Monday, November 23, 2015

Few Postal Jobs Will Be Cut in 2016

Don't look for any major downsizing from the U.S. Postal Service during the coming year: A new report indicates the postal workforce will remain stable through late 2016.

The agency is projecting a 0.6% decrease in work hours during Fiscal Year 2016, according to an annual financial plan it released Friday. That suggests this will be the third consecutive year of virtually no change in the size of the workforce, after a three-year period (2010-2013) in which the service shed one-sixth of its career employees. Work hours and the number of employees actually inched up during FY2015.

The financial report says that Phase II of Network Rationalization (the politically sensitive closing of mail-processing centers) and a 2.1% decrease in mail volume will make the slight cuts in workhours possible.

“These savings are forecasted to be partially offset by increases in training hours, growth initiatives and the impact of an additional delivery day for Leap Year,” the report says.

A change of plans
The Postal Service released a five-year plan in April 2013 that called for cutting 92,000 career employees by September 2017, then almost immediately put the brakes on more than a decade of downsizing: Since that report was released, the career workforce has hardly budged, ending FY 2015 at 492,000.

That 2013 plan projected many of the cuts would come from curtailing Saturday deliveries, but that proposal has apparently been abandoned. Five-day delivery isn’t even mentioned in the FY2016 financial plan.

“The continued growth in the number of packages -- which are much more labor-intensive than letters – and the ever-growing number of delivery points, make it increasingly difficult to capture work hour savings,” says the FY2016 plan. “We will continue to innovate to drive efficiency.”

Assuming that the 4.3% exigent surcharge on most postal rates will be eliminated early next year, the plan projects a revenue increase of only $400 million, to $69.3 billion. With an estimated $1.5 billion in additional expenses, that would mean an operating loss of $100 million. (Politicians and the news media will call it a $5.9 billion loss because they will include the supposed prepayment of retiree health benefits that postal officials wisely refuse to pay).

Other articles on the Postal Service workforce include:

Monday, November 16, 2015

Verso Warns of Restructuring, Asset Sell-Offs

Verso Corporation, the largest U.S.-based maker of magazine-quality paper, told customers this morning that "cash flow and liquidity concerns" might force it to restructure or to sell some mills.

The announcement is no surprise to Wall Street, where Verso's bonds have been trading at pennies on the dollar in anticipation of a Chapter 11 bankruptcy reorganization or other drastic measures.

Here's the text of the message emailed to Verso customers this morning by Michael A. Weinhold, Verso's Senior Vice President of Sales, Marketing & Product Development:

Dear Valued Customer, 

Verso is currently facing a confluence of external factors that negatively affect our liquidity and cash flows, including impending financial obligations, an accelerated and unprecedented decline in demand for our coated paper products, and a significant increase in foreign imports resulting from a strong U.S. dollar relative to foreign currencies.

As a result of our cash flow and liquidity concerns, we have begun evaluating potential restructuring alternatives. Verso has engaged PJT Partners L.P. to provide us with restructuring and transactional services, and O'Melveny & Myers LLP to provide us with restructuring legal advice and assistance. We have also begun discussions with certain of our creditors to explore potential restructuring alternatives.

We also are exploring opportunities to raise funds through potential sales of some of our mills and related facilities, which may include our Stevens Point, Androscoggin and Duluth mills, our recently idled Wickliffe Mill, and the hydroelectric generation facilities associated with our Androscoggin Mill.

During this evaluation process, customers can expect to receive the same high-quality products and services that originally led them to select Verso as a supplier. There should be no changes or delays in the ordering process or deliveries, and customers should continue to work with their current sales representatives. We remain steadfastly committed to running our mills safely and efficiently, reducing costs and delivering the exceptional customer experience that Verso is known for.

As always, our aim is to ensure that all customer needs are seamlessly met. Please do not hesitate to call me if you have questions or concerns.

Thank you for your continued support of Verso. 

Related articles: