Postal Service suspends defined benefit payments [Archive]

pphilfran

6/24/2011, 06:34 PM

http://www.usps.com/communications/newsroom/2011/pr11_074.htm

WASHINGTON — The U.S. Postal Service has informed the Office of Personnel Management (OPM) of its intention to suspend its employer’s contributions for the defined benefit portion of the Federal Employees Retirement System (FERS) to conserve cash and preserve liquidity. The Postal Service has a FERS account surplus valued at $6.9 billion.

“We will continue to transmit to OPM employees’ contributions to FERS and also will continue to transmit employer automatic and matching contributions and employee contributions to the Thrift Savings Plan,” said Anthony Vegliante, chief human resources officer and executive vice president.

The Postal Service pays about $115 million every other week to OPM for the FERS annuity. Suspension of payments, effective June 24, will free about $800 million in the current fiscal year.

The Postal Service continues to cut costs significantly with initiatives to reduce the size of its labor force, the number of mail processing facilities and administrative overhead. Over the last four fiscal years, the Postal Service has reduced its size by 110,000 career positions and saved $12 billion in costs.

The Postal Service also is generating new revenue by opening cost-effective new retail locations in places where people already shop, including grocery stores, drug stores and office supply stores, and introducing other new product and pricing initiatives.

Despite significant cost reductions in areas within its control, and even with this emergency action, the Postal Service needs Congress to enact legislation that would do the following to return the Postal Service to financial stability:

Eliminate the current mandates requiring retiree health benefit pre-payments.
Allow the Postal Service to access Civil Service Retirement System and FERS overpayments.
Give the Postal Service the authority to determine the frequency of mail delivery.

The Postal Service receives no tax dollars for operating expenses, and relies on the sale of postage, products and services to fund its operations.

pphilfran

6/24/2011, 06:35 PM

http://www.foxnews.com/politics/2011/06/22/issa-warns-new-bailout-as-postal-service-suspends-pension-contributions/

WASHINGTON -- Rep. Darrell Issa on Wednesday called for the U.S. Postal Service to clean itself up to avoid a potential taxpayer bailout, after the broke mail service announced it is suspending its employer contribution to its pension plan.

The post office said it has informed the Office of Personnel Management that the $115 million payment to the Federal Employee Retirement System made every two weeks will be suspended effective Friday. The action is expected to free about $800 million in the current fiscal year. The post office's FERS account currently has a surplus of $6.9 billion, the agency said.

"We will continue to transmit to OPM employees' contributions to FERS and also will continue to transmit employer automatic and matching contributions and employee contributions to the Thrift Savings Plan," said Anthony Vegliante, chief human resources officer for the post office.

Issa, R-Calif., pointed out that the $800 million in savings doesn't even account for 10 percent of USPS' $8.3 billion deficit last year.

"The United States Postal Service, our nation's second largest employer, is now past the brink of insolvency," said Issa, chairman of the House Oversight and Government Reform Committee.

"This would not be tolerated in a private company. ... USPS needs fundamental structural and financial reforms to cut costs and protect taxpayers from an expensive bailout," Issa said.

Art Sackler, coordinator for the Coalition for a 21st Century Postal Service, a group representing the private sector mailing industry, said Congress needs to take action to reform the Postal Service.

"The USPS is hanging by a thread, along with 8 million private sector jobs that depend on the mail," Sackler said.

Over the last four years the Postal Service has cut its staff by 110,000 and reduced costs by $12 billion. The agency has also proposed eliminating delivery on Saturdays to save money and is working on closing small post offices and consolidating sorting and other operations.

The post office, unlike other federal agencies, is also required to make an annual payment of more than $5 billion as an advance contribution to future retiree medical costs.

But Sen. Tom Carper, D-Del., said In essence, this is the canary in the coal mine moment for the Postal Service is that even when it overpays into retirement accounts -- to the tune of $50 billion to $75 billion for the Civil Service Retirement System -- it is unlawful to remove the overpayments to pay for other expenses.

Carper said he has introduced legislation to change that while also getting Congress out of the way of trying to salve the USPS' wounds.

The legislation would "give the Postal Service the room it needs to manage itself and avoid it becoming the latest victim of congressional gridlock," Carper said, adding that without it, the mail service could "cease to exist in the very near future."

"A shutdown of an industry of its magnitude, with some 7 million employees and more than $1 trillion in revenue every year, would be catastrophic to our fragile economic recovery," Carper said in a written statement.

Read more: http://www.foxnews.com/politics/2011/06/22/issa-warns-new-bailout-as-postal-service-suspends-pension-contributions/#ixzz1QEupBgor

pphilfran

6/24/2011, 06:36 PM

http://www.businessweek.com/news/2011-06-22/u-s-postal-service-to-stop-paying-into-worker-pension-fund.html

June 22 (Bloomberg) -- The U.S. Postal Service, facing insolvency without approval to delay a $5.5 billion payment for worker health benefits, will suspend contributions to an employee retirement account to save $800 million this year.

The Postal Service will stop paying employer contributions to the defined-benefit Federal Employees Retirement System, which covers about 85 percent of career postal workers, it said today in an e-mailed statement. The $115 million payment, made every other week, will stop on June 24, the statement said.

