Bloomberg News

USPS to ‘Look Like Greece’ Without Aid: Donahoe

June 12, 2012

Postmaster General Patrick Donahoe

Patrick Donahoe, U.S. postmaster general and chief executive officer of the United States Postal Service. Photographer: Andrew Harrer/Bloomberg

The U.S. Postal Service “will look like Greece” if Congress fails to help it cut costs, U.S. Postmaster General Patrick Donahoe said.

Donahoe, speaking today at the PostalVision 2020 conference in Washington, said the service’s annual expenses will rise to $81 billion by 2016 without congressional action to allow cuts, including reducing a requirement to pay in advance for health benefits for future retirees.

“If we don’t do something about the costs of this organization, we will look like Greece,” he said.

The Postal Service, which lost $3.2 billion in the quarter ended March 31, is seeking congressional permission to run its own health benefits plans and labor agreements to relax work rules and use more part-time employees.

About 78 percent of the service’s expenses are labor costs, including the 20 percent of the total that pays for future retiree health-care expenses and other health-care benefits, Donahoe said.

The service wants the House of Representatives to consider a postal overhaul measure that Majority Leader Eric Cantor, a Virginia Republican, last month said the chamber will take up between July 4 and August. The Senate has already passed a postal overhaul bill.

“We do not have to go down that path” of Greece’s economy if the House and Senate come to agreement on postal overhaul legislation, Donahoe told reporters after his speech.

The service and labor unions including the National Association of Letter Carriers have sought arbitration to reach new labor agreements.

“We need less expensive work hours, and we need more flexibility on who can do what jobs,” Donahoe said in his speech. “Nobody can operate with 1940 work rules in a 2020 environment.”

Work-rule restrictions include limits on the mail-delivery routes letter carriers can handle, he said after the speech.

To contact the reporter on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net

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


The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus