Postmaster General Calls on Unions To Help Cut Costs

WILLIAM BURRUS: Cuts can't all fall on workers.

With mail volume expected to decline again in 2009, the U.S. Postal Service will seek to cut labor costs by temporarily lifting the requirement for Saturday deliveries, Postmaster General John Potter told a Senate Subcommittee of the Homeland Security and Governmental Affairs Committee Jan. 28.

In his written testimony, Mr. Potter said that while reducing payroll and hours of operation was vital in the face of lower mail activity as the result of the national financial crisis and competition from private carriers, union contracts made it difficult for the USPS to do so. And the financial situation for the USPS was dire, Mr. Potter said, because he expected a net loss of $6 billion for the fiscal year and the "maximum loss we can absorb while allowing us to meet all of our obligations under current law and close the year with a positive cash balance is $5 billion."

'Can't Wait 'til Contracts Expire'

"Contracts with the two unions that alone represent almost 75 percent of our 652,000 career employees—the American Postal Workers Union and the National Association of Letter Carriers—do not expire until late 2010 and late 2011," Mr. Potter said. "We cannot wait until then to address what are pressing needs today. So I am proposing to union leadership that we begin talks now to create needed levels of workforce flexibility."

In addition to moving to a five-day weekly operation schedule, Mr. Potter proposed that Congress "provide relief from the crippling cost burden imposed by the law's requirement that we pre-fund the employer premium for the health benefits of future retirees while continuing to pay health care premiums for our current retirees. This, in no way, removes our obligation to satisfy this basic benefit funding need—nor should it. What it does do, by transferring the current premium payments to the fund, is improve our financial position and cash flow significantly. This will free up a tremendous portion of operating revenue to offset our current operating expenses."

Starting in 2007, this funding timeline forced the USPS to spend $5.4 billion to $5.8 billion annually over 10 years.

'Could Have Been in Black'

"Without the payment mandated by the Act to pre-fund retiree health benefits, the Postal Service would have achieved a positive net income in 2008—rather than our actual $2.8- billion loss," he said.

APWU President William Burrus said that while he could not provide specifics, he was sure that any new work plan would involve reductions in hours and layoffs, but he warned that such cuts could disproportionately affect lower-level workers compared to supervisors and contractors.

"The very foundation of the postal complement is craft employees, with the remaining categories staffed at a ratio of responsibility for the activities of those employees," he said in a statement. "Since the number of craft employees has already been reduced by more than 100 million work hours over the last four years, there should be proportional reductions in the remaining categories. There is no justification for the retention of supervisors, managers, and contract employees at previous levels when the number of craft employees has been reduced to this extent."

Insists on Shared Sacrifice

Mr. Burrus added, "If the sacrifices are not shared, employees will reject the plan, and I will proudly lead that effort. If there are fewer craft employees, there must be fewer supervisors, fewer postmasters, and fewer contract employees."

U.S. Rep. Jose E. Serrano denounced the move to end Saturday delivery service.

"The outcry from the general public should alert the Postal Service that there is little tolerance for the idea of delivery cutbacks," the Bronx lawmaker said in a statement. "People depend on regular mail delivery and would be greatly inconvenienced by missing a day's delivery."