Suspending payments to the retirement account will help “conserve cash and preserve liquidity,” the statement said. The agency estimates it has overpaid by $6.9 billion and has asked Congress to pass legislation to return that money.

Congress must “make bold, quick and substantive reforms,” said Art Sackler, executive director of the Washington-based Coalition for a 21st Century Postal Service, which represents corporate mail customers. “The USPS is hanging by a thread.”

The agency and U.S. Office of Personnel Management will ask the Justice Department’s Office of Legal Counsel to analyze the decision, said David Partenheimer, a Postal Service spokesman.

“Regardless of the outcome of the Office of Legal Counsel review, the Postal Service believes there will be no impact on employees,” Partenheimer said in an e-mail.

Union Plans ‘Every Step’

Congress “must act now” to correct pension inequities, and the American Postal Service Workers Union “will take every step necessary” to protect retirement benefits, President Cliff Guffey said in a statement. The postal union, the world’s largest, said it represents 220,000 workers and retirees.

The Postal Service has 563,402 career employees and 469,401 retirees, Partenheimer said.

Postal Service Inspector General David Williams said in January 2010 that the agency had been overcharged for its pension obligations. The Postal Service had overpaid by $75 billion, and if that was returned, it would create a surplus that could be transferred to a health-benefits fund, he found.

The service wants the authority to reduce pre-payment of health benefits for retirees and has said it will not be able to make a $5.5 billion payment due Sept. 30 for health benefits for future retirees. It also wants to end Saturday delivery.

The Postal Service reported a loss of $8.5 billion in its 2010 fiscal year. It also reported a widening second-quarter loss, to $2.6 billion, on declining volumes of first-class mail.

The service will continue to transmit employee contributions to the pension fund and will make payments to the Thrift Savings Plan, a defined-contribution federal retirement plan, Chief Human Resources Officer Anthony Vegliante said in the statement.

“The Congress and the administration have left the Postal Service with no other choice,” said Gene Del Polito, head of the Association for Postal Commerce, an Alexandria, Virginia- based group that represents postal customers. “The money’s not there, and they can’t get any more from customers that already are fleeing the mail.”

C&CDean

6/24/2011, 07:17 PM

I used to be the only one who cared about this - but I'm Civil Service, not FERS. Momma is FERS though, and this isn't a big deal. It sounds scary, but it ain't. Yet.

pphilfran

6/24/2011, 07:32 PM

I used to be the only one who cared about this - but I'm Civil Service, not FERS. Momma is FERS though, and this isn't a big deal. It sounds scary, but it ain't. Yet.

We will see how f'n smart they are...

They are in the exact same boat at GM and Chrysler...their business model was based on growth...as long as the business grew they could afford to pay a good wage with great benefits and retiree benefits...

Then when the competition came into to play, off shore competition for the auto companies and e mail for the postal service, the business model became obsolete and no longer viable...

GM and Chrysler failed to make the long term changes in time to stop the bleeding...

So far the postal service is doing the exact same thing as the US auto industry...other than Ford...

Let's see if they go the route of GM or the path of Ford...

My money is on the GM route....

Mjcpr

6/24/2011, 07:35 PM

It is my understanding they have jettisoned a lot of their dead weight, slug employees by offering them retirement and whatnot.

That can only help.

C&CDean

6/24/2011, 07:37 PM

We will see how f'n smart they are...

They are in the exact same boat at GM and Chrysler...their business model was based on growth...as long as the business grew they could afford to pay a good wage with great benefits and retiree benefits...

Then when the competition came into to play, off shore competition for the auto companies and e mail for the postal service, the business model became obsolete and no longer viable...

GM and Chrysler failed to make the long term changes in time to stop the bleeding...

So far the postal service is doing the exact same thing as the US auto industry...other than Ford...

Let's see if they go the route of GM or the path of Ford...

My money is on the GM route....

On most matters I would consider you seriously well informed. On this one? Not so much. The USPS overpays the FERS deal by several $B each year. They're asking to not pay into it until it becomes even.

The primary union at the USPS just accepted a hit that any other union wouldn't have taken. New employees are starting out at a fraction, a big change in promotions, etc. Anyhow, we'll see. I draw my check from OPM now. If it wasn't for momma, IWGAS about the FERS deal.

C&CDean

6/24/2011, 07:38 PM

It is my understanding they have jettisoned a lot of their dead weight, slug employees by offering them retirement and whatnot.

That can only help.

Completely and totally. dude.

soonercruiser

6/24/2011, 07:39 PM

It is my understanding they have jettisoned a lot of their dead weight, slug employees by offering them retirement and whatnot.

That can only help.

Not so!
I dealt with one today at the Hefner Road P.O.

Mjcpr

6/24/2011, 07:40 PM

Not so!
I dealt with one today at the Hefner Road P.O.

Only the dead weightiest and slugiest have been jettisoned so far.

Mongo

6/24/2011, 07:48 PM

whew!!!! I thought this was going to make Dean actually charge for the beejays he gives. good to know his retirement is safe

pphilfran

6/24/2011, 07:53 PM

It is the exact same problem as GM....they need to make drastic cuts...look at the amount of retirees vs current employees...nearly the same amount...

