The United Steelworkers, which vociferously supported black liquor tax credits for U.S. pulp mills, suddenly seems to have decided that renewable-energy subsidies are not such a good idea.
In a case of One Person's (or Country's) Jobs and Energy Program Is Another's Unfair Subsidy, the union filed a complaint this week accusing China of "protectionist and predatory practices . . . to develop their green sector at the expense of production and job creation here in the U.S."
It was only last year that Canada and other countries accused the U.S. of violating free-trade rules by allowing pulp mills to hijack a renewable-energy program and get government subsidies for using black liquor, a pulp byproduct, as fuel. And it was only last year that the Steelworkers, the major union for U.S. pulp and paper industry workers, defended those black liquor tax credits for "saving thousands of Steelworker and other jobs.”
"The tax credit has turned out to be good for both jobs and for America's energy future," one Steelworkers leader said at the time.
Despite some politicians' criticism of the tax credits during the spring of 2009, Congress' failure to close the loophole enabled publicly traded pulp manufacturers to reap about $6.6 billion in federal money last year. A Steelworkers publication says privately held Georgia Pacific received an additional $5 billion in black liquor credits.
For all 40 Dead Tree Edition articles (40 to date) about the strange tale of black liquor tax credits, please click here.
Saturday, September 11, 2010
Wednesday, September 8, 2010
A Decade of Postal Mismanagement Is Costing Publishers and Catalogs
Postal officials set out recently to justify big rate increases for catalogs and publications, but all they proved was that they have been mismanaging the handling of flat mail for more than a decade.
Arguing that Periodicals (magazines and newspapers) and Standard flats (mostly catalogs) are money-losing products, the U.S. Postal Service’s exigent rate request includes above-average hikes for Standard flats and Periodicals – 9% for some magazines.
But if those products are indeed losing money, an industry coalition responded recently, it’s only because of “the extraordinary inefficiency and lack of economy of the Postal Service’s handling flat-shaped mail” and its "failure to manage its workforce effectively and reduce its size sufficiently.”
The “Users of Flat-Shaped Mail” – a coalition of major publishing, catalog, and direct-marketing organizations – also noted that “in the last several years, even the Postal Service has conceded the presence of excess labor.” It pointed out that a postal official admitted to the Postal Regulatory Commission that 30% of flat mail was “processed in a non-optimal fashion by manual sort” -- even though there was apparently more than enough equipment to handle it all in a more efficient, automated manner.
Citing the Postal Service’s own numbers, the coalition chided postal officials for allowing the reported cost of handling Periodicals to increase at more than double the rate of inflation from 1996 to 2009.
“Holding increases in flats cost to inflation should have been easy,” it wrote, because:
“In short, handling flat-shaped Periodicals and Standard Mail has become the make-work of last resort for the Postal Service’s large and growing reserve army of underused workers,” the coalition wrote.“This busywork, not the needs of flat-shaped mail, is the reason that the attributable costs of flat-shaped mail reported by the Postal Service have risen so sharply.”
If the PRC grants the Postal Service’s request, it would remove USPS' incentive to bring its flats-handling costs into line, the coalition added.
“Why cut costs when you can recover unnecessary costs through rate increases?”
Related articles:
Arguing that Periodicals (magazines and newspapers) and Standard flats (mostly catalogs) are money-losing products, the U.S. Postal Service’s exigent rate request includes above-average hikes for Standard flats and Periodicals – 9% for some magazines.
But if those products are indeed losing money, an industry coalition responded recently, it’s only because of “the extraordinary inefficiency and lack of economy of the Postal Service’s handling flat-shaped mail” and its "failure to manage its workforce effectively and reduce its size sufficiently.”
The “Users of Flat-Shaped Mail” – a coalition of major publishing, catalog, and direct-marketing organizations – also noted that “in the last several years, even the Postal Service has conceded the presence of excess labor.” It pointed out that a postal official admitted to the Postal Regulatory Commission that 30% of flat mail was “processed in a non-optimal fashion by manual sort” -- even though there was apparently more than enough equipment to handle it all in a more efficient, automated manner.
Citing the Postal Service’s own numbers, the coalition chided postal officials for allowing the reported cost of handling Periodicals to increase at more than double the rate of inflation from 1996 to 2009.
