Chaffetz calls Postmaster General’s retirement package ‘ridiculous’
Rep. Jason Chaffetz called the $5.5 million retirement package for outgoing Postmaster General John Potter absurd and unfair in the wake of the United States Postal Service’s announcement that it had lost $8.5 billion this year.
“That was ridiculous,” Chaffetz said in a phone interview with The Daily Caller. “It doesn’t seem fair to anybody.”
The congressman from Utah is the ranking Republican member on the Subcommittee on Federal Workforce, Postal Service, and District of Columbia. He has been working with California Rep. Darrell Issa, the ranking Republican member of the Oversight Committee, on “introducing a comprehensive postal reform bill,” he said.
PMG Potter Honored With Lifetime Membership In Mailers Group
Postmaster General Jack Potter is an official lifetime member of the Mailers’ Technical Advisory Committee (MTAC).
The group — which includes representatives of more than 100 commercial mailers and mailing associations — extended that honor to Potter at its quarterly meeting this week, as members recognized the PMG for his career-long support and dedication to the mailing industry. Potter will retire from USPS Dec. 3.
“Stay the course,” Potter told the group. “The mailing industry works very well as a team. If anything, we need to work together even more closely now than 20 years ago when I first attended an MTAC meeting.”
Potter said the Postal Service and mailers have strong successes to build upon. “Our strengths are our people,” he said. “People are the mainstay of our organization and people are the heart of the mailing industry. If we stay together as a group, I see much progress in the future.”
DPMG and COO Pat Donahoe, who will become PMG when Potter retires, also addressed the group, committing to mailers to continue to improve service — which in fiscal year 2010 reached record levels, despite declining mail volume.
“A major goal of mine is to make a better customer experience,” said Donahoe. “Dependability, reliability and service on the one hand, and positive customer experience on the other — those things together, along with increased visibility, give us real opportunity to grow the top line.”
Donahoe said the Postal Service will focus on becoming leaner, smarter and faster; realigning operations to match the steadily declining mail volumes predicted for the coming decade. He also outlined other business strategies for USPS going forward, including strengthening the business-to-consumer channel.
source: USPS
Outgoing Postmaster General’s $5.5 million golden parachute
Postmaster General John E. Potter will earn about $5.5 million in deferred compensation, retirement benefits and accrued annual leave when he leaves the U.S. Postal Service next month, according to financial statements. Potter also is eligible for up to two years of outplacement assistance and may continue receiving health-care insurance from USPS for up to one year after his departure.
“Prior to 2010, the Postal Service infrequently entered into financially immaterial transactions with certain highly-limited groups of eligible employees. Until 2009, in connection with the relocations of eligible employees, the Postal Service provided fully-secured mortgage loans to assist in the purchase of residential housing at the new location.
In 2005, the Postal Service made a 30 year secured loan to Susan Plonkey, who served as Acting President, Shipping and Mailing Services, from June 2, 2010 until August 13, 2010. At the time the loan was originally made, Ms. Plonkey served as Vice President, Service and Market Development. The initial loan amount was $686,815. The highest principal amount of the loan during fiscal year 2010 was $660,320. The amount of the loan outstanding as of September 30, 2010 is $653,006. During fiscal year 2010, Ms. Plonkey paid $7,314 in principal and $19,518 in interest on the loan. 60% of the loan bears interest at the rate of 5.125% and the other 40% of the loan does not bear interest. Instead, the Postal Service will share in 35% of the appreciation in the value of the residence upon sale, or the occurrence of certain other events resulting in the prepayment or acceleration of the loan.
The above loan was made pursuant to an established program designed to provide financial assistance to eligible employees that transfer to high cost-of-living areas, so that they are able to purchase a suitable home. This program specified certain loan parameters, including the maximum amount of any first or second mortgage, required down payments, and the maximum shared appreciation portion of the loan. The fixed portion of the loan is at market rates at the time the loan was made.”
Millionaire Postal Executives Are Underpaid, Consultant Says
By government standards, the U.S. Postal Service’s top executives, with their multimillion-dollar pension packages, are doing quite well. But their compensation is lagging further behind their counterparts in private industry, according to a USPS consultant.