And as the jettison staff to cut salary they are offering early retirement which will not be enough cuts...

They lost 8.5 billion through Sept 2010...

They project losses of 8.3 billion this year...

This is after shedding 12 billion in operating expenses...

This is a good write up from Feb...and you are not worried? You should be...

Exactly the same problem as GM and Chrysler...they were slow to adjust...

This is from Feb 2011...

http://money.cnn.com/2011/02/09/news/economy/postal_service/index.htm

NEW YORK (CNNMoney) -- The U.S. Postal Service warned Wednesday that it may default on some of its financial obligations later this year after reporting yet another quarterly loss.

The USPS, a self-supporting government agency that receives no tax dollars, said it suffered a loss of $329 million in the first quarter of federal fiscal year 2011. That compared with a loss of $297 million a year earlier.

The agency has been suffering from an ongoing decline in mail volume, which has undercut revenues, while retiree health care costs have been straining its reserves.

Excluding costs related to retiree benefits and adjustments to workers' compensation liability, the Postal Service said it had net income was $226 million in the first quarter, which ended Dec. 31.

Despite ongoing cost-cutting efforts, the USPS said it expects to have a cash shortfall this year and to hit its federally mandated borrowing limit by September, when the government's fiscal year ends.

The agency said it will be forced to default on some of its financial obligations this year unless Congress changes a 2006 law requiring it to pay between $5.4 and $5.8 billion into its prepaid retiree health benefits each year.

"The Postal Service continues to seek changes in the law to enable a more flexible and sustainable business model," Patrick Donahoe, the Postmaster General, said in a statement. "We are eager to work with Congress and the administration to resolve these issues prior to the end of the fiscal year."

The Postal Service has taken a number of steps to increase revenue, including marketing initiatives and price increases. The agency raised rates an average of 3.6% in January.

It is also perusing more dramatic changes. Last year, the USPS submitted a request to the Postal Regulatory Commission, which oversees the agency, to eliminate Saturday mail service. The commission has yet to respond to the request, but a spokesman said it is in the "final phase" of making its decision.

The USPS has also cut back on hours to save money. The agency expects to eliminate 40 million work hours this fiscal year as part of a plan to save $2 billion.

However, the service is currently negotiating new contracts with the American Postal Workers Union and the National Rural Letter Carriers Association, which will probably object to cutting hours.

On the bright side, the Postal Service said improving economic conditions suggest the "worst of the precipitous volume decline during the recession is over." But mail volume continues to be anemic, rising only 1.5% in the first quarter as economic growth remains sluggish

pphilfran

6/24/2011, 07:59 PM

It is my understanding they have jettisoned a lot of their dead weight, slug employees by offering them retirement and whatnot.

That can only help.

They are doing the exact same thing that GM tried to do...offer early retirement which loaded them up with long term entitlements that they could no longer support in a non growth industry...they have nearly as many highly compensated retirees as workers...how in hell can you support that over the long term....you can't...

The union fought GM...

The union will fight the USPS...

Learn from past mistakes...do not repeat past mistakes...

C&CDean

6/24/2011, 08:01 PM

Only the dead weightiest and slugiest have been jettisoned so far.

Says the closet aggie fan. Meh.

pphilfran

6/24/2011, 08:06 PM

On most matters I would consider you seriously well informed. On this one? Not so much. The USPS overpays the FERS deal by several $B each year. They're asking to not pay into it until it becomes even.

The primary union at the USPS just accepted a hit that any other union wouldn't have taken. New employees are starting out at a fraction, a big change in promotions, etc. Anyhow, we'll see. I draw my check from OPM now. If it wasn't for momma, IWGAS about the FERS deal.

You are correct that the fund is currently over funded...they can probably miss payments for a couple of years....

Without paying into the benefit plan they have a profit of somewhere around a billion a year....

As soon as they have to start making payments because the fund is not sustainable they will be back in the same boat...

Like lemmings to the see...GM jumps and here comes the USPS...

Their business model is not functional in the current environment...

C&CDean

6/24/2011, 08:11 PM

Their business model is not functional in the current environment...

Nail, meet hammer. This is the deal. In spades. To the extreme.

Before anybody loses anything, let's realize this fact. The USPS is lightyears ahead of Obama Motors. Trust me. That's why they're doing what they're doing. Rather than wait for the **** to splatter on their faces, they're actually stepping up. Of course Obama Motors has taken more $$ from the populace in the past 3 days than the USPS has in the past 30 years, but nobody wants to hear that ****.

pphilfran

6/24/2011, 08:12 PM

I haven't looked at their numbers as close as usual but I would imagine they need to cut nearly 10 billion a year in operating expenses to stay afloat...and those 10 billion in cuts need to happen over the next two years...

pphilfran

6/24/2011, 08:14 PM

Nail, meet hammer. This is the deal. In spades. To the extreme.

Before anybody loses anything, let's realize this fact. The USPS is lightyears ahead of Obama Motors. Trust me. That's why they're doing what they're doing. Rather than wait for the **** to splatter on their faces, they're actually stepping up. Of course Obama Motors has taken more $$ from the populace in the past 3 days than the USPS has in the past 30 years, but nobody wants to hear that ****.