“Holding increases in flats cost to inflation should have been easy,” it wrote, because:
- During those 13 years, USPS transitioned to AFSM 100 machines, which can sort four times as many pieces per hour than the old FSM 881 machines.
- “The percentage of Periodicals pieces sorted to the Carrier Route level [the least costly for USPS to handle] increased from 44.1% percent in FY 1996 to 57.9% in FY 2009.”
- The proportion of Outside-County Periodicals that mailers dropshipped [resulting in lower transportation and handling costs for USPS] rose from 30% in 1996 to 65% in 2009.
- “The number of sacks [which are expensive to handle] used to mail Outside County Periodicals dropped by 65.9% from FY 2004 to FY 2009.”
“In short, handling flat-shaped Periodicals and Standard Mail has become the make-work of last resort for the Postal Service’s large and growing reserve army of underused workers,” the coalition wrote.“This busywork, not the needs of flat-shaped mail, is the reason that the attributable costs of flat-shaped mail reported by the Postal Service have risen so sharply.”
If the PRC grants the Postal Service’s request, it would remove USPS' incentive to bring its flats-handling costs into line, the coalition added.
“Why cut costs when you can recover unnecessary costs through rate increases?”
Related articles:
- Do Postal Execs Want To Lose Money on Periodicals? Tough Question #4 For USPS: Perhaps the Periodicals class is the Postal Service's "Washington Monument."
- Why Offer 30% Discounts on a 'Money-Losing' Product? Tough Question #3 For USPS
- The De-Automation of Periodicals Mail
- Three Goofs: How USPS Undercut Its Case for Exigent Rate Increases
Monday, September 6, 2010
Magazine Publishers: Asleep on the Job?
With all of the stumbles the U.S. magazine industry has made the past few years, it's encouraging to hear that some publishers are looking for outside help on a major strategic issue.
I'm referring, of course, to employee naps.
A recent BusinessWeek story noted that the latest trend in employee perks is napping, with Google's corporate headquarters offering "futuristic napping pods." Some firms have opted for a napping chair that "looks like PacMan with a really long tongue." (Sounds like an English bulldog to me. But where are you supposed to put the tongue? And what if it starts licking you as you doze off/)
"Other companies have outsourced their daytime sleeping solutions," the article informs us. "Yelo, a napping spa in midtown Manhattan, has provided its services to Hearst, Newsweek, and Time Warner. It offers naps in a 'cocoon-like' treatment room in which clients can adjust aromatherapy, sound, and lighting" (but, alas, not advertising CPMs or newsstand sales).
What the article doesn't tell us is the name Yelo has given to its treatment rooms: YeloCabs. Somehow when I think about what relaxes me, a Yellow Cab in Manhattan doesn't come to mind.
Nor does the article tell us whether the snoozing at Newsweek will continue under new owner Sidney Harman. You might think a 92-year-old man would understand the need for an occasional 40 winks, but clearly Harman thinks the magazine's management has been asleep at the wheel: "Newsweek managed to insulate itself from all the opportunities to expand its mark. Newsweek should be in numbers of businesses it's not in now," he recently told The Wall Street Journal.
With Newsweek reportedly losing millions -- $28.1 million last year -- methinks Harman will want the staff (or what's left of it) to do more selling and less napping.
And as for Time Warner, it seems that someone in that company's accounting department has been dozing (or maybe smoking something) as well. How else could it conclude that Time magazine, which is as advertising-anemic as its archrival Newsweek, will "earn a profit of more than $50 million this year"?
I'm referring, of course, to employee naps.
A recent BusinessWeek story noted that the latest trend in employee perks is napping, with Google's corporate headquarters offering "futuristic napping pods." Some firms have opted for a napping chair that "looks like PacMan with a really long tongue." (Sounds like an English bulldog to me. But where are you supposed to put the tongue? And what if it starts licking you as you doze off/)
"Other companies have outsourced their daytime sleeping solutions," the article informs us. "Yelo, a napping spa in midtown Manhattan, has provided its services to Hearst, Newsweek, and Time Warner. It offers naps in a 'cocoon-like' treatment room in which clients can adjust aromatherapy, sound, and lighting" (but, alas, not advertising CPMs or newsstand sales).
What the article doesn't tell us is the name Yelo has given to its treatment rooms: YeloCabs. Somehow when I think about what relaxes me, a Yellow Cab in Manhattan doesn't come to mind.
