Postal Service Seeks Exit From Union Deal

The U.S. Postal Service, which predicts a loss this year of as much as $9 billion, may seek to break union contracts so it can slash 220,000 jobs by 2015 and withdraw from federal health-benefit and retirement programs, according to draft proposals.

The collective bargaining agreements that prevent mass firings are keeping the service from reducing its workforce “as quickly as is now clearly needed,” the agency wrote in a draft document. The Postal Service has about 560,000 full-time, non- contract workers. Retirement and voluntary departures would only account for 100,000 jobs, the service estimated.

The Washington-based service last week said it may be forced to ask Congress to raise its $15 billion debt limit unless lawmakers allow it to delay a required payment for future retirees’ health benefits and make changes like stopping Saturday deliveries or closing more post offices.

“Desperate times may require desperate measures,” said Art Sackler, director of the Washington-based Coalition for a 21st Century Postal Service. “We are heartened to see the Postal Service is determined to confront its financial crisis aggressively.”

The group represents corporate mail customers including Bank of America Corp. and Verizon Communications Inc.

The Postal Service needs “these additional legislative changes to return to sound financial footing,” David Partenheimer, a spokesman, said in an e-mail.

No Taxpayer Funding

Employees of the Postal Service, set up to operate like a business, without taxpayer funding, are included in federal employee health and pension programs. Labor accounts for about 80 percent of the Postal Service’s costs.

“The Postal Service cannot address its current economic challenges without gaining control of its legacy costs, defining their breadth and scope, and setting up a reasonable program to fund them,” the service said in a draft document dated Aug. 2. “The Fortune 500 companies provide ample precedent.”

The Postal Service’s two largest unions, the American Postal Workers Union and National Association of Letter Carriers, criticized the proposals.

“Crushing postal workers and slashing service will not solve the Postal Service’s financial crisis,” APWU President Cliff Guffey said in an e-mailed statement.

To contact the reporter on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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