They are definitely better than GM...but that is not something they can really be proud of...

olevetonahill

6/24/2011, 08:17 PM

I do my Part. I save every one of the Postage paid envelopes and stuff em full of **** and mail em back to em.;)

REDREX

6/24/2011, 08:18 PM

The Gov't should sell it while it still has some value---only the Gov't could run a monopoly and lose that much money

StoopTroup

6/24/2011, 08:19 PM

I get those free boxes and roll them up and make fire-starters out of them. :D ;)

pphilfran

6/24/2011, 08:24 PM

C&CDean

6/24/2011, 08:27 PM

As a comparison...

In 2008 GM had annual revenue of 183 billion dollars...and lost 39 billion...

Last year the USPS had annual revenue of 67 billion...and lost 13.9 billion

(they list it as Total net deficiency, I am guessing that is total loss)

Dude, those numbers aren't anywhere close to real.

Here's the deal. Buy stamps. Or ask that your tenny shoes from Ebay be delivered USPS. That's pretty much it.

StoopTroup

6/24/2011, 08:30 PM

**** Ebay. If there was a Company that someone needs to start competing with...it's Ebay.

pphilfran

6/24/2011, 08:37 PM

2010 annual report...really good stuff....business plan and all...a lot on retiree benefits...and how they are driving losses...

http://www.usps.com/financials/_pdf/usps2010annual-report.pdf

Since 2008 they cut 80k employees and are now down to 584k...

Mail volume has dropped from 202 billion to 170 billion from

They expect mail volume to be slightly down through 2013...up a little this year and then dropping nearly 10% by 2020

They did save 6 billion last year...

pphilfran

6/24/2011, 08:41 PM

Sorry about the poor formatting..didn't cut and past well from the annual report...

Unlike any other public or private entity,
under a 2006 law, the U.S. Postal Service
must pre-fund retiree health benefits.
We must pay today for benefits that will not be
paid out until some future date.

Other federal agencies and most private sector companies
use a “pay-as-you-go” system, by which the
entity pays premiums as they are billed. Shifting
to such a system would equate to an average
of $5.65 billion in additional cash flow per year
through 2016, and save the Postal Service an
estimated $50 billion over the next ten years.

With the announcement of our Action Plan
in March, we began laying the foundation for
change, requesting that Congress restructure
this obligation.

The pre-funding requirement, as it currently
stands, contributes significantly to postal
losses. Under current law, the Postal Service
must follow a mandated pre-funding schedule
of $5.5 billion to $5.8 billion per year through
2016. In 2009, Congress granted a much
needed deferral, allowing us to pay $4.0 billion
less than the orignally required $5.4 billion payment.
This year, Congress opted not to provide
this deferral.

In the absence of legislative relief, the Postal
Service was required to make — and made —
this year’s $5.5 billion payment to the Retiree
Health Benefit Fund. We had sought a deferral
of this payment to minimize the risk of defaulting
on financial obligations in fiscal year 2011.
This risk remains. Even with the careful stewardship
of resources we are committed to in the coming year, current forecasts anticipate insufficient cash to enable the similar $5.5 billion
payment in September 2011.

Given the severity of our financial situation
and the fact that we already have implemented
aggressive cost-cutting and productivityimproving
measures, we continue to seek
approval from Congress to shift away from
our unique retiree health benefits pre-funding
mandate. We are committed to upholding our
obligation to current and former employees but
wish to do so in a way that does not constrain
cash flow during difficult financial periods of
declining volume.

Ensuring that the Postal Service remains a
viable business depends upon elimination of legislatively-
imposed constraints that impede our
efficient and profitable operation. Congressional
action, both to restructure our obligation to prefund
retiree health benefits and to address overpayment
to our Civil Service Retirement System
pension fund, is still urgently needed. n

C&CDean

6/24/2011, 08:42 PM

Do you know how sick you are to actually research that crap?

Come over to the house for a steak and a beer. Reality is so much better.

pphilfran

6/24/2011, 08:43 PM

Dude, those numbers aren't anywhere close to real.

Here's the deal. Buy stamps. Or ask that your tenny shoes from Ebay be delivered USPS. That's pretty much it.

If they are not real then their annual reports are inaccurate...

C&CDean

6/24/2011, 08:45 PM

If they are not real then their annual reports are inaccurate...

Oh my. Inaccurate?

Understatement?

StoopTroup

6/24/2011, 08:46 PM

Do you know how sick you are to actually research that crap?

Come over to the house for a steak and a beer. Reality is so much better.

lol

pphilfran

6/24/2011, 08:46 PM

Do you know how sick you are to actually research that crap?

Come over to the house for a steak and a beer. Reality is so much better.

You don't understand....I have always been fascinated by numbers...my crossword puzzles are spreadsheets and database...

i know I am sick...I tend to get a hard on and drool when gazing through a 1000 lines of data....

StoopTroup

6/24/2011, 08:47 PM

You don't understand....I have always been fascinated by numbers...my crossword puzzles are spreadsheets and database...

i know I am sick...I tend to get a hard and drool when gazing through a 1000 lines of data....