Nor does the article tell us whether the snoozing at Newsweek will continue under new owner Sidney Harman. You might think a 92-year-old man would understand the need for an occasional 40 winks, but clearly Harman thinks the magazine's management has been asleep at the wheel: "Newsweek managed to insulate itself from all the opportunities to expand its mark. Newsweek should be in numbers of businesses it's not in now," he recently told The Wall Street Journal.
With Newsweek reportedly losing millions -- $28.1 million last year -- methinks Harman will want the staff (or what's left of it) to do more selling and less napping.
And as for Time Warner, it seems that someone in that company's accounting department has been dozing (or maybe smoking something) as well. How else could it conclude that Time magazine, which is as advertising-anemic as its archrival Newsweek, will "earn a profit of more than $50 million this year"?
Friday, September 3, 2010
Three Goofs: How USPS Undercut Its Case for Exigent Rate Increases
Thanks to its own witnesses, the Postal Service has blown its chances for getting exigent rate increases approved, a postal expert wrote this week.
“Lack of supporting information from the USPS” will make it difficult for the Postal Regulatory Commission to approve the Postal Service’s request for emergency rate hikes, Joe Schick, Quad/Graphics’ director of postal affairs, wrote in his blog this week. “Regardless of the PRC’s position, the Postal Service will not be able to use a bad economy as a reason for exigency any time in the future," wrote Schick, whose company is a major printer and mailer of catalogs and magazines.
Participants in the case filed multiple pages of comments this week pointing out where Postal Service witnesses didn’t know what they were talking about, contradicted the official USPS positions, or contradicted themselves. (Time Warner, for example, refers to "USPS’s operations and pricing witnesses' evident incomprehension of the major issues concerning Periodicals operations and pricing.”)
Schick’s article succinctly summarizes how USPS witnesses inadvertently refuted three claims that are crucial to the Postal Service’s case:
Claim #1: “Without this increase there would not be enough cash to get them through Fiscal Year 2011.” Reality: “Under questioning we found out that they did have enough cash to get through at least the next fiscal year.”
Claim #2: “The internet made them do it” – that is, the Postal Service lost business to electronic distribution. Reality: “Statements in speeches and annual reports from USPS executives confirm that they have been making that claim for the last decade or more. [This is] not a new phenomenon and should have been part of their long-term strategic planning.”
Claim #3: “They claimed this exigent case was needed to get them through the current financial crisis.” Reality: “Under questioning [Postal Service witnesses] admitted that it was part of their long term strategy and that without other drastic changes this year, they could end up right back at the PRC for another exigent filing next year.”
The PRC is supposed to decide on the case by Oct. 4.
“Lack of supporting information from the USPS” will make it difficult for the Postal Regulatory Commission to approve the Postal Service’s request for emergency rate hikes, Joe Schick, Quad/Graphics’ director of postal affairs, wrote in his blog this week. “Regardless of the PRC’s position, the Postal Service will not be able to use a bad economy as a reason for exigency any time in the future," wrote Schick, whose company is a major printer and mailer of catalogs and magazines.
Participants in the case filed multiple pages of comments this week pointing out where Postal Service witnesses didn’t know what they were talking about, contradicted the official USPS positions, or contradicted themselves. (Time Warner, for example, refers to "USPS’s operations and pricing witnesses' evident incomprehension of the major issues concerning Periodicals operations and pricing.”)
Schick’s article succinctly summarizes how USPS witnesses inadvertently refuted three claims that are crucial to the Postal Service’s case:
Claim #1: “Without this increase there would not be enough cash to get them through Fiscal Year 2011.” Reality: “Under questioning we found out that they did have enough cash to get through at least the next fiscal year.”
Claim #2: “The internet made them do it” – that is, the Postal Service lost business to electronic distribution. Reality: “Statements in speeches and annual reports from USPS executives confirm that they have been making that claim for the last decade or more. [This is] not a new phenomenon and should have been part of their long-term strategic planning.”
Claim #3: “They claimed this exigent case was needed to get them through the current financial crisis.” Reality: “Under questioning [Postal Service witnesses] admitted that it was part of their long term strategy and that without other drastic changes this year, they could end up right back at the PRC for another exigent filing next year.”
The PRC is supposed to decide on the case by Oct. 4.
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