Sunday, May 8, 2011

A New Slogan for the Postal Service: "Just Say No"

The Postmaster General didn’t just tell major customers this week that the U.S. Postal Service is a business and not a government agency. He followed up with a move right out of the corporate playbook – announcing plans to stiff a major creditor.

Pat Donahoe’s revelations at the National Postal Forum about what the Postal Service planned to do, such as simplified rules and a new ad campaign -- got most of the media attention. But at least as significant was what he said about what the Postal Service will not do.

It will no longer see itself as “the face of the federal government in every community.” It won’t offer banking services. It won’t sell cell phones. And it might not make a controversial payment to the federal government that is due Sept. 30.

“We are evolving as an organization from one that is mostly oriented toward public service, to one that is mostly oriented toward competing for customers,” Donahoe said in a speech at the postal forum. “The heart of what we do, ultimately, is delivering. This concept – that the core function of the Postal Service is delivering – is powerful.”

A cynic’s translation: “If you want us to keep an unprofitable post office from closing just because it’s the only gathering spot in the community, try getting FedEx to open a facility in that town. If you’re concerned about the jobs an area will lose as we make efficiency moves, ask UPS to hire some extra employees in that region.”

“In the past couple of years, there have been calls for the Postal Service to get into banking or selling cellular phones as a way of raising revenue,” Donahoe said, without mentioning the USPS Office of Inspector General. “To be honest, those ideas never made any sense to me. Our focus has to be on perfecting our core function of delivering. This notion will guide us as a business. It will be a filter for the way we approach the marketplace and the way we support the industry.”

That may indicate Donahoe takes a dim view of some other non-distribution revenue ideas that have surfaced in recent years – such as providing electronic mailboxes, acting as a go-between for online payments, and mounting mobile sensors on delivery trucks.

Acting like a private company only goes so far. The Postal Service is on track to be insolvent on Sept. 30, when by law it must give the federal government about $5.5 billion for what is euphemistically referred to as a prepayment of retiree health benefits. Unlike a private company facing similar circumstances, it can’t file for Chapter 11 bankruptcy protection.

Then again, if it were a real business, USPS wouldn’t have to fork over the money. Its retiree health fund is already quite healthy; the payment is merely an accounting gimmick that Congress uses to make the federal deficit look smaller. (See Congress Hears the Truth About Postal Service Finances for more information.) Using common business rules for accounting, the "prepayment" (actually, it's an overpayment) would probably be considered an asset rather than an expense.

Also unlike a private business, the Postal Service doesn’t have to worry about its creditors forcing it into bankruptcy or foreclosing on its properties. That leaves it with another option at the end of the fiscal year when the feds come asking for money the Postal Service doesn’t have and can’t borrow. Call it the Nancy Reagan Plan: “Just say no.”

Though it has a few months to decide on that course of action, Donahoe sounded like a man who had already made up his mind when he appeared at a postal forum news conference, wrote Larry Riggs of Multichannel Merchant.

“We’ll pay our employees, we’ll pay our suppliers, and we won’t pay the government. We have contention as far as owing that," Riggs quoted Donahoe as saying.


Gettin' Snowed? said...

This "We won't get into that" sales venture posture by Donahoe is much different than the message he conveyed to Cliff Guffey during APWU negotiations.

At that time, Donahoe was in favor of increasing customer traffic into post offices by offering services on behalf of other government agencies. USPS already does passports, why not hand out / collect forms for the IRS, DOL, and Veterans Admin. was the pledge.

Looks like Donahoe is blowing smoke up somebody's behind.

Or perhaps, this is the same type of technique used by many campaiging politicians. Tailor your words to the audience. If you're speaking to the APWU tell them APWU jobs are the future of the USPS and promise to work together to achieve that end. If you are in front of business customers, tell them that customer service is #1 and we must focus all of our efforts on serving the businesses through delivery.

I'm sure when the Mailhandlers and Carriers enter negotiations they will each be told that they are the future of the USPS.

Anonymous said...

Why is it still called the Postal SERVICE?? Either it is a service, and should be completely paid for by the US Government, like FEMA, or the Coast Guard, or the FBI, and all the little Post Offices could remain open, or it is a private industry, in which case it should be allowed to close any office it wants, or not deliver on Saturday, or raise rates as it sees fit. Trying to fund it like a business, and operate it like a Government Service is just a recipe for disaster...........and just idiotic in general.

Anonymous said...

Both previous posters are spot on in their assessment of PMG Donahoe and the USPS in general. As a letter carrier, I'm looking forward to the NALC contract negotiations coming up later this year to see how similar or different it is from what the Postal Service agreed to with the clerks' union, which will be after the payment due date for the prefunding payment. It will be an interesting fall/winter in the Postal Service...

Anonymous said...

congress is RESPONSIBLE for the postal service mess, but not for the reason many of you think. congress is the only people who can look into postal fraud, corruption, waste, incompetence,
etc. and DO SOMETHING ABOUT IT! the truth is postal management is run by many people who couldn't successfully operate a lemonade stand. there is fraud, waste, corruption all over the place but no postal managers are held accountable! congress is the only one who can do that and they have been alseep at the wheel for way too long. until the elected mermbers of congress get off their lazy asses and investigate the postal management problems the future will be a steady decline of the USPS.

Anonymous said...

D0nahoe, was and will always be an a-hole that knows little about what really goes on in the PO.

Anonymous said...

You pegged Dona-A-Ho!! He's just another clueless, self-important bureaucrat! Did he have his nose up his butt posse following him around the postal forum last week?