You should go over Boeing's annual reports for dessert.....lol

pphilfran

6/24/2011, 08:48 PM

Honestly, if you think my numbers are inaccurate I will double check and then post corrections and an apology if I was wrong....

pphilfran

6/24/2011, 08:49 PM

You should go over Boeing's annual reports for dessert.....lol

Boeing....boing....

olevetonahill

6/24/2011, 08:49 PM

Do you know how sick you are to actually research that crap?

Come over to the house for a steak and a beer. Reality is so much better.

I dint get a steak :mad:

Oh wait I had Pork chops in a can :D

pphilfran

6/24/2011, 08:52 PM

You should go over Boeing's annual reports for dessert.....lol

Airline industry...don't need to look at them...they are always behind schedule...cost overruns...one yearly gain for every two years losses...

I ain't got balls enough to buy into that industry...there is always one dumbazz start up airline gumming up the works with loss leader prices that crimp the big boys and their massive overhead style....

pphilfran

6/24/2011, 08:53 PM

I dint get a steak :mad:

Oh wait I had Pork chops in a can :D

Hell, you live a semi normal life and 2 step with young ladies...

I caress a data base...

I need a break...

pphilfran

6/24/2011, 08:55 PM

You better leave me alone or I will cry and go home...

olevetonahill

6/24/2011, 08:55 PM

Hell, you live a semi normal life and 2 step with young ladies...

I caress a data base...

I need a break...

I bet if you an I met, Id be asleep in 5 minutes :pop:

Mjcpr

6/24/2011, 08:57 PM

I bet if you an I met, Id be asleep in 5 minutes :pop:

He does make a mean roofie.

StoopTroup

6/24/2011, 08:59 PM

Airline industry...don't need to look at them...they are always behind schedule...cost overruns...one yearly gain for every two years losses...

I ain't got balls enough to buy into that industry...there is always one dumbazz start up airline gumming up the works with loss leader prices that crimp the big boys and their massive overhead style....

Yeah but we are talking about a Corporation that has a Monopoly in the World Market for the most part and they can't make money? They're only excuse is that Union Labor is the reason they are unable to make it when they have been cutting Union Jobs from their Workforce for over 2 decades?

olevetonahill

6/24/2011, 09:02 PM

He does make a mean roofie.

Learned that from Mongo dint he.

pphilfran

6/24/2011, 09:06 PM

Yeah but we are talking about a Corporation that has a Monopoly in the World Market for the most part and they can't make money? They're only excuse is that Union Labor is the reason they are unable to make it when they have been cutting Union Jobs from their Workforce for over 2 decades?

Who? What? Boeing?

They build a super expensive product in a feast or famine industry...

They have just enough competition that if they lose a contract it cramps their style...

They get a bunch of orders for planes over 5 or 10 years....Airbus gets one contract that they expect and they now have a ton of employees and overhead with not enough work to cover the expenses...

StoopTroup

6/24/2011, 09:08 PM

Who? What? Boeing?

They build a super expensive product in a feast or famine industry...

They have just enough competition that if they lose a contract it cramps their style...

They get a bunch of orders for planes over 5 or 10 years....Airbus gets one contract that they expect and they now have a ton of employees and overhead with not enough work to cover the expenses...

The two products can't even be compared either. Why the hell can't Boeing make it? They are the only Company to buy new planes from and they layoff the workforce during a famine.

Mjcpr

6/24/2011, 09:09 PM

The two products can't even be compared either. Why the hell can't Boeing make it? They are the only Company to buy new planes from and they layoff the workforce during a famine.

Airbus?

pphilfran

6/24/2011, 09:09 PM

I bet if you an I met, Id be asleep in 5 minutes :pop:

Hell, no...I am strictly blue collar...
]
I love the smell of sour corn as I bait the hole...

I love the sound a flathead makes when he hanging from a tree and I am skinning him...

I can go camping for a week and only have one change of clothes...

Need I go on?

pphilfran

6/24/2011, 09:13 PM

The two products can't even be compared either. Why the hell can't Boeing make it? They are the only Company to buy new planes from and they layoff the workforce during a famine.

It is a tough business to keep a steady stream of revenue....

The regulation and inspection process is staggering...

When Airbus gets a contract or two it hurts them badly...

There ain't no new orders for planes coming in during the recession and high fuel prices...

olevetonahill

6/24/2011, 09:16 PM

Hell, no...I am strictly blue collar...
]
I love the smell of sour corn as I bait the hole...

I love the sound a flathead makes when he hanging from a tree and I am skinning him...

I can go camping for a week and only have one change of clothes...

Need I go on?

Ya sound like My kinda person then. Im having a Party, Ya wanta come?

pphilfran

6/24/2011, 09:21 PM

The two products can't even be compared either. Why the hell can't Boeing make it? They are the only Company to buy new planes from and they layoff the workforce during a famine.

What two products was I comparing?

Gm and USPS?

I was just posting revenue and losses to compare company size...

But if you want a comparison...

Both companies have been in a flat or declining market and have lost market share...

Both companies had similar losses...

Both companies tried to cut expenses and downsize their companies..

Both companies have/had years of losses compounding year upon year...

