! LET'S GET THEM OUT JUST LIKE EGYPT'S FORMER PRESIDENT!!!!

    Anonymous said...

    get rid of excessive postal management now before it's too late for usps!