“PMG Pat Donahoe appeared recently on “The Kudlow Report,” to represent the Postal Service’s position on the need for congressional action to address the USPS requirement to pre-fund retiree health benefits, frequency of delivery and allow the Postal Service to access overpayments to the Civil Service Retirement System and Federal Employees Retirement System. Donahoe explains to CNBC host Larry Kudlow that legislative changes are “not a bailout.”
Partial excerpts from the interview:
this is not personal. and the post offices have treated me well down through the years. this is a financial issue. your postage stamps, first-rate postage has gone up twice the consumer price index in addition to these heavy losses. look, why don’t you just surrender and end the monopoly, see what happens with some private players coming in? why not give google a chance? why not give fedex a chance? i don’t see how, with all respect, snail mail can compete with e-mail or social media. i don’t see it, sir. all right.
here’s the thing. there’s going to be 168 billion pieces of snail mail, we’re not going away. let me talk about fedex. it’s our fifth largest customer. and we’re fedex’s largest customer. we will spend this year about $1.2 billion with fedex to transport our mail. they do a great job.
Larry: so patrick, look, i love fedex, fred smith is my favorite ceo. why don’t you let him asobsorb you? and he’ll make a deal with google and you all can live happily ever after without a government bailout.
PMG: why don’t we flip it and we’ll absorb them.
we deliver — they’re making money hand over fist. you’re losing money hand over fist, they’re making money hand over fist.
larry, larry — if congress acts and resolves $5.5 billion prepayment of health payments through retirees, fedex doesn’t pay that, u.p.s. doesn’t pay that. we’re paying that, we deliver on saturday, we don’t have enough mail to deliver saturday. fedex and u.p.s. never delivered on saturday. let us go to five-day. guess what? we make $100 million in profit. just like fedex and u.p.s.
i don’t know where those numbers come from, but whatever. i’m not here to badger you but here to speak the truth. no, no, no — your union workforce according to reports, all in wages and compensation, you’re $100,000 a year on average, this is something else. why don’t you sell off — you’ve got big real estate holdings. in some sense, you’re a real estate holding company. why don’t you make use of that and start selling off the real estate left and right?
we are, as a matter of fact, we sold the gpo, general post office in new york a couple of years ago for $232 million. as a matter of fact, we’ve cleared that and we’re waiting for people to move in and start building in that property that we sold to them. we sold properties all across the u.s.