Ford had to literal mortgage the company name to survive...GM was too slow and paid the ultimate price in BK...Ford survived...

The USPS is at the point where they will go down the GM path or the Ford path...

To survive the USPS needs to make the same cuts they made the last two year for the next three or four...

It can be done but it is going to be a tough road...

pphilfran

6/24/2011, 09:22 PM

Ya sound like My kinda person then. Im having a Party, Ya wanta come?

I can always party...

StoopTroup

6/24/2011, 09:23 PM

It is a tough business to keep a steady stream of revenue....

The regulation and inspection process is staggering...

When Airbus gets a contract or two it hurts them badly...

There ain't no new orders for planes coming in during the recession and high fuel prices...

LOL. That's funny as hell.....

olevetonahill

6/24/2011, 09:26 PM

I can always party...

Cool
Gonna be some drankin
Gonna be some dancin
gonna be some fightin
gonna be some ****in.
Just gonna be me and you.:hot:

StoopTroup

6/24/2011, 09:31 PM

pphilfran

6/24/2011, 09:32 PM

Cool
Gonna be some drankin
Gonna be some dancin
gonna be some fightin
gonna be some ****in.
Just gonna be me and you.:hot:

Wait a minute...it may take two to tango...gotta be at least three to party...

(I know...I was supposed to ask what should I bring...and you would say nutting, it will just be you and me)

Mongo

6/24/2011, 09:32 PM

Learned that from Mongo dint he.

amateurs use roofies.

I use chloroform

pphilfran

6/24/2011, 09:36 PM

Just Boeing vs. Airbus. One is a very good Aircraft and the other is trying to figure out a way to put Boeing out of business and take the entire Market share away from them.

I don't know chit about Airbus...don't know much more about Boeing...

I dislike the industry and I would probably short the companies before I ever bought into them...since I don't know more than the basics on the industry I void them like the plague and don't really review them in depth...

StoopTroup

6/24/2011, 09:46 PM

I don't know chit about Airbus...don't know much more about Boeing...

I dislike the industry and I would probably short the companies before I ever bought into them...since I don't know more than the basics on the industry I void them like the plague and don't really review them in depth...

It's why all this BS about them and the NLRB and the South Carolina Plant is nothing more than Politics. It has nothing to do with Boeing being able to stay in business.

pphilfran

6/24/2011, 09:54 PM

It's why all this BS about them and the NLRB and the South Carolina Plant is nothing more than Politics. It has nothing to do with Boeing being able to stay in business.

Everything they do is f'd up...they contract out a lot of work and the completed parts don't meet spec or don't fit or are delayed...usually all three...

They have to change design far too often during the building process...

Their latest project is a technological marvel...lots of carbon fiber and completely designed on computer....it has turned into an engineering nightmare...

The unions in Seattle walked out far too often...

A messed up company in a messed up cyclical industry...

You have picked my brain clean on Boeing...

StoopTroup

6/24/2011, 10:12 PM

Everything they do is f'd up...they contract out a lot of work and the completed parts don't meet spec or don't fit or are delayed...usually all three...

They have to change design far too often during the building process...

Their latest project is a technological marvel...lots of carbon fiber and completely designed on computer....it has turned into an engineering nightmare...

The unions in Seattle walked out far too often...

A messed up company in a messed up cyclical industry...

You have picked my brain clean on Boeing...

If they go overseas to build planes Airbus will crush them

pphilfran

6/25/2011, 12:35 PM

Yeah but we are talking about a Corporation that has a Monopoly in the World Market for the most part and they can't make money? They're only excuse is that Union Labor is the reason they are unable to make it when they have been cutting Union Jobs from their Workforce for over 2 decades?

FYI...

http://blog.seattlepi.com/aerospace/2009/05/20/boeing-no-longer-worlds-largest-aerospace-and-defense-firm/

2011 Orders...

Boeing - 109
Airbus - 90

An added plus....in 2008...the European Aeronautic Defense and Space Co. (Airbus) became the largest aeronautic company in the world)...in 2010 Boeing climbed past EADS with revenues at 68 billion vs EADS's 59 billion...

http://money.cnn.com/magazines/fortune/global500/2010/full_list/index.html

pphilfran

6/25/2011, 01:12 PM

There is more but this should be satisfactory...

http://www.airbus.com/newsevents/news-events-single/detail/airbus-with-new-order-record-at-paris-air-show-2011/

Airbus with new order record at Paris Air Show 2011

At the 49th Paris Air Show in Le Bourget, Airbus won about US$72.2 billion worth of business for a total of 730 aircraft. This success sets a new record for any commercial aircraft manufacturer at any air show ever. The commitments comprise Memorandum of Understanding (MoU) for 312 aircraft worth US$28.2 billion and firm purchase orders for 418 aircraft worth around US$44.0 billion.

The A320neo Family was clearly the star of the week and proved irresistible to airlines and lessors alike, by winning an unprecedented 667 commitments worth some US$60.9 billion. Furthermore, this means that total A320neo Family backlog since its launch in December 2010 has now reached 1,029 units, making it by far the best selling airliner in the history of commercial aviation.

yermom

6/25/2011, 01:13 PM

Ya sound like My kinda person then. Im having a Party, Ya wanta come?

all i got out of that was "sour corn hole"

no thanks

OutlandTrophy

6/25/2011, 01:13 PM

yeah

out

pphilfran

6/25/2011, 01:15 PM

all i got out of that was "sour corn hole"

no thanks

Try it...you would like it if you can get by the smell...

