PMG Pat Donahoe (right) with NALC President Fredric Rolando (left).
Facing a projected loss of more than $8 billion for this fiscal year and a projected need to reduce its workforce by 220,000 employees by 2015, the Postal Service begins today contract negotiations with the National Association of Letter Carriers, AFL-CIO (NALC) and on August 30 with the National Postal Mail Handlers Union (NPMHU). The two unions represent 247,000 of the Postal Service’s 560,000 career employees.
Mail volume peaked in 2006 at 213 billion pieces. The effects of the recession, coupled with the ongoing shift to digital communications, resulted in mail volume plummeting 20 percent to 171 billion pieces last year. Over the last four fiscal years, the Postal Service reduced its size by 110,000 career positions and saved $12 billion in costs. Expenses, however, continue to exceed revenues in part due to an overstaffed workforce.
“If the Postal Service were a private sector business, it would have filed for bankruptcy and utilized the reorganization process to restructure its labor agreements to reflect the new financial reality,” said Anthony Vegliante, Chief Human Resources Officer and Executive Vice President. “Wages and benefits for all employees represent nearly 80 percent of our costs. To remain solvent, we must negotiate contracts that address our total labor costs and enable us to downsize quickly to adjust to America’s changing mailing needs while being fair to our customers and employees.”
The NALC represents 200,000 employees who work as letter carriers delivering mail primarily in urban areas. The NPMHU represents 47,000 employees who work in mail processing plants and Post Offices. Respectively, wages and benefits for the NALC- and NPMHU-represented employees exceeded $15 billion and $3 billion last year. Both contracts expire November 20, 2011.
Last week the Postal Service confirmed that it is exploring additional legislative proposals that ask Congress to allow it to establish its own health benefits program; administer its own retirement system; and, adjust the size of its workforce to match operational needs and the changing marketplace.
These new proposals are in addition to ones previously identified, including eliminating Congressionally mandated retiree health benefit prepayments; enabling the Postal Service to access Federal Employees Retirement System overpayments; and giving the Postal Service the authority to determine mail delivery frequency.
Mail volume peaked in 2006 at 213 billion pieces. The effects of the recession, coupled with the ongoing shift to digital communications, resulted in mail volume plummeting 20 percent to 171 billion pieces last year. Over the last four fiscal years, the Postal Service reduced its size by 110,000 career positions and saved $12 billion in costs. Expenses, however, continue to exceed revenues in part due to an overstaffed workforce.
“If the Postal Service were a private sector business, it would have filed for bankruptcy and utilized the reorganization process to restructure its labor agreements to reflect the new financial reality,” said Anthony Vegliante, Chief Human Resources Officer and Executive Vice President. “Wages and benefits for all employees represent nearly 80 percent of our costs. To remain solvent, we must negotiate contracts that address our total labor costs and enable us to downsize quickly to adjust to America’s changing mailing needs while being fair to our customers and employees.”
The NALC represents 200,000 employees who work as letter carriers delivering mail primarily in urban areas. The NPMHU represents 47,000 employees who work in mail processing plants and Post Offices. Respectively, wages and benefits for the NALC- and NPMHU-represented employees exceeded $15 billion and $3 billion last year. Both contracts expire November 20, 2011.
Last week the Postal Service confirmed that it is exploring additional legislative proposals that ask Congress to allow it to establish its own health benefits program; administer its own retirement system; and, adjust the size of its workforce to match operational needs and the changing marketplace.
These new proposals are in addition to ones previously identified, including eliminating Congressionally mandated retiree health benefit prepayments; enabling the Postal Service to access Federal Employees Retirement System overpayments; and giving the Postal Service the authority to determine mail delivery frequency.
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