Tuesday, February 21, 2012

Greece Is the Word for USPS, Donahoe Says

The U.S. Postal Service’s financial situation is starting to “look like Greece,” the Postmaster General told mailers last week, because of resistance to changing the agency's obviously unsustainable cost structure.

If Congress doesn’t allow USPS to change, Postmaster General Pat Donahoe told the Mailers Technical Advisory Committee (MTAC), by 2016 it will have $60 billion in annual revenue but $90 billion worth of debt.

Donahoe was updating the mailers on his plan to reduce the agency’s cost structure through such measures as eliminating Saturday delivery, closing many post offices and distribution centers, slower deliveries, and ending the accounting games surrounding retiree health benefits and pensions.

“We have to act on this now. Putting a couple of pieces together and holding your breath is not the solution. We will be in an untenable position in 5 to 6 years,” one account of the meeting quoted Donahoe as saying.

“It is hard to get the message across. Everyone can’t have their cake and eat it too. When you look at our outlook and do nothing, we look like Greece,” he said, referring to the country that faces default on its debt and massive upheaval after years of obviously unsustainable budget deficits.

Postal executives told the mailers group that their long-term plan for turning USPS’s finances around has not changed significantly in the past two years, except that mail volume has dropped faster than they expected.

They said they are not seeking “exigent” (greater than inflation rate) price increases but cannot rule them out if some of their proposed cost-saving measures are blocked because otherwise USPS could run out of cash in a matter of months. An especially attractive method of raising an additional $1 billion in annual revenue would be increasing the price of a Forever Stamp from 45 cents to 50 cents, an official said, because price increases have usually had little impact on the demand for such stamps.

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20 comments:

Anonymous said...

No one with half a Brain is going to listen this guy. I remind he supported vehemently along with his predecessor Potter, the 2006 Postal Enhancement and Accountability Act and the provisions in that Act that has brought the Postal Service to the brink. So go ahead drink the kool-aid I dare you. But those of you have drank the kool-aid before must like it...

Anonymous said...

...so, let's do what the Greeks did in November --they dumped their prime minister, let's get rid of this fool

Anonymous said...

The P.M. is in denial.The big problem that he hardly mentions is that there are still far too many in management with far too much dowwntime.For many years there were suspect jobs given to "friends" and when the current problems hit,the house of cards fell and the chickens came come to roost.The workers are then made the scapegoats and their benefits and retirement pension is now jeopardy.

Anonymous said...

Donahoe is trying to destroy the USPS, almost makes you think he's in with Issa on the privatization deal. I would never believe numbers put out by the USPS, I've worked for them for 34 years.

Anonymous said...

Its hard for the post office to get ahead when they have 37 vice presidents! (That is a fact!) I say, start the cuts at the top, skim the fat off the top and see where we stand then. Instead of cutting service to the public and cutting employees that actually handle the mail every day, get rid of half the management and I would venture to bet the USPS would be better off immediately.

Anonymous said...

How about start cutting all the top heavy jobs that are not needed to move the mail? Then, abolish PAEA which will solve everything. It's also worth noting that PAEA provided additional salary increases at the top. Imagine that?

Anonymous said...

donahoe must be fired immediately. look at his decisions and track record and you will also be convinced that he needs to be fired. he is a bad decision maker whose service slashing policies have cost the postal service billions upon billions of dollars in lost revenue and his failed "leadership" has failed to
recoup billions more by reducing/controlling postal fraud, waste, and other abuses. donahoe is a proven bureaucratic knucklehead/incompetent that needs to be fired yesterday!!!

Anonymous said...

Why is that staff jobs have increased and craft jobs have been decreased? All management needs Togo and replaced with qualified people with business sense and education. Just because someone works their way up the ladder does not make them qualified. Donohue and cronies need to be put in jail for what they have done to us.

Anonymous said...