“Towers Watson [a major management consulting firm] found that USPS executive base salaries are significantly below market when compared against published survey data of comparable jobs in the private sector,” says the Postal Service’s annual financial report, released today. “Moreover, the most recent assessment using 2010 data indicates that USPS executive salaries have continued to erode further over the past twelve months.”
full story Dead Tree Edition
Other Postal Execs
Paul Vogel President, Mailing and Shipping Services since August 2010. Served as private sector consultant focusing on postal industry strategy and international logistics from 2009 to August 2010. Managing Director of Global Business and Senior Vice President from 2006 to 2009. Vice President, Network Operations Management prior to 2006. Vogel is a retired Postal Exec rehired by USPS.
Employment Agreement
The following shall constitute the contract of employment between the United States Postal Service (“Postal Service”) and Paul E. Vogel (“Mr. Vogel”).
1. This contract is entered into under the authority of section 204 of Title 39 of the United States Code.
2. The Postal Service agrees to employ Mr. Vogel in the position of President, Shipping & Mailing Services at the Postal Service’s Headquarters located at
475 L’Enfant Plaza, S.W. , Washington , DC. Mr. Vogel’s employment in this position shall commence on August 14, 2010.
3. The Postal Service will compensate Mr. Vogel with a basic salary paid at the annual rate of $245,000, provided however, that as more fully provided in
paragraph 4 below, certain amounts will be withheld from this sum because Mr. Vogel will be a reemployed annuitant. In accordance with standard Postal
Service policy and practice, this basic salary rate may be reviewed and adjusted on an annual basis during each succeeding year in which this
Agreement remains effective. Unless required by law, the basic salary rate will not be lower than set forth here. In addition to a basic salary, Mr. Vogel
will be eligible to participate in the Pay for Performance Program, or any successor program, that is generally applicable to officers of the Postal
Service. Mr. Vogel’s participation in this program shall be according to the standard policies and practices governing the Pay for Performance Program,
or any successor program.
Vogel will get a lump sum of $95, 000 plus 25% of his salary each calendar year
Chief Financial Officer Joseph Corbett will get a $75, 000 bonus plus 25% of his salary
The Full Report and Vogel Agreement can be found here USPS 10-K Report 2010 (PDF)
Postal Service Board Recognizes Postmaster General Potter
Filed under: board of governors, postal, postal news, press releases
Postal Service Maintains Exceptional Service Record
WASHINGTON — Today marked Postmaster General John E. Potter’s last appearance before the Postal Service Board of Governors in open session. Potter recently announced his plan to retire in December. In tribute to his distinguished career, the Board today honored Potter with the prestigious Benjamin Franklin Award.
In his remarks, Louis Giuliano, chairman of the Board of Governors, praised Potter, characterizing his tenure as “the presence of a strong, steady hand at the wheel.”
“The Board is enormously pleased to have had a leader like Postmaster General Potter at the helm during this critical time,” said Giuliano. “He led the Postal Service through some of the most consequential moments since its founding. From the aftermath of the September 11 attacks and anthrax incidents to numerous natural disasters, and from deep recession to unprecedented technological change, Jack steered the ship through uncharted waters with remarkable dedication and skill.”
The Board has selected Deputy Postmaster General Patrick Donahoe to become the next Postmaster General.
Other Board Matters
The Board welcomed Governor Dennis Toner to his first open session of the Board. Toner, of Rehoboth Beach, DE, was appointed by President Obama and confirmed by the Senate Sept. 16. And the Board bid farewell to Carolyn Gallagher who has been a member of the Board for the past 7 years. During her tenure, Gallagher served as both vice chairman and chairman of the Board.
Also at today’s board meeting, Lou Guiliano was re-elected chairman and Thurgood Marshall Jr. was re-elected vice chairman.
Consumer Advocate Report
In other news, Vice President and Consumer Advocate Delores Killette presented Service Performance and Customer Experience Measurement (CEM) reports for the fourth quarter of 2010.
* 96.7 percent of single-piece First-Class Mail in overnight service areas arrived on-time, an improvement of 0.4 compared to the same time a year ago.
* 94.8 percent of two-day service area single-piece First-Class Mail arrived on time, and
* 93.7 percent of three-day service area single-piece First-Class Mail arrived on time.
