August 6, 2021
Alliance Members and Sponsors,
Moving ahead to slow down the mail
Despite opposition stated by two new Governors, the Postal Service announced at its open meeting today that it will move ahead with its PLAN to lengthen the service standards for almost 40 percent of First Class Mail and 7 percent of Periodicals Mail beginning next month. This was the first open meeting with a full slate of Governors and a PMG and DPMG since 2010. It also was the first open meeting attended by the three new Governors appointed by President Biden who were sworn in on June 15.
Public opposition by two Governors
Introductory remarks by Chairman Ron Bloom and Postmaster General Louis DeJoy both mentioned the fact that the Governors do not always agree on everything. That presaged statements by new Governors Ron Stroman and Anton Hajjar expressing deep reservations about the mailing standards slowdown. The decision was discussed and voted on at yesterday’s closed meeting of the Board. It is very unusual for Governors to publicly express disagreement with a decision made by the Board of Governors.
Ron Stroman was strongly against the decision. Following is a transcription of Stroman’s statement by Washington Post reporter Jacob Bogage.
Governor Hajjar spent most of his remarks with a preamble praising all of the great things in the USPS PLAN, especially those benefitting the union employees he used to work for. He concluded that it would be better to delay any slowdown in mailing standards until after the more positive, innovative elements of the plan were implemented.
Vice-Chairman Roman Martinez IV spoke after the two dissenters. He praised what a great leadership team is at the helm of USPS with several references to their logistics expertise and experience. He said that the amount of work the went into the PLAN was super impressive. He said that he is 100 percent behind the PLAN in its entirely.
(Postal leadership referred to the ten-year PLAN as DFA several times, short for Delivering for America. As a baseball fan, it’s hard not to think of the term DFA meaning Designated for Assignment, which is the modern term for cutting a player from the roster.)
Actual USPS losses pale in comparison to the PLAN
CFO Joseph Corbett gave a nine-month update through June, for the October 2020-September 2021 fiscal year. He provided three versions of USPS losses versus the same nine months last year.
9 Months FY 2021 FY 2020
Controllable loss $1.0 billion vs $2.7 billion
Net loss (GAAP) $2.8 billion vs $7.5 billion
Net loss w/o workers comp adjustments $4.3 billion vs $5.6 billion
With PMG DeJoy now in his second year, the loyal CFO is trying to present both progress from the prior year but also continuing urgency to implement the full PLAN. Indeed, Corbett said that with FULL implementation of the PLAN, losses will be a “thing of the past” and the Postal Service will be “self-sustaining.”
What is most remarkable about the reported losses for three-quarters of FY 2021 is that the USPS PLAN is entirely premised on closing cumulative losses of $160 billion over ten years. The first year of the USPS projection on page 7 of the PLAN is FY 2021 where they predict a $9.7 billion loss without the PLAN and a $9.4 billion loss with the PLAN. But they have an actual loss of $2.8 billion with only three months to go in FY 2021. And that gross purposeful inaccuracy is in the first of a ten-year projection. How misleading do you think the out-years are?
Will PLAN discipline hold?
Despite the misleading forecast of the PLAN itself, DeJoy has enforced an iron discipline on his loyal Governors and senior postal staff to repeatedly say that the full PLAN must be implemented, with no exceptions or exclusions. Bloom, Martinez, and Corbett in particular emphasized that point along with DeJoy in today’s public meeting.
The first snag in the sweater vest of the PLAN’s ironclad hold on USPS appeared today with the dissent publicly stated by Governors Stroman and Hajjar. Will more follow?
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