U.S. Postal Service Seeks to Pare Full-Time Workforce

[TrueBlueTerrier]

U.S. Postal Service Seeks to Pare Full-Time Workforce in Talks With Union

http://www.bloomberg.com/news/2010-09-0 ... union.html" onclick="window.open(this.href);return false;

The U.S. Postal Service, which lost $5.1 billion in the first half of this year, will seek to cut costs by paring the size of its full-time workforce in contract talks with its largest labor union that start today.

The Postal Service, which spends 78 percent of its budget on salaries and benefits, opens negotiations with the American Postal Workers Union. The union, with 330,000 members, opposes a cost-cutting plan to scrap Saturday delivery. Talks with the 113,000-member National Rural Letter Carriers Association start in two weeks.

“Labor cost is a big piece of our success or not success because it affects prices,” Anthony Vegliante, the service’s chief human resources officer, told reporters in Washington, without discussing bargaining strategies. “We have to look forward and adjust things.”

Postal labor negotiators will meet with a union team led by APWU President William Burrus, who has vowed to fight demands for concessions in the talks to replace a four-year agreement that expires Nov. 20. The union represents postal mail clerks, mechanics, motor-vehicle operators and retirees.

“Once again naysayers warn of the imminent demise of the Postal Service,” Burrus said in an e-mailed statement. “They demand wholesale changes to the foundation we have built over our 40-year history, ignoring the fact that each provision in the expiring contract has a history of give-and-take.”

The Postal Service, which forecasts a cumulative loss of $250 billion by 2020, says workforce cuts are necessary as mail volume plummets amid the U.S. economic slump and a continuing shift to electronic communication.

‘Ability to React’

“We can’t count on mail coming back or product coming back,” Vegliante said. “We need the ability to react to different situations.”

Mail volume in the three months ended June 30 dropped 1.7 percent, the smallest decline in three years. It fell 13 percent in the 2009 fiscal year. The post office from 2008 to 2009 trimmed the ranks of career employees 6 percent, to 623,000. The agency squeezed the workforce through attrition and, a year ago, by offering incentives to persuade senior employees to retire.

The Postal Service allocates more of its budget on pay and benefits than Atlanta-based United Parcel Service Inc., which spends 61 percent, and Memphis, Tennessee-based FedEx Inc., at 43 percent. Both companies compete for package- and express- delivery customers.

The Postal Service has asked Congress for permission to end Saturday delivery as soon as next year to save money and is seeking approval from its regulator to increase rates faster than inflation.

Letter Carriers

The agency on Sept. 13 starts talks with the National Rural Letter Carriers Association, which it said represents 67,000 career and 48,000 non-career employees. Five-year agreements with the National Association of Letter Carriers and the National Postal Mail Handlers Union expire next year.

In negotiations on the current contracts, the four unions agreed to increase employees’ contributions to health benefits by 1 percent a year. After four years, the Postal Service covers about 80 percent of the costs, compared with about 72 percent for most federal agencies, Vegliante said.

The agency might save $560 million a year if health-benefit contributions were the same as the rest of the U.S. government, Mark Saunders, a Postal Service spokesman, said in an e-mail.

Burrus’s union agreed on the new contract while the rural letter carriers pact was settled by arbitration, Vegliante said.

Congressional Recommendations

A Congressional Research Service report on July 29 said Congress “may wish to consider measures that would provide the USPS with increased means to control its long-term labor costs,” a change advocated by a 2003 federal commission on the Postal Service’s future.

One change might require arbitrators, who step in when the two sides are unable to reach a deal, to consider the agency’s financial condition in their deliberations.

Vegliante said he wants an agreement to avoid having an arbitrator decide.

“You don’t want a third-party making your decisions,” he said. “You don’t want to take that risk.”