The Postal Service implemented the Customer Experience Measurement (CEM) program at the start of fiscal year 2010, replacing the Customer Satisfaction Measurement (CSM) program that has been in place since 1991. CEM scores reflect end-to-end customer experience across all channels.
From the CEM ratings:
* 86.8 percent of residential customers rated their experience as “very satisfied” or “mostly satisfied,” and
* 82.0 percent of small/medium businesses rated their experience as “very satisfied” or “mostly satisfied.”
Separately, Killette noted that the Ponemon Institute ranking of U.S. Brands Americans Like Best showed that the U.S. Postal Service is ranked 15 on the list of the 20 most liked-brands, the only delivery service ranked in the top 20.
The Postal Service receives no tax dollars for operating expenses, and relies on the sale of postage, products and services to fund its operations.
Statement of Postmaster General John Potter on PRC Ruling
Filed under: postal, postal news, PRC, press releases, usps
Fully Paying Retiree Health Benefit Mandate
We are disappointed to learn that the Postal Regulatory Commission (PRC) has denied our price filing. But we are encouraged by their acknowledgment and understanding of the larger financial risk we face through the mandated prefunding of Retiree Health Benefits.
Clearly, the Postal Service is a viable business. Maintaining that status requires elimination of several legislatively-imposed constraints that hamper our ability to operate efficiently and profitably.
Specifically: 1) enable us to alter frequency of delivery consistent with use of the mail; 2) allow us to close unprofitable post offices; 3) restructure our obligation under a 2006 law to prefund retiree health benefits, an obligation not applicable to any other private or government entity; 4) permit us to create and offer products and services beyond mail; 5) assure that arbitrators consider the financial health of the Postal Service when agreement cannot be reached with our labor unions; and 6) resolve overfunding of our pension systems. Legislation has been introduced in Congress to address these issues.
We will need to take a much closer look at the ruling from the PRC in order to make an informed decision about what options we have and what may be the best course of action for our customers, our employees, our stakeholders and the American public.
The Postal Service ends the current fiscal year with approximately $2 billion cash and available credit, meeting all our end-of-year financial obligations, including a $5.5 billion payment to the Retiree Health Benefit Fund as required by law.
As we have stated repeatedly throughout the year, the Postal Service sought a deferral of this $5.5 billion payment to minimize the risk of defaulting on our financial obligations in Fiscal Year 2011. Unfortunately, no legislative action has been taken at this time.
The financial risk remains. We will carefully manage every dollar we spend in the upcoming fiscal year. Our current forecast shows that we will not have sufficient cash to make the $5.5 billion payment due on Sept. 30, 2011, and any major disruption, whether in volume loss or unforeseen circumstances, could cause us to default on financial obligations earlier in FY11.
In the midst of financial and regulatory challenges, the Postal Service achieved record productivity gains in 2010 and a reduction of over 100,000 career employees and cost savings of over $10 billion during the last three years.
As always, service to our customers remains our number one priority. No financial challenge or uncertainty will change that. We will continue to work with Congress and our stakeholders to implement necessary changes to ensure a viable Postal Service for decades to come.
John E. Potter
Postmaster General of the United States
CEO of the U.S. Postal Service
Postmaster General Hails Carper Legislation
Filed under: postal, postal news, postal reform, press releases, usps
“Roadmap to Recovery” for Postal Service
Legislation introduced today by Sen. Tom Carper (D-DE) is a roadmap to recovery for the Postal Service. It incorporates many of the key elements we have identified as necessary and essential to allow the Postal Service to meet the changing needs of its customers.
The Postal Operations Sustainment and Transformation (POST) Act of 2010 is creative in that it alleviates our retiree health benefit burden while bringing resolution to the pension overpayment dilemma we’ve faced.
It permits us to step into the 21st Century by enabling elemental reforms to our network, our infrastructure, and our labor relations and it reduces the number of days we provide door to door delivery service to more closely align our costs and the needs of our customers.
We commend Sen. Carper for his leadership and thank him for his continued support of the Postal Service and his recognition of the vital role we play in the lives of the American people.
It’s my hope that this legislation will enjoy broad support in the Congress.
