USPS Misrepresentations Lead to Barrage of Criticism

(This article appeared in the May/June 2012 issue of The American Postal Worker magazine.)

Greg Bell, Executive Vice President

The Postal Service’s top management, including Postmaster General Donahoe, has been drawing fire from all sides in recent months, after a series of disturbing and embarrassing revelations.

Criticism of postal management started mounting after the USPS filed a request with the Postal Regulatory Commission (PRC) for an advisory opinion on plans to degrade service standards — to eliminate overnight delivery of most first-class mail and periodicals, and generally slow delivery. Prior to the September request, postal managers had been telling legislators and affected communities that consolidating mail processing facilities would not affect service.

APWU-led protests at town hall meetings, along with rallies and other activities throughout the fall and winter, demonstrated the depth of public opposition to USPS plans to consolidate mail processing plants, and prompted a storm of criticism from lawmakers.

The heat intensified in March when Sen. Susan Collins (R-ME) took to the Senate floor to criticize Donahoe for “proceeding with a disastrously flawed plan” to close hundreds of mail processing plants.

“This coupled with the still-pending closures of almost 4,000 mostly rural post offices and the Postmaster General’s push to eliminate overnight and Saturday delivery, tells me that the current Postal Service leadership is gravely underestimating the consequences of lesser service on revenue from customers who depend on the service as it is provided today,” she said.

“I find myself in a quandary, one created by the Postmaster General himself as he shifts from plan to plan, from negotiation to negotiation,” Sen. Collins concluded.

The senator’s complaint about shifting from plan to plan is well-founded. Testifying before a House committee on April 5, 2011, the PMG told lawmakers the USPS needed Congress to do three things to alleviate the agency’s financial crisis: address the mandate to pre-fund retiree health benefits, return USPS overpayments to the Federal Employees Retirement System (FERS), and give management delivery flexibility.

“Get those things out of the way and you’ll never see us again,” Donahoe said.

But just four months later, management had an entirely new wish list for Congress: On Aug. 11, the USPS announced that it would seek congressional support for legislation to eliminate employees’ protections against layoff; remove postal workers from the Federal Employees Health Benefits Program (FEHBP), and separate USPS employees from federal retirement programs.

Since August, the emphasis and details of the Postal Service’s plans have changed many times.

Deliberately Misleading

On March 21, just days after Sen. Collins’ speech on the Senate floor, a secret study was made public indicating that revenue losses from service standard changes could wipe out any expected savings from the consolidations.

During cross-examination by the APWU before the PRC, a USPS witness admitted that the Postal Service’s initial market research on the network consolidation plan indicated it could result in net revenue losses as high as $1.9 billion. The USPS abandoned the study and conducted a new survey that estimated net revenue losses would total $500 million.

Despite claims by the Postal Service that the original survey was flawed, the company that performed the study said the research was solid.

Management’s actions aroused suspicion that the USPS abandoned the original study because it didn’t support the consolidation plan and left many with the impression that the Postal Service is deliberately misleading Congress and the public. There’s no doubt in my mind about that.

Following disclosure of the original research, Rep. Gerry Connolly (D-VA) blasted postal management. “This previously redacted study shows that arbitrary downsizing proposals actually threaten the financial viability of the Postal Service,” he said. “We need to build a new Postal Service business model that takes advantage of e-commerce and maintains Universal Service, not be forced into false choices which dismantle rather than reform this Constitutionally-mandated public service.”

Last December, the PRC issued an opinion that challenged the methodology the Postal Service used in developing its plan to close more than 3,600 retail facilities by 2015. The PRC concluded that the USPS lacked sufficient data for determining which closures would reduce costs the most and lacked sufficient data and analysis to make the best decisions.

PRC Chairman Ruth Goldway said that the USPS failed to give careful consideration to “each individual community’s needs,” and said the panel’s review of community challenges to post office closings reveals “a pattern of inaccurate and overly optimistic economic savings calculations and of careless disregard of community concerns.”

With management’s repeated misrepresentations becoming plain for all to see, the PMG is rapidly losing any credibility he had with Congress, the public and employees.