Postal Updates

By Bill McAllister, Washington Correspondent

PMG takes aim at postal unions, mailers

January 07, 2015 04:18 PM

In a Jan. 6 speech at the National Press Club, departing Postmaster General Patrick R. Donahoe blamed “shortsightedness” by mailers and postal unions for undermining his efforts to resolve the United States Postal Service’s financial crisis.

Donahoe said postal management had established “a smart, comprehensive business plan” but said labor unions and mailers rejected it “because it threatened the status quo.”

That “myopic” attitude has allowed Congress to evade repeated requests for help that Donahoe said he laid before lawmakers during his four years as the Postal Service’s chief executive.

“My hope is that the new Congress will find ways to build consensus,” he said as lawmakers were convening for a new session.

Donahoe, who leaves office Feb. 1, suggested that the first step toward postal legislation will have to come from unions and mailers.

“It has to start with a real willingness on the part of all stakeholders to take a longer-term view of the organization,” he said.

“The narrow interests can’t continue to get in the way of the broader national interest.”

Predicting that the USPS will be “in such good hands” with its first female postmaster general, Megan Brennan, Donahoe said he was leaving the Postal Service after 40 years “with a lot of optimism and confidence.”

In his speech, Donahoe blamed mailers for viewing the future of the USPS “mostly through the lines of pricing”

This means “they don’t want the Postal Service to have greater product and pricing flexibility.”

Postal unions view the USPS “mostly through the lens of preserving jobs and benefits as they currently exist,” he said.

The postmaster general cited the American Postal Workers Union’s successful efforts against opening postal sales outlets in 82 Staples stores.

“It’s an example of the narrow, near-sighted view winning over the broader, long-term strategy,” he said, adding that the fight has made it difficult for USPS to find other retail partners.

One senior mailer told Linn’s that Donahoe’s analysis was right.

“The parochial position taken (including PostCom) by the various parties was a key reason the bill didn’t pass,” said Gene del Polito, president of the Association for Postal Commerce.

“Quite frankly, the Senate bill stunk,” he said. “No one other than Donahoe, and (its chief sponsors) Sens. Tom Carper (D-Del.) and Tom Coburn (R-Okla.) wanted it to pass.

“The Postal Service wouldn’t compromise on anything, and there were a few items that were objectionable,” said del Polito.

Postal union leaders attacked Donahoe’s farewell speech, saying his policies had caused many of the agency’s problems.

“It’s important to note that all the stakeholders have a constructive plan for the future — except for the departing postmaster general,” said Fredric Rolando, president of the National Association of Letter Carriers.

“His slash-and-burn approach ignores the facts and would destroy the Postal Service by degrading service to Americans and driving mail and revenue away.”

“We aren’t narrow-minded,” said Mark Dimondstein, president of the American Postal Workers Union. “We are single-minded in our belief that the Postal Service is a national treasure …

“We call on incoming Postmaster General Megan Brennan to reverse the destructive policies of her predecessor and champion this great American institution.”

Donahoe’s remarks appear to confirm what other mail industry officials have said.

Postal Service officials, the observers say, do not have the clout on Capitol Hill that mailers and labor unions have with their political action committees and large memberships.

The postmaster general’s speech was his farewell after four turbulent years as the nation’s 73rd chief postal officer.

In it he praised two female officers, Brennan and his chief marketing officer, Nagisa Manabe.

Manabe, who oversees the stamp program, won Donahoe’s kudos for “product development and marketing strategies” she developed to expand the USPS package business.

Her team has “done a wonderful job of getting closer to our customer and competing for their business,” Donahoe said. “We’ve now got a lot of momentum as an organization as a result.”

Donahoe used the speech to praise his cost-cutting efforts as postmaster general, despite continued congressional opposition to his planned plant closings.

“If we hadn’t pressed so hard and moved as quickly as we did, especially on the cost side of the equation, I have no doubt we would have run off the financial cliff by now,” he said.

“Had we done nothing, Congress would likely be bailing us out to the tune of billions of dollars annually.”

He attacked the plan, placed in a 2006 postal law, to make the Postal Service prefund the costs of its retiree health benefits.

He called that “my favorite example of an absurd mandate.”

“Unlike practically any other organization, the Postal Service is required to prefund the retiree health benefits that we have promised to our employees.”

Donahoe also began to speak about the agency’s operating profits in a more positive light, instead of focusing on its overall deficits that were triggered by the unpayable retiree health care costs.

Fiscal 2014 was the best of the past six years, he said, citing a “controllable income profit of $1.4 billion” compared with a “$2.4 billion controllable income loss in 2012.”

“That represents a very big success for the organization,” he said, noting that the agency has also accumulated $6 billion in cash for needed investments.