Bloomberg News

U.S. Postal Service Hires Evercore for Restructuring Advice

December 06, 2011

(Adds analyst comment in fourth paragraph.)

Nov. 22 (Bloomberg) -- The U.S. Postal Service, which forecasts a record $14.1 billion loss for the 2012 fiscal year, said it hired Evercore Partners Inc. to “review and advise” the agency on restructuring.

“The U.S. Postal Service must make fundamental changes to its business model to return to profitability and continue its mission of providing quality service to every address in the nation,” the agency said today in an e-mailed statement.

The Postal Service, based in Washington, has said it may run out of money to operate next year. The agency, which is closing post offices and wants to cut 220,000 jobs by 2015 seeks to end Saturday mail delivery and persuade Congress to let it delay payments for health benefits of future retirees. The bills Congress is considering don’t go far enough, Postmaster General Patrick Donahoe said yesterday.

“Hiring a top restructuring firm like Evercore is an important first step in the right direction,” Harry Wilson, the founder of MAEVA Advisors LLC who previously worked on a taskforce that restructured General Motors Corp. and Chrysler LLC, said in a telephone interview. “Now they clearly need to develop a business plan that allows the Postal Service to succeed and will be politically acceptable.”

The Postal Service, which is overseen by Congress and the Postal Regulatory Commission, needs approval from one or both to make changes such as cutting a day of mail delivery, raising rates or firing employees.

Deputy Treasury Secretary

Evercore, founded by former U.S. Deputy Treasury Secretary Roger Altman, is also advising Ally Financial Inc., the lender that is 74 percent owned by the Treasury Department, people who declined to be identified because the discussions are private said earlier this month.

Evercore, a New York-based investment-banking firm, has advised PMI Group Inc., the mortgage insurer whose main unit was seized by Arizona regulators last month, and Kinder Morgan Inc., a natural-gas pipeline company.

Carina Davidson, a spokeswoman for Evercore, declined to comment.

The National Association of Letter Carriers, the second- largest postal-workers union based on the number of current employees, last month said it had hired Lazard Ltd. and former White House auto adviser Ron Bloom to come up with ideas to restructure the Postal Service. Bloom yesterday declined to comment on his work. The American Postal Workers Union is the largest postal union.

--Editors: Andrea Snyder, Jodi Schneider

To contact the reporters on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net; Jonathan Keehner in New York at jkeehner@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net


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