posted on June 13, 2012 05:46:44 PM new
Reuters) - The head of the U.S. Postal Service on Tuesday compared the cash-strapped mail agency to Greece and said Congress must pass a restructuring plan if it is to return to profitability.
"If we don't do something about the costs of this organization, we are going to look...like Greece," Postmaster General Patrick Donahoe said during a conference on the future of the U.S. Postal Service.
"People laugh when I say that, but it's true," he said.
The service lost $3.2 billion in the first three months of 2012 and recently began offering buyouts to thousands of employees in order to reduce its workforce. The agency has borrowed heavily from the government to meet its obligations.
Officials say drastic changes are needed to head off annual losses as high costs eat up shrinking revenue due to Americans' increasing online communications. The agency does not receive taxpayer money to pay for operations.
Donahoe said the agency's debt-to-revenue ratio is not far from Greece's debt-to-GDP ratio.
Generous public-sector salaries and pensions have driven Greece's debt load up to unsustainable levels. The nation is in the midst of political turmoil as it grapples with whether to accept a bailout in exchange for drastic austerity measures.
Donahoe told reporters after the speech that he did not believe the U.S. Postal Service was likely to default on payments or require a taxpayer bailout.
But he said Congress needs to step up and restructure the agency, or risk a fate similar to Greece.
"Unfortunately, if we don't do something, it will look like that," Donahoe said.
The U.S. Postal Service's profitability plan, which it wants Congress to approve, would reduce the number of facilities and workers, end Saturday mail delivery, pull employees out of federal health plans and into a postal plan, and eliminate a massive annual payment for future retiree health benefits.
The U.S. Postal Service needs permission from Congress for much of its plan. The U.S. Senate passed a bill in April that would give the service some of the authority it wants. The bill has gained little traction in the House of Representatives.
Leaders in the House tentatively expect to vote later this summer on a different bill, which would then have to be reconciled with the Senate version.
Donahoe spoke at PostalVision 2020, a conference focused on adapting the Postal Service as Americans increasingly send email and pay bills online. He told the audience that the agency must both cut costs and find new ways to expand its business.
For instance, the agency is looking at possible growth opportunities in its package business, which has been a bright spot in bleak financial quarters as users of sites such as eBay.com ship goods via USPS. That could include delivering packages at different times or expanding package delivery to seven days a week, Donahoe said.
(Reporting By Emily Stephenson)
U.S.PoliticsGreeceRelated Quotes and NewsCompanyPriceRelated News◦FedEx Corp
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Comments (18)2Cents wrote:
Stick a fork in it. It’s done.
Jun 12, 2012 5:16pm EDT -- Report as abuse
TonytheLizard wrote:
If UPS, Fedex, and DHL can run a public for profit company at a profit, what is the conundrum facing USPS? Their rates are competitive, the service is on par…
Could it be the sticky fingers of the Feds? IDK.
Jun 12, 2012 5:24pm EDT -- Report as abuse
Naqvaun wrote:
Sad. USPS is expected to function as a private entity, but its Board of Directors is Congress. And the Republican held House of Representatives has an incentive to see USPS fail. They won’t let any legislation to pass that would allow them to become solvent. It would ruin their narrative that all government is bad.
So, when USPS fails, how will the country deliver mail? Don’t say UPS/FedEx. They’ve already said absolutely not – there’s no money in delivering small amounts of mail 5 days a week to every household in America. They’d have to charge a lot of money to make it worthwhile. In fact, they’ve even admitted to offloading to USPS for shipping when they’re completely overburdened and unable to meet customer demands. Happens every year around the holiday season.
It’s gonna be interesting.
Jun 12, 2012 5:40pm EDT -- Report as abuse
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posted on June 15, 2012 05:16:46 PM new
Yes, it is very much like Greece. Much like Greece leadership who sold their souls to big banks on the backs of their citizens, Republican law makers also did the same thing to the Post Office by purposely suffocating their system with poison pill legislation.
I told you this months ago, I cited the specific law that now requires USPS to pay over $5 billion a year for the 10 years to pay for insurance pensions for employees for 75 years into the future.
This is nothing but politics created by the Republicans attempting to suffocate another great American system. It is nothing more than a bunch of anti-american ideological BS done in order to eliminate the Post Office and give our mail over to UPS and Fed Ex.
It is shameful.
Oh, and I should probably add... this subject is off topic. It has nothing to do with eBay. I am sure others like toolhound and kozersky will be here to slap your hands as the OT Police.
[ edited by shagmidmod on Jun 15, 2012 05:17 PM ]
posted on June 16, 2012 09:24:44 AM new
You bet it is Ebay related.
I used to spend may be 40 dollars on postage each year and now I am spending a few thousand dollars shipping packages.
USPS is not the only one who cant afford retiree obligations,recently a retired fireman in California was confronted by angry taxpayer when they spotted steaks in his shopping cart in a local supermarket.
posted on June 17, 2012 05:39:07 AM new
The problems with Greece,Italy,Argentina,Spain,Portugal are more than what you stated.
USPS is just not keeping its eyes on the ball,how long have we been using emails to correspond with each other?
How many packages do we ship via USPS every day and how many shipping labels are printed online?
To cry and cry over missing billions of 44 cents letters while not seeing a gold mine in e commerce is managing a business by looking into rear view mirror.
Years ago when most of us are using the phone line to connect to internet,some of us start getting a second line .
At first the phone companies are happy,more business,more revenue,right?
Then they find out these second lines are not like the first line,they dont hang up ,they stay online forever.
Then they complain,they are not making money,they are losing money when the machine stays online for 8-16 hours .
You would think these phone companies would know why we order a second line !
Now it is the cable companies which are doing the bitching and moaning!
[ edited by lostmymojo on Jun 17, 2012 05:40 AM ]
posted on June 17, 2012 01:25:51 PM new
shagmidmod wrote
"Oh, and I should probably add... this subject is off topic. It has nothing to do with eBay. I am sure others like toolhound and kozersky will be here to slap your hands as the OT Police"
I am sick of you making up whatever you want to say around here. I have not said anything about off topic subjects.Fact is I said we might as well have off topic subjects because no one comes here anyway. A couple of months ago you accused me of something else I did not say.
posted on June 17, 2012 01:36:54 PM new
SHAG wants to share the good news with us that Obamacare saves him money but some of us dont seem to agree or they are just anti Obama care ,so instead of congratulating him on saving money,they either yawn or tell him to get lost.
I am glad Shag is saving money,it is a big burden for a small business owner.
But is it really true saving or shifting the burden to somewhere else?