John E. Potter
Postmaster General of the United States
CEO, U.S. Postal Service
Postmaster General Addresses Need for Fundamental Change
Work Hours Reduced, Productivity Increased as Fiscal Year Nears End
PORTLAND, OR — In his annual state of the business address to the mailing industry, Postmaster General John E. Potter today stressed that long-term sustainability for the Postal Service will be achieved through fundamental change.
“The Postal Service must have the ability to manage its business, and to adapt quickly to the needs of our customers and the marketplace,” said Potter. “And our business model must change to reflect the reality of a volatile economy and a communications marketplace that has been undergoing a transformation as profound as anything that has ever come before.”
Despite cutting spending by $3 billion in 2010, the Postal Service continues to seek meaningful change for greater control over business decisions, including delivery frequency, pricing and products, public policy and workforce flexibility.
Potter’s comments came during the National Postal Customer Council (PCC) Day broadcast, an annual event that brings together mailers, industry partners and customers to recognize their contributions to the Postal Service and outline future plans and goals. PCCs are a network of community-based business mailers and representatives of the Postal Service, who meet regularly to share ideas and resources to create a closer working relationship.
In the midst of financial and regulatory challenges, the Postal Service achieved major milestones during fiscal year 2010, including:
- 17 percent reduction in work hours
- 20 percent increase in Total Factor Productivity
- The smallest career complement in 10 years — a reduction of 200,000 positions through attrition or retirement, 100,000 over the last three years.
The Postmaster General also looked forward, telling PCC members that new flat-rate products and a Priority Mail “Regional Rate Box” are being developed and will be available as of January 2011.
Other successful innovations in mail will return, including the Summer Sale, an expansion of the Saturation Mail Sale and a new incentive program included in the exigent price filing, “Reply Rides Free,” that would allow mailers to use bill and statement mailings for advertising messages.
Potter also challenged PCCs and the mailing industry to embrace change, asking for their best ideas on new products and services the Postal Service could pursue and encouraging them to become a part of the Postal Service’s “era of innovation.”
Members of the Mailers Technical Advisory Committee participated in an Innovation Symposium in August and a similar symposium is planned for October with CEOs, consumer groups and marketing professionals around the country.
PCC leaders were asked to solicit their members for three innovative ideas and to submit them for consideration at usps.com/pcc. Regular updates will be provided and a special reporting session is planned for the National Postal Forum next May.
But, Potter stressed, even as the Postal Service focuses on new ways of doing business and changing its business model to address a constantly changing consumer and business environment, the Postal Service remains true to its mission of universal service.
“Service is still our priority, which we’ll continue to improve as we work toward achieving long-term sustainability through fundamental change,” he pledged.
National PCC Day also showcases the work of PCCs and includes a series of awards recognizing outstanding service and individual achievement. The following award winners were announced:
- PCC Industry Member of the Year: Theresa Peterlein, Mid-Michigan PCC
- PCC Postal Service Member of the Year: Laurel Stengal, Long Island PCC
- PCC of the Year: Tampa PCC (large market), Central Missouri (small market)
- PCC Mentor of the Year: Sacramento PCC
- Communication Program Excellence: Greater Portland PCC (gold), Buffalo/Niagara PCC and Greater New York PCC (silver) and New Hampshire PCC (bronze)
- Education Program Excellence: Greater Portland PCC (gold), Buffalo/Niagara PCC (silver) and Long Island PCC and Tampa PCC (bronze)
More information on Postal Customer Councils and National PCC Day can be found at usps.com/pcc.
PMG Potter’s Response To White House On Pilot Test For Five-Day Delivery
Excerpts from PMG John Potter letter regarding Pilot test on Five-Day Delivery:
From an operational standpoint a pilot test conducted on a regional basis would increase some of our costs in the short term. For example, we either would have to make manual changes to mail processing sorting schemes and payroll or utilize information technology to program such changes for a limited time or geographic area. We believe that our information technology programming changes, estimated to cost $10 million-$12 million for a national, full-time implementation, would grow significantly to accommodate a test, as would administrative costs if we decided to forego programming changes in favor of performing manual processing for the defined test period. We also would have to communicate the pilot’s parameters to the public and employees. During such a test we would be unable to make the permanent, necessary changes to our delivery workforce, transportation networks, and mail processing operations that would yield the projected $3.1 billion savings. The largest financial impact of a pilot would be the fact that many career employees in the pilot area would have to be paid not to work or be relocated, white many of our non-career and part-time employees would see their wages reduced or eliminated. Any savings in wages that the Postal Service would realize during the test would immediately disappear at the test’s conclusion.