I Am Right

6/25/2011, 04:04 PM

Do I get my postage back?

jkm, the stolen pifwafwi

6/25/2011, 04:28 PM

If they go overseas to build planes Airbus will crush them

Heh, most of the plane IS built overseas - then shipped to the US to assemble. The dreamliner hulls are made in japan and then flown here on this funky looking 747.

jkm, the stolen pifwafwi

6/25/2011, 04:44 PM

What two products was I comparing?

Gm and USPS?

I was just posting revenue and losses to compare company size...

But if you want a comparison...

Both companies have been in a flat or declining market and have lost market share...

Both companies had similar losses...

Both companies tried to cut expenses and downsize their companies..

Both companies have/had years of losses compounding year upon year...

Ford had to literal mortgage the company name to survive...GM was too slow and paid the ultimate price in BK...Ford survived...

The USPS is at the point where they will go down the GM path or the Ford path...

To survive the USPS needs to make the same cuts they made the last two year for the next three or four...

It can be done but it is going to be a tough road...

So while I agree with your crusade on government spending, you have to cut the post office some slack.

It is mandated in the constitution that the federal gov't provide a post office. It doesn't stipulate that they should provide a profitable and/or self-sustaining post office. That idea really started to hit home in the late 80's early 90's. Since that time, they've made strides to increase automation, outsource inefficient routes, and gut the ole payroll. If the only problem that they are currently having is retirement than I say "Good for them".

Pensions are a huge problem throughout the government (and old industry) because apparently people in the 70's either couldn't do math or, more likely, were 60 years old with no retirement savings and realized that they couldn't live their current life on social security so they got a bunch of other 60 years olds in the same boat (IE congress) to vote for it.

Now, if you want to argue that the post office (like the library) are artifacts of a different age and we need to explore sunsetting it with a constitutional amendment then I'm game. We'd have a million people drawing pensions for the next 30 years but oh well (assuming they don't figure out whatever it is in our bodies that causes us to age and figure out how to slow/halt/partially reverse it in that time).

pphilfran

6/25/2011, 05:26 PM

C&CDean

6/25/2011, 06:14 PM

jkm...I am not arguing that the USPS needs to be scrapped...only that they face the same type challenge that GM and Ford faced...they still have a lot of cutting to do within a limited time horizon...and anytime you have as many retirees as workers you face a serious challenge...

btw...if I am not mistaken the USPS has to pre fund their retirement accounts because private companies tended to keep funding too low and that made their retirement plans subject to shortages in bad times....our leaders in DC did not want the USPS to face the same problems so they mandated the pre funding....again, I might be wrong but I think I am at least in the ballpark with my assumptions...

On a sidenote, the most recently retired Postmaster General began his new gig today with the Washington DC Airports Authority. Gonna head up the whole effort to take the Metro out to Dulles, make both airports profitable, etc.

Kinda funny since y'all were talking about airplanes and such.

pphilfran

6/25/2011, 06:26 PM

On a sidenote, the most recently retired Postmaster General began his new gig today with the Washington DC Airports Authority. Gonna head up the whole effort to take the Metro out to Dulles, make both airports profitable, etc.

Kinda funny since y'all were talking about airplanes and such.

Damn it's hot...

Good post...let's see if I can turn it into something controversial...

Soonerfan88

6/27/2011, 11:43 AM

A couple of observations:

The USPS is trying to streamline their operations but, unlike private corporations, have to get approval from Congress to do anything at all. Maybe if that whining Congressman would stand behind the USPS's attempts to change delivery schedules/models, they would not be suspending payments that aren't even needed at this time.

Airbus is subsidized by 4 European countries, allowing them to do more R&D and offer better prices than Boeing. The WTO appeals court recently upheld previous findings against EADS but the damage is already done. Airbus has already benefited from the R&D and established their market share. Unfortunately, the WTO left export subsidies a little murky and the Canadians, Brazilians, and Chinese are poised to take even more U.S. business.

jkm, the stolen pifwafwi

6/27/2011, 11:55 AM

Just Boeing vs. Airbus. One is a very good Aircraft and the other is trying to figure out a way to put Boeing out of business and take the entire Market share away from them.

A little secret here. Airbus isn't going to be able to do much about Boeing until the dollar gets stronger. Boeing is killing them on exchange rates whcih makes their planes significantly cheaper. Of course, for similar reasons, it makes Offshoring stuff for Boeing unattractive so they are trying to nearshore it to SC.

Caterpillar is in a similar boat, yet they are really struggling for some reason.

Curly Bill

6/27/2011, 11:57 AM

Caterpillar is struggling because their stuff is always breaking. Just watch Swamp Loggers if ya don't believe me. :D

The Profit

6/27/2011, 12:02 PM

Caterpillar is struggling because their stuff is always breaking. Just watch Swamp Loggers if ya don't believe me. :D

I would have guessed that you watched Swamp Loggers.

