USPS moves ahead with closings, staff reductions

Thursday - 5/17/2012, 2:11pm EDT

Ruben Gomez, reporter, Federal News Radio

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By HOPE YEN
Associated Press

WASHINGTON (AP) - The nearly bankrupt U.S. Postal Service is moving ahead with plans to close dozens of mail processing centers and cut thousands of jobs, saying on Thursday it can no longer wait as Congress remains deadlocked over how to help.

At a news briefing, Postmaster General Patrick Donahoe said the agency's mail processing network had simply become too big, given declining mail volume and its mounting debt. It will now consolidate nearly 230 plants, including 48 this summer, but will stretch out the remainder over a longer time frame in 2013 and 2014.

Earlier this month, nearly half the Senate had written letters to Donahoe asking that he hold off on closing any mail facility until Congress could pass final postal overhaul legislation. The Senate last month passed a bill that would halt many of the closings; the House remains stalled over a measure allowing for more aggressive cuts.

"To return to long-term profitability and financial stability while keeping mail affordable, we must match our network to the anticipated workload," Donahoe said. Failure to do so, he stressed, would "create a fiscal hole that the Postal Service will not be able to climb out of."

Under the modified approach, up to 140 mail processing centers will be consolidated by next February; roughly 48 in August and about 90 next January and February, with closings suspended during the Postal Service's busy election and holiday mail season. Another 89 closings would occur in 2014.

28,000 job cuts

The consolidations are initially expected to reduce postal staff by 13,000 and save the struggling mail agency roughly $1.2 billion annually. By the time the full round of cuts is implemented by late 2014, the post office will have a workforce with 28,000 fewer positions with estimated annual savings of $2.1 billion. But not all employees will lose their jobs.

"When a plant is consolidated, it does not mean that every job is lost or that every employee loses their job," USPS told Federal News Radio in a statement. "In many cases, positions will be moved to a different location. The Postal Service plans to work with affected employees and manage through the process without layoffs if possible."

The latest postal move comes after vociferous protests from communities across the U.S., particularly those in rural areas, over the mail agency's initial multibillion-dollar cost-cutting plan to close up to 3,700 post offices and 252 mail-processing centers. Last week, the Postal Service backed off the closure plans, saying it would cut costs instead by reducing operating hours in 13,000 mostly rural locations.

Thursday's announcement seeks to allay some rural concerns about immediate, broad-scale cuts to mail-processing centers that would have slowed first-class mail delivery of prescription drugs, newspapers and other services beginning this summer and would have virtually eliminated the chance for a stamped letter to arrive the next day. But it doesn't relieve concerns of some unions representing postal workers.

Union decries plan

"This is a bad plan," said Sally Davidow, spokeswoman for the American Postal Workers Union. "It's essentially the same plan the Postal Service released some months ago. And the only difference appears to be that the [implementation timeline] is a little bit more spread out."

The National Postal Mail Handlers Union is working with the Postal Service on terms of possible early-retirement incentives.

"We intend to work closely with those locals affected by the August closings and consolidations," said NPMHU president John Hegarty. "And, as always, it will be imperative that we enforce the contract to ensure that all mail-handler rights are protected."

The Postal Service has been grappling with losses as first-class mail volume declines and more people switch to the Internet to communicate and pay bills. The agency has forecast a record $14.1 billion loss by the end of this year. Without changes, it said, annual losses would exceed $21 billion by 2016.

Donahoe stressed that even with its latest moves, the agency still faces mounting losses without congressional action that would give it more leeway to eliminate Saturday mail delivery and reduce health and labor costs.

If the House fails to act soon, postal officials say they will face a cash crunch in August and September, when the agency must pay more than $11 billion to the Treasury for future retiree health benefits. Already $13 billion in debt, the health-payment obligation will force the agency to run up against its $15 billion debt ceiling, causing it to default on the payments.

(Federal News Radio reporter Ruben Gomez contributed to this report.)

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