It may be helpful for me to offer a distinct example of the internal challenges that a test would present. In City Letter Carrier operations, full -time, regular City Carriers generally are assigned to a single delivery route that they service five days per week. These Carriers are scheduled to have Sunday off as well as one other day of the week. A category of full-time Carriers, known as Carrier Technicians. also are scheduled to work five days per week; but instead of servicing the same route each day, they cover the day off- and the route–of five different carriers. The five-day delivery proposal anticipates the reduction of approximately 25,000 full-time City Carrier assignments and $2.2 billion in annual savings in City Carrier operations. The savings are generated primarily by the fact that under a five-day delivery model, regular Carriers assigned to a single route would have Saturday and Sunday off, eliminating the need for the Carrier Technician and Relief Carrier assignments. We plan to transition full-time Carrier Technician assignments into Carrier positions (that cover a single route) that become available through attrition (a significant percentage of our current workforce is eligible for retirement between now and 2014). Under a pilot test we would be unable to carry out this Carrier alignment, and during the test itself, we would have a surplus of Letter Carriers for whom we would have to find productive work within their craft, and if unsuccessful, pay them to perform no work because our contract with the National Association of Letter Carriers guarantees full-time, regular Carriers a 40-hour work week. Under our national proposal for five-day delivery we Intend to preserve the employment of our career City Carriers.
read letter from Postmaster General John Potter submitted to the Postal Regulatory Commission
USPS Announces Realignment of Shipping, Scanning And Product Tracking Services
DRIVING REVENUE GROWTH
REBLIN, COCHRANE TO LEAD CONSOLIDATED GROUPS
In a strategic organizational shift designed to achieve long-term business objectives, PMG Jack Potter today announced realignments within two groups representing key areas of revenue growth for USPS.
The Expedited Shipping and Ground Shipping groups have merged into a single Shipping Services group. Potter has named Gary Reblin, formerly vice president, Expedited Shipping, to lead the unified group as vice president, Shipping Services.
Also, USPS has formed the Product Visibility and Operational Performance group to develop a world-class customer information platform through scanning technologies and product tracking services. Potter named Jim Cochrane, formerly vice president, Ground Shipping, to lead the new group as vice president, Product Visibility and Operational Performance.
In his expanded role, Reblin will be responsible for all shipping products and services and customer service improvements, including product solutions, marketing, promotions and revenue in both market-dominant and competitive product classifications.
In his new group, Cochrane will lead the development of innovations in scanning technologies and tracking systems, including the Intelligent Mail barcode, and the implementation of product scanning improvements. His team will focus on operational performance, product intelligence and technology development. Cochrane will report to the Intelligent Mail and Address Quality senior vice president.
“Gary and Jim have solid track records in building our shipping services business,” said Potter. “Their proven leadership is critical to continued growth in our shipping business and the implementation of technology-driven solutions that match the needs of a rapidly evolving mailing industry.”
Potter also said the new internal structures will result in more competitive package products and scanning visibility information for customers without creating additional staffing.
source: USPS News Link
Media Outlets Ignore PMG’s Comment About “Value of Going to Four Days” Mail Delivery
As PostalReporter reported on Monday, Potter said it’s possible that USPS can remove a second day of delivery. But the media did not pick up on this comment posted on the Washington Post website.
Postmaster General John Potter leads a cry for retrenchment
Potter expects that unions will make concessions during negotiations this year, but William Burrus, president of the American Postal Workers Union, warned otherwise. “I’m not going to make any concessions,” Burrus said. “He’s trying to deny services to the American public through the service reductions. All of this is designed to accelerate significant savings and become a delivery arm of major mailers. “The value of going to four days — removing a second day — is even greater,” he said. Although no such plans exist, Potter said that Tuesdays are the second-slowest day of the week.