He likes to keep throwing these big number around trying to scare the hell out of everyone. Why doesn't he just go ahead and say that if nothing changes, in 300 years the Postal Service will be in debt $900 Megazillion dollars.............

Anonymous said...

Almost everyone misses the real problem. Management is a problem, lack of leadership, ethics and brains is primarily the problem w/management However the real problem, the real criminals in all of this is the US Senate and the US House of Representatives. They are stealing us blind and have been for years. The 2006 PAEA is just the whipping topping on the cake, the straw breaking the camel's back, which if you remember was supported wholeheartedly by the APWU, the NALC, management and most likely the Mailhandlers union and the NARLC. So in all honestly management and the unions share in having passed that straw to congress to lay on our back. So if anyone truly wants to fix this problem, then it comes down to fixing congress. And don't forget, for 2 years the White House, House and Senate were all under democrat control, so this is not just a republican/democrat issue, it's an issue of elected criminals looting, extorting and stealing from us and our customers.

RichMan said...

In 2005, the Postal Service did not even have to use its borrowing authority. It had NO outstanding debt; today it has $12.9 billion in debt. Virtually all this debt has been used to finance the pre‐funding of retiree health benefits ‐‐ not to restructure the Postal Service’s network of facilities, or to replace its old vehicle
fleet, or to invest in new products and services to meet the emerging needs of the nation’s economy.

Anonymous said...

Well said Richman. UPS and FedEx both posted record esrnings last year because they constantly check the structure of how they are doing business and revamp as changes become necwaary.

Our office building doesn't even have a drop box for USPS becasue the township postal services refuses to pick it up. Way to do business and force people to use other measures!

Anonymous said...

Over generous guaranteed pensions on the backs of taxpayers is a crime. Enough already. Convert everything to a 401K. Let it sink or float like my pension and the rest of the world.

Anonymous said...

Cut EAS. Cut PCES.
When you are done?
Chump Change.

Anonymous said...

Well we just got our notice they want to close our facility. Ok great I am so done once and for all. This bull has got to go. Give me my dam pick slip and let me collect my benifits for what 99 weeks and then off to SS office. I can handle the stress of all this bull, and I want my disabilaty. What frickin jobs are around. What 8.oo maybe 10.00 an hour job. That wont even by the toilet paper needed to wipe my butt. This country is going to hell. Dont believe me look at Congress every day and what they fight for. Wow it was nice knowing all of you. Out

Anonymous said...

The PMG states if nothing changes the PO will be unable to make payroll by the end of FY 2012 and they have reached their borrowing limit. So how would the PO still be functioning in 2016 in order to have $60 billion in annual revenue or $90 billion in debt? An all volunteer workforce?

PPPsGrammy said...

I've said it before many times and I'll say it again here. Are there regulations against the Postal Service getting into the internet business such as bill payments? I have no expertise but it seems like a cost effective way to generate revenue.

Anonymous said...

How are our pensions on the backs of the taxpayers?

Anonymous said...

Follow the money. Ending rural free delivery isn't even on the table. It's a govt. mandate that runs up the USPS labor costs more than all the ideas commenters have listed combined. Rural post offices are only 1% of the USPS budget. Rural DELIVERY labor is a huge chunk of the budget. Look who dominates rural areas in Congress and explain to me why this is off the table? Not to mention all the money subsidizing all those rural roads and bridges to get the mail there. There is a lot of government waste right there. We can easily feed all the people in our cities with about half the rural roads we have now. The rest are just handouts to the people--largely those who complain about the govt.

Anonymous said...

Everyone of you trying to lay the issues on the USPS are fooling no one but yourself. The problem is the PRE FUNDING of retirement that NO ONE else is forced to do and that is being used as a sludge fund for the Government. The USPS was finally staying profitable and that is not the fault of management it changed and reversed.

Stop spouting off with your useless agendas and personal opinions and stick to the facts, but then again you never let the facts get in the way of a great story do you?