Curly Bill

6/27/2011, 12:04 PM

I would have guessed that you watched Swamp Loggers.

You know it! Swamp Loggers is right up there with Storage Wars with me. ;)

JDMT

6/27/2011, 12:06 PM

Chit i actually like something like bill likes. I'm gonna go shoot myself now. Nice knowing you all.

Curly Bill

6/27/2011, 12:08 PM

Chit i actually like something like bill likes. I'm gonna go shoot myself now. Nice knowing you all.

I dare ya!

JDMT

6/27/2011, 01:23 PM

I dare ya!

Well, i did it.

pphilfran

7/24/2012, 02:01 PM

Over a year later...and we are back in the same spot....if we are lucky we can have the same problem next year....

http://online.wsj.com/article/SB10000872396390444097904577535322022316422.html

While lawmakers continue to fight over how to fix the ailing U.S. Postal Service, the agency's money problems are only growing worse.

The Postal Service repeated on Wednesday that without congressional action, it will default—a first in its long history, a spokesman said—on a legally required annual $5.5 billion payment, due Aug. 1, into a health-benefits fund for future retirees. Action in Congress isn't likely, as the House prepares to leave for its August recess.

The agency said a default on the payment, for 2011, wouldn't directly affect service or its ability to pay employees and suppliers. But "these ongoing liquidity issues unnecessarily undermine confidence in the viability of the Postal Service among our customers," said spokesman David Partenheimer.

The agency says it will default on its 2012 retiree health payment as well—also roughly $5.5 billion, due Sept. 30—if there is no legislative action by then.

Most everyone agrees the Postal Service needs an overhaul. It had a loss of $3.2 billion in the second quarter of this fiscal year; it is to report third-quarter results on Aug. 9. The agency blames factors including declining mail volumes and the unusual 2006 mandate by Congress that it annually set aside billions for future retirees. But while the Senate has passed legislation to overhaul the agency, the House says it doesn't expect to take up its own proposal until after August.

The two sides remain far apart. Senators voted in April, on a bipartisan basis, for legislation that largely shores up the agency's finances by returning an estimated $10.9 billion overpayment made into the federal employee pension system. The legislation limits the agency's ability to close postal branches and stop Saturday delivery.

Republican House leaders support legislation they say would require the agency to operate more like a business, in part by setting up a panel to reduce the network of post offices. Some rural-district House members, from both parties, have been worried about closures in their areas.

A chief backer of the House bill, Rep. Dennis Ross (R., Fla.), wouldn't consider financial relief in the Senate bill "absent wholesale reforms" that are in the House bill, said Fredrick Piccolo Jr., chief of staff for Mr. Ross. He said that there will "in all likelihood be no vote before the August recess."

The office of Sen. Tom Carper (D., Del.), one of the authors of the Senate bill, said Wednesday that "every day that is lost in passing reform legislation puts the Postal Service another step closer to collapse, and unfortunately it appears that House Leaders are prepared to let that happen."

C&CDean

7/24/2012, 05:06 PM

marfacowboy

7/24/2012, 05:45 PM

They're in a tough spot. Some of their financial issues, large ones, are due to Congress and the law it passed in 2006. For most significant changes, they have to have Congressional approval, and most of the Republicans are out to demonize it, ruin it and force privatization. Changing the law won't fix everything, and the reason is first class postage revenue continues to shrink.
FedEx is in a pickle, too, because USPS is their largest account, and large portions of that contract are now at risk. If FedEx loses it, it will mean significant cuts at FedEx.
Again, another example of the government and private enterprise being co-dependent on one another in the U.S. economy.

rock on sooner

7/24/2012, 08:30 PM

Well, i did it.

Prolly missed, tho...

olevetonahill

7/24/2012, 11:24 PM

Prolly missed, tho...

No he was and Is a Diabetus dude
shot himself with some Insulin

rock on sooner

7/25/2012, 03:44 PM

No he was and Is a Diabetus dude
shot himself with some Insulin

Sorry, weak attempt at humor...

8timechamps

7/25/2012, 06:58 PM

It's nothing new. Just more on the same subject - getting Congress to drop the pre-funding of retiree health benefits. Pretty meh actually. Congress needs to do it (no other government agency has to prefund retirement benefits).

BTW, if the USPS didn't put one more dime into retiree benefits, they've already pre-paid enough $$ to pay retiree benefits for more than 20 years into the future. Again, congress needs to do this thing.

Admittedly, I'm no expert on the USPS or their benefits, but it would appear that the USPS needs to adopt drastic business model changes. I suspect (though I don't kknow for sure) that the year-over-year consumer usage has dropped since the advent of email. Of course you can't email a Christmas gift across the country, but with services like UPS, FedEx, etc., the USPS does have competition in that market space. I would guess that the USPS still owns the majority of the parcel market, so that's an area that they will likely continue to dominate. I have no idea how the USPS could change their business to compete with email, and maybe it's not possible, but I don't think increasing postage rates is enough.

Again, I really don't know much about the USPS inter-workings or benefits plan, so maybe you can shed some light. Can they maintain with their current business model, or do they need to make major changes (whatever that may be)?